[heroineworshipper]

It's only chaos if U believe the fiction on bls.gov. If U believe your own eyes, there is no deflation. Personally just paid $6 for a bottle of car soap that was $2 last year, $16 for a haircut that was $14 last year, $15 for a movie ticket that was $10 last year. As for chicken, forget it. Completely out of stock.

[MrBill]

Sorry, but how much is KITCO paying to sponsor peakoil.com? If you have an opinion, please share it with us in your own words. If I want to read KITCO I will go there myself. Thanks. Have a nice weekend.

[patience]

Most of the food and household stuff we get at Wally World are up 30% over last year, and the package is smaller. I paid $1.10/lb. wholesale for steel flat bar (used in our shop biz) that was 78 cents/lb. last February, up 40% in 3 months. Folger's instant coffee was $4 for the 7.5 oz. jar last year, now $5.76, up 44%.

It's not just gas and diesel going up here. My savings is melting away faster than I can spend it. Is it inflation, that is,per the money supply definition? I don't know. But it doesn't matter to me what anyone calls it, so long as I know what to expect and can plan for it.

[mattduke]

$this->bbcode_second_pass_quote('patience', 'M')y savings is melting away faster than I can spend it.

[patience]

Undoubtedly good advice. I just don't have enough to worry about that, since most of it will go to preps anyway, and soon. Much is already spent in that direction.

What I am buying in metals is steel and other supplies for our business. Staying in the economy on a day to day basis makes the most sense to me, where the effects of currency variables are dealt with constantly. If I had a LOT of savings, I'd be buying silver. As it is, I'm buying steel, copper, brass, bronze, and hardware, beyond personal preps.

[Revi]

I'm investing in solar, land and cast iron cookware. I see cast iron cookware as the ideal investment. If the world goes crackerdog and we can't get any gas or electricity to cook on, what works? Break out the Griswold! Until then it's fun to collect the stuff. I found a Wapak skillet that still has the ghost of an Erie mark on it. It's fun to get them cleaned off and re-seasoned and see what you have.

Cast iron is the new precious metal!

I think it will work well in either inflationary or deflationary times.

[MarkJ]

32 Ounce Gatorade dropped to 75 cents at WalMart SuperCenter, so I nearly wiped out their inventory. All Tony's Pizzas were 2 for 4 bucks. The Multi-Grain Bread I usually buy for 3 to 4 bucks was 2 for 5 bucks at another supermarket.

We've seen reduced prices in lumber, drywall, professional labor and professional services as well as reduced housing prices in some areas. As some of our commercial suppliers are losing business from large volume accounts like ours, they're becoming more flexible, more competitive and selling at lower margins.

Most everything else is up unless businesses are absorbing inflation due to decreased demand and tough competition. We're shopping for the lowest prices on most everything we buy whether it's hand cleaner, shop towels, disposable gloves, cleaning solvents or building materials, copper, steel iron, fittings, valves, wire, tools, equipment etc.

One of our suppliers stopped delivering 6 days per week and stopped many on-site deliveries, so we took millions of dollars of business elsewhere. Competition is a great thing.

[threadbear]

$this->bbcode_second_pass_quote('heroineworshipper', 'I')t's only chaos if U believe the fiction on bls.gov. If U believe your own eyes, there is no deflation. Personally just paid $6 for a bottle of car soap that was $2 last year, $16 for a haircut that was $14 last year, $15 for a movie ticket that was $10 last year. As for chicken, forget it. Completely out of stock.

[DantesPeak]

The US dollar, which is actually the Federal Rserve fiat paper dollar, has undergone its biggest debasement in history over the last year. (That is the dollar is now mostly backed by mortgage securities and other types of derivatives of unknown value).

Under these conditions, general deflation is almost impossible. However I do agree that housing deflation will continue.

Also the rise in the price of energy is not entirely 'inflation'. Due to PO, the price of energy must increase faster than other prices in general. Because policy makers don't make much distinction between resource depletion and monetary inflation, their policies (in the US) are to fight the effects of inflation with - even more inflationary policies.

[threadbear]

$this->bbcode_second_pass_quote('DantesPeak', 'T')he US dollar, which is actually the Federal Rserve fiat paper dollar, has undergone its biggest debasement in history over the last year. (That is the dollar is now mostly backed by mortgage securities and other types of derivatives of unknown value).

Under these conditions, general deflation is almost impossible. However I do agree that housing deflation will continue.

Also the rise in the price of energy is not entirely 'inflation'. Due to PO, the price of energy must increase faster than other prices in general. Because policy makers don't make much distinction between resource depletion and monetary inflation, their policies (in the US) are to fight the effects of inflation with - even more inflationary policies.

[roccman]

I will not take the time to define terms as there is hardly ever concensus here (or anywhere)...about what words mean. But think of it this way ...IF you have a job today... did you get a 40% raise to keep up with rising wheat costs? If you do have a job you would pick inflation or hyperinflation...if not stagflation.

That should make it crystal clear who is winning. My pick - stagflation (70s style) on steroids....or Hyperstagflation. OF COURSE...it all will lead to deflation - (you too one day will deflate), but it is not very helpful when one is trying to stay in the game as long as possible.

[Kingcoal]

We have both inflation and deflation, no need to have just one or the other. Commodities are going up in price, bubble inflated assets are correcting. Very simple process. In a couple of years, a house now "worth" $550K will be $100K (or less) and gas, now worth $4/gal will be fetching a lot more. It's a zero sum game, free markets exist only to assign prices. When price support disappears, prices go down, when price support strengthens, the price goes up. It works on a item by item basis, which is how you can have hyperinflation in one sector and hyperdeflation in another. I don't think we are headed for stagflation, we don't have that luxury anymore. Houses will sit and sit and sit, becoming targets for thieves and squatters. An empty house is a huge liability and will lose value rapidly as it sits vacant. As a result, people will stay put, become less mobile. Just another vicious cycle courtesy of peak oil and irresponsible fiscal management.

[JoeW]

New word:
CLUSTERFLATION
--commodity prices inflating
--necessity goods (eg. groceries) inflating
--luxury goods deflating
--housing prices deflating
--real wages stagnating or deflating

it's a cluster-f. clusterflation.

[arretium]

Inflation.

[threadbear]

Stagflation.

According to Wikipedia:

Economists have identified the two principal contributing causes of stagflation. First, stagflation can result when an economy is slowed by an unfavorable supply shock, such as an increase in the price of oil in an oil importing country, which tends to raise prices at the same time that it slows the economy by making production less profitable.

[5] Second, both stagnation (recession) and inflation can result from inappropriate macroeconomic policies. For example, central banks can cause inflation by permitting excessive growth of the money supply, and the government can cause stagnation by excessive regulation of goods markets and labor markets. In addition, the combination of these two factors appears more than sufficient to launch an era of stagflation.

For example, policies which promote growth in the money supply to allow consumers to afford higher priced oil contribute as a cause for runaway inflation, even if implemented to fight stagnation.


The global stagflation of the 1970s is often blamed on both causes: it was largely started by a huge rise in oil prices, but then continued as central banks used excessively stimulative monetary policy to try to avoid the resulting recession (stagnation), causing a runaway wage-price spiral.

http://en.wikipedia.org/wiki/Stagflation

I'm with you, Roccman! Get ready for the '70's Disco! Lovebeads! bad hair![smilie=icon_rr.gif]

[Petrodollar]

...Well, I noted the words "stagflation" and "deflate" re the current "commodity bubble." Just an fyi...

http://news.yahoo.com/s/ap/20080606/ap_ ... all_street

$this->bbcode_second_pass_quote('', '[')b]Stocks fall sharply on surge in oil, jobs data
June 6, 2008
AP Associated Press

NEW YORK - Wall Street plunged Friday on two troubling economic developments: oil prices that surged more than $10 a barrel to a fresh record and a jump in unemployment that was much larger than the market anticipated. The Dow Jones industrial average fell more than 360 points.

(excerpt)

[quote]"I think the biggest concern right now is oil and it's potential for a stagflationary environment," said Bill Knapp, investment strategist for MainStay Investments, a division of New York Life Investment Management. Stagflation occurs when stalling growth accompanies rising prices.

In late afternoon trading, the Dow fell 365.58, or 2.90 percent, to 12,238.87.

[Twilight]

$this->bbcode_second_pass_quote('threadbear', 'S')tagflation.

[threadbear]

Charles Hughes Smith:

"My problem with setting money supply as the defining measure of inflation and deflation is practical. This pronouncement leads to an obsession with measuring money supply rather than with the relative loss or gain of purchasing power"

and:

"In a truly deflationary setting, then my cash buys more next year than it does now. This was the case in the Great Depression. You could buy more food, more shelter, etc. etc. every year. Now that's deflation.

Pardon my skepticism when "deflation" is announced due to shrinking money supply yet prices are rising, i.e. purchasing power is declining, not rising. This makes a mockery of the concepts "deflation" and "inflation" which are a priori measures of price.

Rather than argue about measuring money supply, which I find particularly useless and distracting, let's revert to discussing supply and demand."

http://www.oftwominds.com/blogjan08/pur ... power.html

[Daculling]

Nice, thanks for that. I agree, in the current situation he is correct however in a movement to the extremes I'm afraid he is wrong.

[threadbear]

From same article:

If a haircut drops in price but your petroleum bill doubles, are you living in an inflationary or deflationary economy? Who cares? The reality is, you spend $500 a month on petroleum (say) and $25 on a haircut (okay, it's a Supercut), then are you wowed by the "deflationary" reduction in your expenses?