Are we seeing normal or excessive inflation?

[KosherCowboy]

Gas aside, are prices on the rise? Over the last few days loaded my kart up at HEB, Central Market and last night Wal-Mart. An older friend tells me with the exception of the ' odd-even gas days you could fill up on based on your plates' he thinks inflation is on the rise at a rate not seen since Jimmy Carter won the presidency. Is it ? I know there is a formula used to determine if rising prices are based on normal rises over time vs excessive rises. Not talking about home prices here or health care; I am referring to basic goods and services. Even my shrink went up 8.33% this year per 30 minute session. Is this inflation normal or do we need to stop hiring peanut farmers and community activists involved with haterz and kriminals to the highest office in the land and start hiring Hollywood actors instead like Reagan?

Eggs, produce, meats, paper goods, kitchenware, socks, detergents, batteries ( all up, considerably). My favorite Tontinos recession buster frozen pizza for .99 cents went to $1.09 now is at $1.29 in some stores...

I need a new vehicle and am reducing myself to a visit to the Hyundai and KIA lots this week, ( not bad cars actually) but their sales are booming as Americans downsize to fight not only rising gas prices but the cost of everything.

OK economists, take it away. Tell me why prices are shooting through the roof.

[sixxbach]

The simple man version to me is that it's all related to gas. The delivery companies gas bills are higher to transport goods to HEB etc. Their increased cost must be passed down to everyone else....

sixx

[BonerJams03]

Right you are sixxbach. Oh well, let's borrow more money from China and buy more oil from the middle east.

[KosherCowboy]

I think gas is part of it, even before the recent ' gas spikes,' I noticed prices creeping higher. I don't think gas is the only reason, but is a big factor. It might account for 5-6 slices of the 20 inch Inflation Pie but something is accounting for the other 2-3 slices of the pie...

Pepperoni and mushrooms most preferred...even they went up

[Gulf2]

Originally Posted by KosherCowboy

G... Over the last few days loaded my kart up at ... last night Wal-Mart.

You are a bigger, stronger man than I...

[Yssup Rider]

I'm not an economist but know that rising food prices have wrought havoc on a lot of local businesses and families around the world. Rising gas prices have certainly had something to do with it, but when you look at some of the natural disasters to staple food growing regions in recent years, coupled with a rise in indigent population worldwide, it was easy to predict that this day would come.

Here's an interesting explanation by the World Food Programme, and while it certainly isn't enough to get you any less angry over the cost of things, it does seem to put things into a more global perspective.

I will also say that the fortunes of food prices over here are tied closer to world market trends than we'd like to believe.

As far as gas -- FUCK THE OIL COMPANIES! -- and if I could, I'd downsize to a Mini tomorrow. Something electric, which, BTW, the government is now looking for a way to tax in terms of consumption.

arrgh!

[WyldemanATX]

It is inflation. Oil is at 107 bucks a barrel and the price of gas is more now than when oil was at 155 bucks a barrel. That is what I would define as a weak US dollar. If gas goes to 5 dollars a gallon I will do a voluntary repo on my car and start using the bus.

[PornPet69]

I haven't noticed anything yet other than the gas prices but I contribute that to the situation in the middle east. But with all this fake money we keep bailing ourselves out with, inflation will be on the rise eventually. When lap dances rise to $25-$30, then maybe I'll notice.

[KisserSoze]

Inflation. Rising prices. All commodities are seeing huge price increases, not just oil. Corn, coffee, cotton, copper, cattle. You name it, it costs significantly more than it did yesteryear.

Why? Multiple reasons. An aggressive easing of US monetary and fiscal policy to prevent a recession from being a depression. Dollars are plentiful, but losing value and buy less with that lower value. Worldwide demand is growing. Instead of millions of Americans and Europeans seeking to buy there are now billions of Asians and Latin Americans joining the purchasing party. Inflation expectations rise and contribute to a buy, buy, buy mentality. Speculation builds and prices go up.

Think of it in terms of a recent American phenomenon - housing. Easy money in the form of motgages flowed into the market. Millions enter the market and pursue their homeownership dream. A huge demand plus available cash yield rising prices.

[Slotgoop]

To answer your question, you first have to ask is quantitative easing normal? The FED has been increasing the money supply for months and what's happening now is no surprise to anyone except our gov't apparently. With no backbone behind the dollar, there's surplus of foreign dollars looking for a safe haven, and commodities are it. All those dollars chasing a fixed amount of commodities drives their price up, along with the price of the goods that use them. There won't be a "normal" until we complete this cycle of the dollar losing its' status as the worlds' reserve currency and some other currency takes it place. And the new "normal" won't be anything like the old, just look at what happened in the UK in the 50-60s when the dollar displaced the pound sterling as the reserve currency of choice for the global economy.

[Yssup Rider]

I believe your question was, normal or excessive inflation, KC!

I was always taught that some inflation was good and necessary. But I don't buy it. I think it's all excessive.

Of course, if the folks on Wall Street would pull their heads out of their asses for a while and look at the here and now rather than "Trading Places"ing it, we may be better off. I blame the rise in oil prices on speculators. I'd like some of those fellas to fill my tank rather than stick it up my ass!

But for me the answer is B - Excessive!

[Guest020916]

USD is inversely proportional to cude oil prices since oil is purchased in USD (WRC - World Reserve Currency, not World Rally Championship).

Food prices have gone up (as most materials and commodities). There have been food shortages (e.g. Russia and wheat) as well as increased demand (e.g. corn due to ethanol). India and China have been consuming materials for growth.
Recent tsunami/earthquake damages to Japan will also drive commodity and material pricing. Some company revenues are affected by supply-chain dependency on Japan (which can effect the market when earnings are missed in quarterly earnings report).

The US can keep printing money and using them for bail outs and what not as long as the printing is done by the USA & USD still has WRC status. If USD is replaced by another currency for WRC, the crash in the US economy will be catastrophic.

Middle east causing the rise in crude oil? I think it's market manipulation since Libya is not a huge producer in the Middle East and the US doesn't really consume the oils produced there (USA buys from this continent - Canada & S. America). Compared to Europe, our gas prices are very cheap & affordable (remember to convert Liters to Gallons). It would be interesting to see how the car market & lifestyles will change if gas reaches $6/gallon (close to current pricing in London).

[rCoder]

The weakening (devaluation) of the dollar is the primary cause. Higher prices are the result. Some of the cost increase in oil is from speculation - due mostly to regional instability (i.e., US backed military action).

On the QE (devaluation), keep in mind that the good ol' US of A no longer prints money. That is handled by the private company known as the Federal Reserve.

[averageTxJoe]

rCoder - I concurr with your comments. It is a crying shame that we the people gave control of our economy to a private banking system ... the Federal Reserve in 1913. The last president who had the balls to over rule this decision was assassinated. Since then the world banking system has been hell bent on taking over every countries economy in the world. And nowadays the dollar is not backed by anything so every time the Fed prints money it devalues the dollar. And we the people pay for that money to be put into circulation. Not only is inflation excessively on the rise, the products we buy are less for more money. If this country got rid of the Fed and controlled our own currency everyone would be wealthy. But the filthy greedy rich will not allow that to happen because they OWN our government. Based on that they OWN the people as well.

The question I have is when will the american people stand up for this country? Everyone is busy chasing the carrot called the american dream but do not realize that 99% of the population will never see that dream. Maybe that is why is is called a dream.

[Slotgoop]

While that is certainly the next first step I think that needs to happen, other countries also need to do their part too. China for instance needs to stop artificially regulating their currency value and let it float with market demand. The really sad thing is that 25 years ago we started trading jobs for short term profits in the USA and moved so many industries off shore. Because with the dollar dropping relative to other currencies, we could be making some kick ass profits now if we still had local capacities.