When price inflation is finally recognized as general inflation expect to see the whole range of 1970's policy framework brought back to bear.
Wage and price controls, particularly in the energy and food sectors. Soft cop, tough cop attitutes towards enforcement. Media and public ridicule or shame towards companies that raise prices; ie the forever forlorn argument about gas station price fixing and collusion, that has been disproved time and again without end.
New branches of the government were created in the 1970's to deal with new issues; expect many more new ones to deal with the new emerging problems with more taxation rising in tandem. When formal rationing appears then you know freedom is gone and fascism has become the new norm, (by then its far to late for change anything).
PeakOil is You
Hyper inflation is here now
Re: Hyper inflation is here now
by Rod_Cloutier » Wed 17 Nov 2010, 00:37:34
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Re: Hyper inflation is here now
by Fiddlerdave » Wed 17 Nov 2010, 02:11:56
$this->bbcode_second_pass_quote('diemos', '')$this->bbcode_second_pass_quote('Outcast_Searcher', '
')Obviously, long U.S. bonds and wildly inflating commodity prices can't both be right
')Obviously, long U.S. bonds and wildly inflating commodity prices can't both be right
Not only can they both be right, that is exactly what one would expect in a resource constrained world.
Wealth is created by a combination of capital equipment, labor and natural resources. For the past 150 years the limiting factor in wealth production was capital equipment. The more machines you created to do our work for us and the more machines you created to extract fossil fuels to power them the more wealth you could have.
Now we are entering a world in which availability of fossil fuels will be the limiting factor in wealth creation. The return on capital equipment creation should go negative as we won't have the energy to run the capital equipment we already have. Anything that requires energy to produce should go up and up compared to prevailing wages.
In the 70's we had a taste of what a resource constrained world would be like when the middle east embargoed us. The result was stagflation. A contracting economy with rising prices.
Rising commodity prices with stagnant wages is called "getting poorer".
Get used to it. You'll be living with it for the rest of your lives.
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