A Conspiracy of Counterfeiters

[luckytxn 2,265]

Which would help the housing market. Which would help the job market. Inflation also helps exports and stifles imports. Which also helps the jobs market and the trade balance. Not the worst that could happen as far as I'm concerned.

If it were that easy than you would be right. I also remember during Carter that the only tools the Federal reserve had to combat the runaway inflation was to raise interest rates and restrict the money supply. That meant the ones who were having such a hard time servicing their debt started to go under as they could not pay their mortgages and pay their bills. (It led to the savings and loans crisis) It was possible for some to refinance their mortgages and tap into that increased property valuation. (It actually takes up to two years for the higher appreciations to do this) The new loans were going for up to 15% to 20% though. It saved them for awhile but then they had to start paying a lot more on their mortgages along with the inflationary bills. Soon the extra money was gone and they were left paying the higher mortgages with their pay. Many lost their azzes. Very few could get loans anyway also to buy a house or just didn't want to pay the high interest rates so housing slumped big time. Thus we had a lot of unemployment start in that industry and any industry that was attached to that.

Like I said it was brutal time for everyone and it is hard to see that some would like to revisit that time. Also it is a lie that wages kept up with the inflation. NO RECEIVED 30% RAISES evey 3 months. No one received that in a year.

[luckytxn 2,265]

I've seen my wages increase 10%+ each year much more than inflation. But then i'm not working a low skilled manufacturing/service job. The only way low skilled workers can actually put wage pressure on employers is by unionizing. A single person is too easy to replace. Inflation is going to be around no matter what. Since employers are not interested in paying employees more, what are the workers going to do about it?

And Unions usually eventually price themselves and their companies out of the market and thus loss of jobs have occurred.

[Mr. Big Dog 10,747]

I've seen my wages increase 10%+ each year much more than inflation. But then i'm not working a low skilled manufacturing/service job. The only way low skilled workers can actually put wage pressure on employers is by unionizing. A single person is too easy to replace. Inflation is going to be around no matter what. Since employers are not interested in paying employees more, what are the workers going to do about it?

Yup. Similar here. I'm up about a third since '07.

[Dan J 277]

If it were that easy than you would be right. I also remember during Carter that the only tools the Federal reserve had to combat the runaway inflation was to raise interest rates and restrict the money supply. That meant the ones who were having such a hard time servicing their debt started to go under as they could not pay their mortgages and pay their bills. (It led to the savings and loans crisis) It was possible for some to refinance their mortgages and tap into that increased property valuation. (It actually takes up to two years for the higher appreciations to do this) The new loans were going for up to 15% to 20% though. It saved them for awhile but then they had to start paying a lot more on their mortgages along with the inflationary bills. Soon the extra money was gone and they were left paying the higher mortgages with their pay. Many lost their azzes. Very few could get loans anyway also to buy a house or just didn't want to pay the high interest rates so housing slumped big time. Thus we had a lot of unemployment start in that industry and any industry that was attached to that.

Like I said it was brutal time for everyone and it is hard to see that some would like to revisit that time. Also it is a lie that wages kept up with the inflation. NO RECEIVED 30% RAISES evey 3 months. No one received that in a year.

Inflation during that time was not 30% per quarter, more like 10-13% per year. High, but not crazy high. There have been years where the inflation rate was even higher.

[Dan J 277]

And Unions usually eventually price themselves and their companies out of the market and thus loss of jobs have occurred.

Unions wont solve all problems like automation. There have also been unions that have gotten concessions from companies that the company couldn't follow through on (Although it takes both sides to make an agreement). But what other tool does an average worker have?

[Mr. Big Dog 10,747]

If it were that easy than you would be right. I also remember during Carter that the only tools the Federal reserve had to combat the runaway inflation was to raise interest rates and restrict the money supply. That meant the ones who were having such a hard time servicing their debt started to go under as they could not pay their mortgages and pay their bills. (It led to the savings and loans crisis) It was possible for some to refinance their mortgages and tap into that increased property valuation. (It actually takes up to two years for the higher appreciations to do this) The new loans were going for up to 15% to 20% though. It saved them for awhile but then they had to start paying a lot more on their mortgages along with the inflationary bills. Soon the extra money was gone and they were left paying the higher mortgages with their pay. Many lost their azzes. Very few could get loans anyway also to buy a house or just didn't want to pay the high interest rates so housing slumped big time. Thus we had a lot of unemployment start in that industry and any industry that was attached to that.

Like I said it was brutal time for everyone and it is hard to see that some would like to revisit that time. Also it is a lie that wages kept up with the inflation. NO RECEIVED 30% RAISES evey 3 months. No one received that in a year.

When you start looking at double digit inflation then things get ugly (late 1970's to early 1980's). When you start having sustained deflation (Great Depression), the late 1970's don't look so bad in comparison.

If anyone is dumb enough to re-finance a 8% fixed rate mortgage at 15%, then they surely deserve what they're getting.

[luckytxn 2,265]

Inflation during that time was not 30% per quarter, more like 10-13% per year. High, but not crazy high. There have been years where the inflation rate was even higher.

Never said it was that high of inflation. Most realize this but it bears repeating though. The inflation rate is an average of all prices. Most realize that basic stuff is the prices that will be hitting the consumers. These prices are what the consumers need to just survive. Since these are now eating into the wages then other discretionary spending lessens and that creates less demand and thus depressed employment.

[luckytxn 2,265]

Unions wont solve all problems like automation. There have also been unions that have gotten concessions from companies that the company couldn't follow through on (Although it takes both sides to make an agreement). But what other tool does an average worker have?

Trying to save for a rainy day. Union shops have never survived for a reason.

When you start looking at double digit inflation then things get ugly (late 1970's to early 1980's). When you start having sustained deflation (Great Depression), the late 1970's don't look so bad in comparison.

If anyone is dumb enough to re-finance a 8% fixed rate mortgage at 15%, then they surely deserve what they're getting.

I agree. It was stupid and the resulting savings and loans and even many banks didn't survive. It was brutal time in our history.

[Dan J 277]

Never said it was that high of inflation. Most realize this but it bears repeating though. The inflation rate is an average of all prices. Most realize that basic stuff is the prices that will be hitting the consumers. These prices are what the consumers need to just survive. Since these are now eating into the wages then other discretionary spending lessens and that creates less demand and thus depressed employment.

Not exactly.

Its the rate of change in the consumer price index. It does not include all products.

Food and Energy are often volatile (Natural/Geopoltical factors) and are excluded from the core rate of inflation.

[Usui Takumi 1,562]

Yes 1970s inflation was far less harmful than 1930s deflation.

[luckytxn 2,265]

Not exactly.

Its the rate of change in the consumer price index. It does not include all products.

Food and Energy are often volatile (Natural/Geopoltical factors) and are excluded from the core rate of inflation.

The food and energy costs is what is maybe the most harmful of inflationary impacts to the consumer. They are the ones that seem to increase the most to us regular consumers. They are usually the staples hat we tend to have to pay for no matter how much more they cost. It is these things we will look at buying and the mortgage to be put on the back burner.

[Usui Takumi 1,562]

The food and energy costs is what is maybe the most harmful of inflationary impacts to the consumer. They are the ones that seem to increase the most to us regular consumers. They are usually the staples hat we tend to have to pay for no matter how much more they cost. It is these things we will look at buying and the mortgage to be put on the back burner.

But for instance, in the 70s - energy costs jumped for political reasons.

[luckytxn 2,265]

But for instance, in the 70s - energy costs jumped for political reasons.

I agree. OPEC was just one cog in that wheel.

[Captain Oates 911]

Hard to believe that some actually think that inflation is good. I also live during Carters time and it was miserable. That is why they started a misery index and that led to thankfully a one term presidency. People are idiots to think inflation is good.

I live rich and with a great house/car etc and more guns than I can shoot because inflation worked for me

It gave me great raises and wiped out my mortgage 3 times

Naturally the renting peasants who didnt know how to play the game, suffered like they always do

makes me feel sad for the rest

Carter was one time because of the helicopters all panicking and crashing into each other in Iran

Edited August 30, 2011 by Alan the Red

[Dan J 277]

The food and energy costs is what is maybe the most harmful of inflationary impacts to the consumer. They are the ones that seem to increase the most to us regular consumers. They are usually the staples hat we tend to have to pay for no matter how much more they cost. It is these things we will look at buying and the mortgage to be put on the back burner.

There are things a person can do to optimize energy costs such as living in a smaller house, living in a city, living closer to work, and conserving energy. But often times choose not to do so and are affected much more by fluctuations in energy costs.