Death of inflation.

[Swamp Fox]

This never occurred to me. Cnn's piece on the biggest 25 business news of the past 25 years has indicated that inflation has been killed. (http://www.cnn.com/2005/US/07/01/cnn25.top.financial/index.html) For those who didn't study economics even in the 1980's, inflation was a very serious problem to economists at that time, and even more so in the 1970's, when the oil shock and the Vietnam War led to stagflation - price rises without growth. Now, even the high price of oil hasn't created inflation, which did happen in 1973, and that is good for everyone. And Wal-Mart and the rise of cheap imports (read globalization) has meant that prices were kept pretty well down. This will not change for a decade, because, even as the Chinese Yuan revalues, there will be cheaper labor spots, like Pakistan, Africa, and, yes, Afghanistan - I hear stories of Afghanistanis providing cheap labor goods and services to the high-wage Pakistanis. :)

For those who think that cheap labor imports are hurting the American way of life, I suggest you speak to the economists, and ask them if they want to go back to the 1980's or, God forbid, the 1970's - they will say no.

[tke711]

While not dead, inflation as been near dead for a while and it's predicted to stay at a near dead level of 2.3% for the remainder of 2005. Projections for 2006 have it at 2.1%.

The high price of oil/energy has yet to have much of an effect on inflation. However, high energy prices, coupled with high metal costs (steel, brass, etc) will eventually have an effect on inflation. When that will be though will be anyone's guess, because most have felt that it would have already happened.

[Coot]

For those who think that cheap labor imports are hurting the American way of life, I suggest you speak to the economists, and ask them if they want to go back to the 1980's or, God forbid, the 1970's - they will say no.

Some trade off eh Stan? A diminished quality of life for American citizens through the importation of unskilled and semi literate labor that the taxpayer subsidizes through their heavy reliance on state services, in exchange for flat inflation.

[Kangaroo]

In an absolute dollar amount, energy prices are higher than ever. However, as a percentage of the consumers' income they are still lower than in parts of the '70s. This is why inflation hasn't reared its head yet. The housing bubble is contributing to the upward pressure on prices. The cheap cost of money is, IMO, artificially keeping inflation in check. A plunging dollar will hurt in the short term, but help in the long term as American products become cheaper vs. imports, easing the balance of trade.

[Lovehound]

I don't see how housing prices can't have a major impact on inflation -- unless the bubble pops soon.

[ethics]

Some trade off eh Stan? A diminished quality of life for American citizens through the importation of unskilled and semi literate labor that the taxpayer subsidizes through their heavy reliance on state services, in exchange for flat inflation.


My thoughts exactly.

Frankly, Stan, you don't HAVE to exchange inflation for cheap labor. Inflation can be kept in check without sacrificing the way we have been.

[Swamp Fox]

Is America worse off? Umm, not quite, as history shows. (http://www.fortune.com/fortune/articles/0,15114,1081259,00.html) Yes, adjustments are always painful, as it was in the Industrial Revolution. But the long term trend is to raise living standards, not just for Chinese and Indians, but also for Americans.

[Coot]

Is America worse off? Umm, not quite, as history shows. (http://www.fortune.com/fortune/articles/0,15114,1081259,00.html) Yes, adjustments are always painful, as it was in the Industrial Revolution. But the long term trend is to raise living standards, not just for Chinese and Indians, but also for Americans.

How can I put this gently Stan...the people who are living with and most directly paying for illegal immigration are having their lives directly and most negatively impacted by this. I really don't think they much give a shit whether some economic model shows that somewhere down the road their sacrifice will be duly noted. People are pissed off now and they're pissed off because the government is refusing to enforce existing laws and it is directly screwing them. You wanna talk hypotheticals, long term goals, monetary policy, economic models? How about you go talk that bullshit with people who aren't directly impacted and living through a corrupt government, bought off by corrupt businesses who are happily fucking their lifestyles and qualities of life over...'m'kay?

How do you justify economic soundness in the face of political corruption...particularly in a democracy? The vote collecting leaches are being paid to explicitly fuck over the people who are voting for them, only they are expected to do it in such a manner that it doesn't threaten their re-electability...in other words they do it over years or decades.

Nice model Stan. Kinda reminds me of moral ground AIDS ridden prostitutes occupy, but then I guess the folks familiar with that particular venue of public policy you're espousing are already intimately familiar with that. Pretty much on par with the moral accumen one would expect from a law-yer. Of course, you probably already knew this. Then again, you also knew we have a second amendment to our Constitution. ;)

[Swamp Fox]

Hey, look, inflation is tamed. (http://www.theglobeandmail.com/servlet/story/RTGAM.20050714.wuscpi0714/BNStory/Business/)

[ethics]

Hey, look, inflation is tamed. (http://www.theglobeandmail.com/servlet/story/RTGAM.20050714.wuscpi0714/BNStory/Business/)


Hehe, Stan, I am in the business of watching monthly data. Allow me to project what depending on the market news like this is like. People wait for the number, then, at 8:30AM all hell breaks loose. Some people panic, some people take advantage of the people panicking. That's what the market is in a nutshell.

Data, however, not unlike this news of inflation, is by monthly. Today it may be "tamed", next month it will be pointing south, but people like you (and there are plenty of them around) will not look at this data as something of an opposite. To you, it will be an anomaly.

There was a great Economist (Nobel winner) in the fifties who said something like, people will see and agree with anything remotely close to their own opinion and discard what they disagree with.