I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Posted: Mon Jul 07, 2008 9:06 am Post subject: Re: Price Increases / Inflation Thread
inflation is a big lie
the dilution of the money supply is essentially why everything ends up costing more. Also because there is more money in circulation, people can get paid more. Think about it, how much is £ or $ worth today. How much was it worth 100 years ago ?
Where as, if oil gets expensive, there is the same amount of money in circulation, it's just been allocated elsewhere, ie to energy.
But you'll never ever hear this on tv.
The retard f.ucks will just go, oh look, inflation, let's raise interest rates. Yeah dude, that'll fix everything... lol. It fixed things before because it actually slowed down the money creation process. But oil 'inflation' is something totally different. Same deal with food.
Joined: Sep 08, 2005 Posts: 764 Location: Atlanta, GA
Posted: Mon Jul 07, 2008 10:05 am Post subject: Re: Price Increases / Inflation Thread
In Econ 101, they teach you that as demand falls (like in a recession / depression), prices will fall as well, to follow demand down the curve, so to speak. But with the cost of oil being the cause of this current round of inflation, does that mean prices will rise endlessly even as demand falls?
Looks like to me that these companies are going to be pricing themselves right out of the game, and they sure are in a hurry about it, too.
Guess it's time to rewrite the economics textbooks...hehe. _________________ Nowhere to run, nowhere to hide...
...and the meek shall inherit the Earth!
Posted: Mon Jul 07, 2008 11:12 am Post subject: Re: Price Increases / Inflation Thread
No evidence of demand destruction here. Travel is increasing. More SUV's are being hauled down & back on daily commutes. 1) Offshore outsourcing is forcing more people to commute. 2) Inflation expectations are moving travel up. 3) Gasoline demand is easily double at $5 what it was at $3 because of inflation expectations. _________________ People first, then things, then dollars.
There will be enslavement, cannibalism, & zombie invasions.
In Econ 101, they teach you that as demand falls (like in a recession / depression), prices will fall as well, to follow demand down the curve, so to speak. But with the cost of oil being the cause of this current round of inflation, does that mean prices will rise endlessly even as demand falls?
Looks like to me that these companies are going to be pricing themselves right out of the game, and they sure are in a hurry about it, too.
Guess it's time to rewrite the economics textbooks...hehe.
Many businesses will be priced out of the game. But the game will continue as resources deplete. In the seventies all kinds of businesses failed, as prices rose. Text book stagflation. This time it will be worse because union activity can't pump wages higher for employees and profit margins for many businesses are already razor thin.
There's always the hidden inflation as well. My son opened an ice cream sandwich bar only to find out it's about 2/3rds the width that it used to be. Price is the same but you get less for your money.
He stocks shelves and said the 8oz yogurt containers are now 6oz for the same price. I don't think this kind of inflation shows up in the govt numbers.
There's always the hidden inflation as well. My son opened an ice cream sandwich bar only to find out it's about 2/3rds the width that it used to be. Price is the same but you get less for your money.
He stocks shelves and said the 8oz yogurt containers are now 6oz for the same price. I don't think this kind of inflation shows up in the govt numbers.
This is a very very good point. I have wondered that myself. So one of the things I have done is that the Grocery Store I go to prints the price per ounce for the product in fine print. I have been following this and the price per ounce has gone up 20%. However I feel that many things are too big anyway. A bagel in the 1940s was three inches across. Now they are like five. As fat as this nation is its a good thing that the size of things are dropping. I can't wait.
There's always the hidden inflation as well. My son opened an ice cream sandwich bar only to find out it's about 2/3rds the width that it used to be. Price is the same but you get less for your money.
He stocks shelves and said the 8oz yogurt containers are now 6oz for the same price. I don't think this kind of inflation shows up in the govt numbers.
This is a very very good point. I have wondered that myself. So one of the things I have done is that the Grocery Store I go to prints the price per ounce for the product in fine print. I have been following this and the price per ounce has gone up 20%. However I feel that many things are too big anyway. A bagel in the 1940s was three inches across. Now they are like five. As fat as this nation is its a good thing that the size of things are dropping. I can't wait.
Yes, I've also thought that we can stand to lose a little weight with smaller portions, although we still are not getting as much for our money. We may end up buying more if we run out of something. Like if the cereal box ends up being 1/4 the size at some point!
So, what we're looking at is stagflation - prices go up (in the EU that's 4%), economy recesses. Time to re-write those economy books?
Not really. Someone pointed that there's more and more capital being allocated for oil, either extraction, production, distribution, because oil is now more expensive.
So, while the inflation goes up, we are now experiencing no growth because there's little demand, money's going more and more towards oil and there's little capital to invest in other stuff. The whole economy grinds to a halt.
My point is, there can be little or no demand destruction because there's no substitute for oil in sight. Anybody read the Hirsch Report? No substitutes whatsoever.
Thinking reasonably, this may go on for a while. Rating by the ECB (and, in a way, the Fed) may stay relatively high (that's 4,25% for Europe, 2% in the US), but the economy will stop. Stop hard. That will force them to lower the rates, because there will be a strong lack of capital to invest in restarting the economy, and to invest in the alternatives.
If we come to that - and chances are we will get to that - then they will lower the rates, pretty much like Japan had to do in the Nineties (0% rates and still little growth).
Then, 2 cenarios: real inflation and all hell breaks loose; or the thing will be so down by then, states will have to intervene.
(...)
My point is, there can be little or no demand destruction because there's no substitute for oil in sight. Anybody read the Hirsch Report? No substitutes whatsoever.
(...)
Posted: Tue Jul 08, 2008 9:34 am Post subject: Re: Price Increases / Inflation Thread
Hogan wrote:
I've also noticed this when shopping, DeepOil. Sneaky sneaky.
Thanks for the articles. Looks like I wasn't imagining it. Bastards. Inflation? What inflation? Don't know what you're talking about? Snicker, snicker.
Posted: Tue Jul 08, 2008 9:50 am Post subject: Re: Price Increases / Inflation Thread
DeepOil wrote:
Hogan wrote:
I've also noticed this when shopping, DeepOil. Sneaky sneaky.
Snicker, snicker.
Yes and even those Snickers chocolate bars appear to be shrinking.
Plans to shrink the size of chocolate bars, crisp packets and other snacks were unveiled yesterday by the Government's food watchdog in a bid to tackle obesity in Britain.
Posted: Tue Jul 08, 2008 9:52 am Post subject: Re: Price Increases / Inflation Thread
threadbear wrote:
DeepOil wrote:
Hogan wrote:
I've also noticed this when shopping, DeepOil. Sneaky sneaky.
Snicker, snicker.
Yes and even those Snickers chocolate bars appear to be shrinking.
Plans to shrink the size of chocolate bars, crisp packets and other snacks were unveiled yesterday by the Government's food watchdog in a bid to tackle obesity in Britain.
(...)
My point is, there can be little or no demand destruction because there's no substitute for oil in sight. Anybody read the Hirsch Report? No substitutes whatsoever.
(...)
That's not accurate. There are alternatives, but they're various solutions that doesn't scale much. There's no 1 single substitute for oil, but there are many subsitutes for some of the uses of oil.
You're absolutely right. Do you think it's accurate to assume that, since there are various substitutes are not just one, there will be less economies of scale, which will affect prices and inflation?
As Mises explained in his essay "Inflation: An Unworkable Fiscal Policy":
"Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check.
But people today use the term `inflation' to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. . . .
As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar.
As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation." _________________ Conform . Consume . Obey .
As Mises explained in his essay "Inflation: An Unworkable Fiscal Policy":
"Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check.
But people today use the term `inflation' to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages.
seems the anwers to his question is inflation _________________ www.peakoil.be
All times are GMT - 6 Hours Goto page 1, 2, 3, 4Next
Page 1 of 4
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
News
Discussions
Resources
Members
Forum FAQ
Search
Usergroups
Profile
Log in to check your private messages
Log in
