Inflation, There's No Inflation

[Jccarlton]

Just don't have a picnic this year:
http://www.dailymail.co.uk/news/article ... ation.html
Thank you Chairman Bernanke.

[Diogenes]

Just don't have a picnic this year:
http://www.dailymail.co.uk/news/article ... ation.html
Thank you Chairman Bernanke.

I saw a comment from Glenn Reynolds (Instapundit) the other day: (paraphrase)

"We are having Inflation and Deflation at the same time. Everything I buy is inflating, and everything I own is deflating! "

[hanelyp]

Inflation is most acute in expended goods that are hard to do without, food and energy.

Deflation is apparent in some highly durable goods, real estate. I would argue that we've already seen inflation in real estate during the easy credit fueled bubble.

[chrismb]

Inflation is most acute in expended goods that are hard to do without, food and energy.

Deflation is apparent in some highly durable goods, real estate. I would argue that we've already seen inflation in real estate during the easy credit fueled bubble.

An interesting observation, PH. I think that is quite incisive.

However, durable commodities are suffering whilst consumables are inflating may not be simply down to previous/present 'bubbles' bursting. I think we should take stock of this observation and assess what fundamentals in the world economy could have lead to this - in case these pre-cursors are indicative of issues much deeper than just bubble economies [that every country has had in the past, and has lived through].

I would take a 'blind stab' at these;

a) globalisation,
b) 'world' currencies,
c) 'free market' not being allowed to work [viz. banks not being allowed to fail].

I think there is something very distorting and long-term destructive about the way world economies are 'working' these days that do not permit proper 'free market' price corrections of currencies. Normally - as in 'in the past' - when one country is doing badly its currency declines making the output of that country cheaper and thus more attractive for foreign purchase - viz. self-correction. This has all but halted now that sovereign debt is largely owned by other countries, such that if one country devalues, then it devalues the holdings of other countries.

The other factor over this global pricing is transportation. Yup, I suggest the humble shipping container may be playing a bigger part in global economic implosion than any other single driver. Again, by 'levelling' the price of goods globally, local self-correction of currencies is not happening as it should.

These are new thoughts to me... I will have to go and meditate on it all a while... it is fundamental that durable commodities should be stable and the price of these cannot tumble across the whole globe due to an economic bubble alone.

I suspect, then, that we are now on a 'trajectory' towards a global currency and until we get there I think we're in bigger trouble than I thought!!.... Thanks [a bunch!! ] PH for getting me worried about this!

[Jccarlton]

Inflation is most acute in expended goods that are hard to do without, food and energy.

Deflation is apparent in some highly durable goods, real estate. I would argue that we've already seen inflation in real estate during the easy credit fueled bubble.

An interesting observation, PH. I think that is quite incisive.

However, durable commodities are suffering whilst consumables are inflating may not be simply down to previous/present 'bubbles' bursting. I think we should take stock of this observation and assess what fundamentals in the world economy could have lead to this - in case these pre-cursors are indicative of issues much deeper than just bubble economies [that every country has had in the past, and has lived through].

I would take a 'blind stab' at these;

a) globalisation,
b) 'world' currencies,
c) 'free market' not being allowed to work [viz. banks not being allowed to fail].

I think there is something very distorting and long-term destructive about the way world economies are 'working' these days that do not permit proper 'free market' price corrections of currencies. Normally - as in 'in the past' - when one country is doing badly its currency declines making the output of that country cheaper and thus more attractive for foreign purchase - viz. self-correction. This has all but halted now that sovereign debt is largely owned by other countries, such that if one country devalues, then it devalues the holdings of other countries.

The other factor over this global pricing is transportation. Yup, I suggest the humble shipping container may be playing a bigger part in global economic implosion than any other single driver. Again, by 'levelling' the price of goods globally, local self-correction of currencies is not happening as it should.

These are new thoughts to me... I will have to go and meditate on it all a while... it is fundamental that durable commodities should be stable and the price of these cannot tumble across the whole globe due to an economic bubble alone.

I suspect, then, that we are now on a 'trajectory' towards a global currency and until we get there I think we're in bigger trouble than I thought!!.... Thanks [a bunch!! ] PH for getting me worried about this!

The most disruptive technologies are the one you never see coming:
http://www.amazon.com/Box-Shipping-Cont ... 904&sr=8-3
Very interesting book.