THE Stagflation Thread (merged)

by **Leanan** » Wed 27 Apr 2005, 12:10:19

New orders for long-lasting goods posts biggest drop since September 2002: http://money.cnn.com/2005/04/27/news/ec ... /index.htm

Nasty surprise, that perhaps wasn't so surprising. A lot of indicators are pointing to a soft economy. The word "stagflation" is coming up, more and more often: http://www.fcnp.com/507/krugman.htm

by **Anjorni** » Wed 27 Apr 2005, 13:28:58

I just heard about that this morning as well - I remember hearing something like 2% drop in orders for durable goods...

I have a feeling we'll be hearing that word (and this situation) more and more - people actually using their 'durable goods' for more of their usable life. - wow, what a concept - *Repair a durable good* - now that's something not heard of... :rolleyes:

You know though, I find it funny that people expect there to always be a growing number of durable goods... They're durable for a reason, right? So shouldnt these numbers 'normally' be about flat?

I suppose stagflation is something that peak oil will bring about naturally though, right? As the price of energy goes up (which is the basis of EVERYTHING) no real growth is taking place - simply more expensive base. Eventually the price of goods will be so high, people really start conserving, and cutting their spending on other non-essential items (which they're already doing)...

Doesnt take a rocket scientist to see where this is heading...

by **Leanan** » Wed 27 Apr 2005, 14:14:58

$this->bbcode_second_pass_quote('', 'Y')ou know though, I find it funny that people expect there to always be a growing number of durable goods... They're durable for a reason, right? So shouldnt these numbers 'normally' be about flat?

by **RiverRat** » Wed 27 Apr 2005, 15:48:48

Temporarily ... it doesn't seem to matter.

Stock market is up today ... oil prices are down today.

The Prez planted a big wet one on a SA official, gave some lip service to his energy policy, and everything seems right with the world.

whew ... that was a close one :razz:

by **Stoic** » Wed 27 Apr 2005, 16:08:42

$this->bbcode_second_pass_quote('RiverRat', 'T')emporarily ... it doesn't seem to matter.

Stock market is up today ... oil prices are down today.

The Prez planted a big wet one on a SA official, gave some lip service to his energy policy, and everything seems right with the world.

whew ... that was a close one :razz:

by **BitterSweetCrude** » Wed 27 Apr 2005, 16:10:50

$this->bbcode_second_pass_quote('Leanan', 'N')ew orders for long-lasting goods posts biggest drop since September 2002:

http://money.cnn.com/2005/04/27/news/ec ... /index.htm

Nasty surprise, that perhaps wasn't so surprising. A lot of indicators are pointing to a soft economy.

The word "stagflation" is coming up, more and more often:

http://www.fcnp.com/507/krugman.htm

by **RiverRat** » Wed 27 Apr 2005, 17:06:12

$this->bbcode_second_pass_quote('Stoic', '')$this->bbcode_second_pass_quote('RiverRat', 'T')emporarily ... it doesn't seem to matter.

Stock market is up today ... oil prices are down today.

The Prez planted a big wet one on a SA official, gave some lip service to his energy policy, and everything seems right with the world.

whew ... that was a close one :razz:

by **ONASIS** » Fri 29 Apr 2005, 09:54:30

Do you think that PO will bring about a state of Stagflation (??), Where the economy isn't growing but prices are - not a good situation for a country to be in I'm sure ! This occurred to a great extent in the 1970s, when skyrocketing oil prices further slowed economic growth. The effects of inflation were made considerably worse by stagflation.

I can see that Global asset inflation is at play now which is causing huge residential property + commodity price increases. China + India, for example, are acting like a hugh magnet for commodities such as oil, scrap metals, steel products, and cement. This in turn is pushing up Ocean Freight rates both for dry cargo + oil Tankers (also increasing demand for marine fuel).

In the UK residential property has gone up 300% in the last 3 years alone + consumers have built up debts of over GB£ 1 Trillion !! Don't know figures for USA ?? In effect, money, currencies, etc., have been devalued over the last 3 years as they now purchase less - i.e. assets have appreciated by 300% - whereas your money in the Bank would only have grown by say 12% during this period !!

So, the developing economies are now acting as the 'offshore' manufacturing areas for the richer 'Western' Nations. In effect, the 'West' has evolved from agriculture through a 'Production' based economy and is now a 'Consumption' based model.

Of course, in order to sustain Global Expansion, this model needs growth + ENERGY !! i.e. No ENERGY = NO GROWTH !! If we are in a PO zone then I fear that this debt bubble is going to burst + when it does it will make 1929, and the years that followed, look like a walk in the park !

by **vegasmade** » Sun 01 May 2005, 06:57:55

onasis you are very right. regardless of oil availability in the future, it's the economic effects that may be the most troubling. in our current state of global capitalism, cheap energy is the driving force in growth. as energy prices rise, growth slows. unfortunately, growth is necessary. here in the u.s., a minimum of 2% growth must be maintained just to service the national debt. that's the same debt our leaders claim will be cut by '09, while they are spending at an alarming rate.
every day a huge amount of money flows into this country from foriegn sources, in the way of investment. if that money doesn't come, our own bankers freak out. any significant hiccup in monetary flow could trigger a quick and lethal crash. our dollar is slowly declining, the stock market is dipping, and energy prices are rising-not a good combonation.
The great depression, and more importantly how we worked our way out of it, isn't a good indicator. At that time america didn't even import oil. it was literally dirt cheap. nowadays, that level of recovery is all but impossible. not to say it can't be done, but it would require the kind of resolve we just don't have.
last i checked, the american people were still mostly ignorant to the idea. our politicians can call special sessions to save one life, but aren't addressing all the lives that will be affected by peak oil. and any hope of riding this out intact is dependent on knowledge and action. even if that means just figuring out where we stand on the curve (i.e. what's been used, accurate reserve data,...), it would be a good start. but instead of coming clean, our governments are posturing like it is very real and very threatening.
ultimately i can't see this working out at all. unless of course there remains time to ween ourselves off oil. with 20 years and significant financial resources, a smooth transition is possible. it will mean a diminished lifestyle and other hardships, but it is the least painfull option. then again, VP Dick has said that the american way of life will not be sacrificed. if not us, who? the kind of mitigation needed can only be handled at the national/international level, yet those kinds of plans aren't being formulated. and they won't. global cooperation in a time of globalist division impossible.
information and time are our only hope, and both seem to be in short supply.

by **spot5050** » Tue 03 May 2005, 19:28:28

link The Fed is caught in the middle of conflicting economic data. In a statement accompanying their decision to increase interest rates, they say;
$this->bbcode_second_pass_quote('Fed', 'R')ecent data suggest that the solid pace of spending growth has slowed somewhat, partly in response to the earlier increases in energy prices.

by **nero** » Tue 03 May 2005, 22:37:57

$this->bbcode_second_pass_quote('', '3'). Their emphasis on "Longer-term inflation expectations remain well contained" is odd. Suggestions anyone?

by **MicroHydro** » Tue 03 May 2005, 23:07:24

$this->bbcode_second_pass_quote('nero', 'S')o instead of higher commodity prices feeding through into persistent inflationary expectations like in the 1970s all that will happen is the cost of everything will go up and the middleclass will get poorer.

by **threadbear** » Tue 03 May 2005, 23:18:30

Micro, I LOVE Ravi Batra. He uses the term "inflationary depression" which is perfect.

by **DantesPeak** » Tue 03 May 2005, 23:29:20

$this->bbcode_second_pass_quote('spot5050', '')$this->bbcode_second_pass_quote('Fed', 'P')ressures on inflation have picked up in recent months and pricing power is more evident. Longer-term inflation expectations remain well contained.

by **spot5050** » Wed 04 May 2005, 19:33:12

$this->bbcode_second_pass_quote('spot', '3'). Their emphasis on "Longer-term inflation expectations remain well contained" is odd. Suggestions anyone?

by **FatherOfTwo** » Wed 31 May 2006, 15:09:04

I was reading one of the articles posted in the news section today, when I came across this statement:
$this->bbcode_second_pass_quote('', ' ')Pessimistic forecasts of a repeat of the “stagflation” of the 1970s appear unlikely. Global currency and bond traders are quick to punish any government that tries to inflate its way out of a squeeze with easy money policies. Globalization and technology will make the difference this go-round.

by **mark** » Wed 31 May 2006, 15:45:50

That single excerpt alone invalidates, for me, everything else he says. According to the website he appears to be an establishment economist; though even widely quoted economist rarely venture into the money creation quagmire. Even a cursory look at the numbers show central banks around the world inflating their currencies at 9 to 10 percent a year. The bond market weenies cry nary a peep. With real inflation in the US at 9% (according to this mornings Mogambo), they happily buy bonds paying 5.25%! Some vigilantes.

The more interesting question for me is that these people keep saying obviously ludicrous things and the press just laps it up. Only Ron Paul is telling the truth; the rest of ‘em mere hacks.

Methinks it will get even loonier.

PS yes mr bill, what say ye?

by **NeoPeasant** » Wed 31 May 2006, 19:51:08

I think the economic troubles of the 70's are coming back with a vengeance. I'd call what's coming "Stagflation on Steroids"

by **Aimrehtopyh** » Wed 31 May 2006, 21:27:52

Not a very good label, Neo, because steroids promote growth. I'd prefer to call it stagflation with leprosy and diarrhea. [smilie=pottytrain5.gif]

by **MrBill** » Thu 01 Jun 2006, 07:22:59

$this->bbcode_second_pass_quote('FatherOfTwo', 'I') was reading one of the articles posted in the news section today, when I came across this statement:
$this->bbcode_second_pass_quote('', ' ')Pessimistic forecasts of a repeat of the “stagflation” of the 1970s appear unlikely. Global currency and bond traders are quick to punish any government that tries to inflate its way out of a squeeze with easy money policies. Globalization and technology will make the difference this go-round.