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| Economy |
| Economist Kevin Cockrane - 'Prices Are Never Going Down' |
| 2024-06-09 |
| [American Thinker] Inflation is like the weather. To paraphrase Mark Twain, "everybody talks about it, but nobody does anything about it." Biden tells us he’s fighting inflation, and it seems as if we hear every day in the news about the Fed leaving interest rates unchanged to fight inflation. But prices are still high and rising. The latest numbers just released show that prices year to date are still rising faster than expected. It’s true that two years ago, inflation peaked at around 9%, and today, it’s hovering in the mid-3s. So why haven’t prices come down? It’s a common misconception, often fueled by the crowd on the left alleging corporate greed, but inflation isn’t the price level — it’s the rate of increase in prices. A reduction from 9% to 3% doesn’t mean that prices should come down 6%; it means that now they will go up at 3%. Corporations may be greedy, but that has nothing to do with the inflation rate. The government, on the other hand, plays a significant role in managing inflation and deflation through its monetary and fiscal policies. Prices going down — deflation — on the other hand, is a different story. When prices actually decline, corporations often resort to cost-cutting measures, usually at the expense of wages and benefits. And if the dollars in your pocket are worth more because of deflation, your loans or debts become more costly in real terms. This is why most economists agree that deflation is not a good thing. Think of deflation this way: if an apple costs $1, and you borrow $1 from someone, promising to pay it back in a year with no interest, if prices are stable, you’ll pay back $1 — exactly one apple. But if, because of deflation, apples at year-end cost only 95 cents, and since you owe $1, you are essentially paying back 1.05 apples. In real terms, your borrowed apple costs more than one apple when you pay it back because of deflation. |
| Posted by:Besoeker |
| #17 You know how they purposed flour sacks back in the Great Depression days to be clothing material, need to do the same thing with the dollar, make them absorbent and washable. Dad, I spilled my drink! Grabs dollars out of the wallet to wipe it up. What is your level of concern right now, ks? I could do local stats like food pantry and children take home care packages subscription has tripled, articles like this (why is it everytime inflation pops off experts are like 'reducing prices is bad too'?). Mine is, the grocery store is ultra stocked on TP from every brand in their catalog. |
| Posted by: swksvolFF 2024-06-09 19:57 |
| #16 ^I worked at C&S Supertte on Hwy 78 just into Gwinnett County 1977-80. Checked the tire and oil on every customer and we had a bait house. Spent a lot of time with Phil Knuxsie Kneikro gathering crickets and red wigglers for him to fish Yellow River And my senior pranks at Parkview were epic, I could release 10,000 crickets for noting |
| Posted by: Beavis 2024-06-09 18:53 |
| #15 Today's silver market @ 29.23 a ounce dime - $2.11 quarter - $5.28 half dollar - $10.57 Fiat money is worth less the more they print (or create with a push of keyboard key) |
| Posted by: Procopius2k 2024-06-09 18:51 |
| #14 #12 - I worked a Sinclair/Fina gas station and walked the mile to get to work. Pumped Reg at 16.9cents back in 1969-70. I heard rumors Premium at Sunoco was called 220 or 260 and was for the Muscle cars at 30+cents. BTW: I usually made even money picking up soda bottles for the 2 cent deposit walking to and from work to buy my work snack ... and RC and a Moon pie or a honey bun. |
| Posted by: NN2N1 2024-06-09 18:44 |
| #13 .....no streaks. |
| Posted by: Besoeker 2024-06-09 18:27 |
| #12 ^ Yes, the price of paper towels has skyrocketed. I've noticed few gas stations no provide paper towels at the pump. Many of the windshield wash buckets are dry and brushless. When I was a kid pumping gas, you damn well better not forget to clean the windows....and no stress. "High Tes" gas was .28 cents per gallon. Somehow Stardard Oil and Texaco made money. |
| Posted by: Besoeker 2024-06-09 18:26 |
| #11 Pardon me if prices going down is bad because corporate would have to lower wages to match lower prices doesn't make me cry. Watermelon, small bottle of lime juice: $11 8 Pack paper towels, box tall kitchen bags: $55 |
| Posted by: swksvolFF 2024-06-09 17:52 |
| #10 ^ The very next day. |
| Posted by: Besoeker 2024-06-09 16:05 |
| #9 Remove all the obstruction and red tape and let the energy people 'drill baby drill' and prices will drop. |
| Posted by: Procopius2k 2024-06-09 15:43 |
| #8 Not too long ago, the diesel pumps stopped at $100 during a 'fill-up'. Don't know what the top end is now. |
| Posted by: Skidmark 2024-06-09 13:13 |
| #7 Japan ended its zero and/or negative interest rate era earlier in 2024. This era lasted about 8 years. Their version of the federal funds rate is now below 1% but positive. A lot of factors influence the economy of Japan, some external (like the price of oil) and some internal (like their version of a Value Added Tax) and some that are a hybrid of internal and external factors (like the response to Covid). IMO, the interesting thing about Japan is that per capital GDP increased by over 200% between 1985 and 1995 (led by manufacturing including autos and electronics) and has basically fluctuated between 1995 and the present. |
| Posted by: Lord Garth 2024-06-09 12:56 |
| #6 They also had (or have) yield curve controls and, IIRC, negative interest rates to "stimulate the economy" (just the the ECB). How did that work out? |
| Posted by: DooDahMan 2024-06-09 12:25 |
| #5 Japan had about 20 years of almost zero inflation (some years with actual deflation) beginning in 1998. Several factors involved. Real estate crash. Population began to decline. Auto market transition. |
| Posted by: Lord Garth 2024-06-09 12:23 |
| #4 Corporate greed example given: Family member runs a bread route. According to his route book. The number loafs sold are down, but his route is showing a better profit margine due the price increases. |
| Posted by: NN2N1 2024-06-09 10:29 |
| #3 The govt likes to maintain inflation at a level equal to the prime interest rate it pays on securities, so it essentially borrows money for free. Your needs don't factor into the equation. |
| Posted by: ed in texas 2024-06-09 10:03 |
| #2 Price hikes and boycotts: Is trouble brewing at Starbucks? |
| Posted by: Skidmark 2024-06-09 07:27 |
| #1 Between Shrinkflation, and the 21++% general inflationary norm across the US Economy. More and more US Citizens are filing bankruptcy. But then the DC Swamp gave: * $$$ Billions to ILLEGALS entering the US, Clothed, housed, care for and feed Millions of illegals that steal US Jobs. All while homeless US citizens and US Veterans cannot get 1/4 of the same treatments. * Donated $$$ Billions to Ukraine and other countries, * $$$ Billions went to wallet filling projects, * $$$ Billions went to setting and maintaining the Welfare Plantations for votes. Something is not right when DC elected persons suddenly increase their wealth 3 to 5x's between elections. Or their families suddenly find $ Million Dollar Board of Director positions. But then with all that DC & State Level Swamp $$$$ waste. US retirees and disabled were screwed over. Like that joke of the 2023 3.2% COLA. By the same DC Swamp that is constantly milking us for more tax $$$$ to give to others. BTW: ALERT: Reports of a $600 payment increase in June are FALSE: There will be NO COAL increase until maybe in January 2025. |
| Posted by: NN2N1 2024-06-09 06:10 |