DEFLATING EXPECTATIONS
For most of my adult life ( and probably prior to that, at least subconsciously ) inflation expectations were a given, written in stone, right up there with “nothing is as important as getting laid”, “I can’t get laid, what a bunch of bitches and ho’s” and “I need some ho’s, ‘cause the wife ain’t putting out even after I give her all my paycheck”. You could count on prices going up steadily, but not too bad except real estate ( I never seriously entertained going to college so I viewed the insane inflation there as a Darwin tax, each semester attracting bigger and bigger idiots until one day anyone who wanted to go to college on debt was removed from the gene pool after they couldn’t afford kids ). Even medical costs didn’t go insane until about ten years ago, where prior any position above entry level offered very affordable coverage. Of course wages never kept up, but I’ve never had a job that paid well so I’m used to the slow drip Chinese water torture of losing ground on purchasing power yearly ( Wal-Mart somewhat arrested that from roughly mid-nineties to mid Oughts, covering my most vulnerable years of child support, plus I was able to continuously move down the food chain shelter wise so losing buying power was manageable ). So, while inflation was bad, it was never really bad ( in thirty years, minimum wage and a trailer lot rent plus food went from half take home to three quarters. Severe in retrospect but manageable on a day to day ). We had inflation, but it was mild and certainly not earth shattering ( the inflation from 2005 to 2015 was a different animal entirely, mostly dethroning the middle class as a viable socioeconomic unit ).
For most of my adult life ( and probably prior to that, at least subconsciously ) inflation expectations were a given, written in stone, right up there with “nothing is as important as getting laid”, “I can’t get laid, what a bunch of bitches and ho’s” and “I need some ho’s, ‘cause the wife ain’t putting out even after I give her all my paycheck”. You could count on prices going up steadily, but not too bad except real estate ( I never seriously entertained going to college so I viewed the insane inflation there as a Darwin tax, each semester attracting bigger and bigger idiots until one day anyone who wanted to go to college on debt was removed from the gene pool after they couldn’t afford kids ). Even medical costs didn’t go insane until about ten years ago, where prior any position above entry level offered very affordable coverage. Of course wages never kept up, but I’ve never had a job that paid well so I’m used to the slow drip Chinese water torture of losing ground on purchasing power yearly ( Wal-Mart somewhat arrested that from roughly mid-nineties to mid Oughts, covering my most vulnerable years of child support, plus I was able to continuously move down the food chain shelter wise so losing buying power was manageable ). So, while inflation was bad, it was never really bad ( in thirty years, minimum wage and a trailer lot rent plus food went from half take home to three quarters. Severe in retrospect but manageable on a day to day ). We had inflation, but it was mild and certainly not earth shattering ( the inflation from 2005 to 2015 was a different animal entirely, mostly dethroning the middle class as a viable socioeconomic unit ).
*
Now, if you looked at the last ten years, inflation was very much alive
and well. Of course, it was supply and
demand inflation, not monetary creation inflation, as energy became scarce
insofar as cost per BTU. The government
granted monopoly Federal Reserve might have been creating money by the gigabyte
computer drive load, but that went to mainly three things. Suppressing the danger of the derivatives
market, by buying up all the toxic assets from 2008 that were counted as
collateral, reducing the probability Too Big To Fail banks would do just
that. Making the rich much richer. And whatever else needed to be done to keep
the system paying the bankers. In short,
added money kept the rich getting richer as the middle class were stripped of
assets. Now it is the lower class’ turn
to pay ( first payment plain, mandatory health insurance. Second, wildly increasing rents ). Inflation would have been worse but the extra
bucks all went to the casino players and owners. Joe Blow one paycheck from a cardboard box
under the freeway mostly paid extra for scarcity ( most ownership units turned
into rentals, ethanol to fuel drastically raising food costs, flooding the
hospitals with newly insured poor people rationing health care causing rising
prices ). So, is inflation baked into
the cake, or is deflation the new normal as failing economies produce a glut of
goods, even in a resource contraction?
More next article.
END
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Inflation is baked into the cake but has been bitter but eatable. After the 2016 election it will increase as the icing of the cake is slathered on . Add in government pay and retirement increases on top of inflation we are in for a HELLOFA ride.
ReplyDeleteI hate to even guess which way things are going. What I've tried to do is to be insulated from the ups and downs by being out of the system as much as possible.
ReplyDeleteIt's impossible to be completely out of it, but it even a small reduction can make a big difference.
A Small Reduction...kind of like being the one eyed man in the valley of the blind
Deleteone cataract covered severely near sighted eye, but still enough warning to duck when the rock is flying toward your head.
DeleteTotally agree 6bears. No matter what the economy does, a person's needs are still the same -- food, water, shelter, protection.
DeleteIf I have a year's supply of food and grocery prices go up, down or sideways, it doesn't matter. I'm still going to eat.
Folks need to quit trying to "time" the collapse. Be smart, simplify, stockpile staples and stay safe.
And remember the first rule of survival - Stay away from crowds.
Idaho Homesteader
Jim here is a link to a kindle book I just finished . its a post apocalypse ,librarian ,Indiana jones, fun read. http://www.amazon.com/dp/B0127X3OQO/ref=wl_it_dp_v_nS_ttl?_encoding=UTF8&colid=1BEK6IA4VD08G&coliid=I17I5H01SCWZIV
ReplyDeleteThanks! Added to the wish list.
Delete" first through inflation, then deflation, and repeat again, and the peoples shall become slaves on the lands their forebears won".
ReplyDeleteIf I recall correctly that is more or less what Thomas Jefferson had to say about a national bank that would run the issuance of the national currency.
Add in the limits of growth (oil in our current civilizations state) cyclically catching up to us, and we will see more and more extreme volatility in all prices. Much like pre wwII Germany people who are paid weekly will be better off than those paid monthly - with workers eventually demanding daily or even hourly pay rate adjustments.
Jefferson was a wise man. Not wise enough to turn down being President, but we all like our egos stroked even as it destroys us.
DeleteHis influence kept the bankers from completely running things until 1913 -ish. Long after his death.
DeleteHe also had the foresight to purchase claims to vast regions of land from struggling European powers - minimizing conflict with our technological equals/superiors and only having to deal with the Indians to take over that land in the future.
Finally he thought not having a clearly spelled out and agreed on way to get rid of slavery in the U.S. was going to condemn us to some sort of future hideous bloodletting and scaring - he was obviously right.
He also took the presidency on early enough that the political dangers of the position could only be guessed at.
So Yeah, I think the guy did a great job over all. Not good enough to last until today. But good none-the-less.
Yep, but notice the only president to get elected that was so inclined since 1930 was assassinated by a bullet that could change direction mid flight supposedly shot by a marine trained sniper who was himself killed before he could be arraigned or speak to a judge or the press.... Hmmmm....... And the canidates for nomination who speak of that sort of thing are made out to be complete loons by the press .... also hmmm.....
DeleteLincoln might have been killed by those opposed to a non profit reconciliation with the South. How much money did reconstruction make the bankers/industrialists. Lincoln played ball pushing money at the railroads and war industry, I wonder why he dropped the ball in the end. It wasn't love of his fellow countrymen.
Delete