So, for Obama is *is* about control after all...

[ThaBigP]

This from the WSJ...the 'bama administration is refusing to allow banks to return TARP money. They've even threatened "consequences" if the banks persist in trying to return the money.

http://online.wsj.com/article/SB123879833094588163.html

[dback]

<waves hand as to use the force>

Big Brother says you will keep the money, or else.

[adamc91115]

It just keeps on comin'...

Can't believe anyone still supports this piece of trash.

[Angus]

April 4, 2009
Obama Wants to Control the Banks
There's a reason he refuses to accept repayment of TARP money.

by Stuart Varney

I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn't much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street's black hole. So why no cheering as the cash comes back?

My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell 'em what to do. Control. Direct. Command.

It is not for nothing that rage has been turned on those wicked financiers. The banks are at the core of the administration's thrust: By managing the money, government can steer the whole economy even more firmly down the left fork in the road.

If the banks are forced to keep TARP cash -- which was often forced on them in the first place -- the Obama team can work its will on the financial system to unprecedented degree. That's what's happening right now.

Here's a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.

Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can't a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can't special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit -- until now.

Which brings me to the Pay for Performance Act, just passed by the House. This is an outstanding example of class warfare. I'm an Englishman. We invented class warfare, and I know it when I see it. This legislation allows the administration to dictate pay for anyone working in any company that takes a dime of TARP money. This is a whip with which to thrash the unpopular bankers, a tool to advance the Obama administration's goal of controlling the financial system.

After 35 years in America, I never thought I would see this. I still can't quite believe we will sit by as this crisis is used to hand control of our economy over to government. But here we are, on the brink. Clearly, I have been naive.

http://online.wsj.com/article/SB123879833094588163.html

:eek:

[theogt]

I doubt the veracity of this story.

[theogt]

As far as I can tell, this was the original story by Andrew Napolitano.

http://foxforum.blogs.foxnews.com/2009/04/02/napolitano_fdic/

It says nothing of the Obama administration refusing the repayment of TARP funds.

Here's the guy on television a few days ago talking about the supposed bank and he mentions nothing about Obama refusing TARP funds. He only talks about the Bush administration "extorting" the bank.

http://www.youtube.com/watch?v=sR12TFI2nJI

Is this just another case of ThaBigP with an incendiary headline without the substance to back it up?

[iceberg]

As far as I can tell, this was the original story by Andrew Napolitano.

http://foxforum.blogs.foxnews.com/2009/04/02/napolitano_fdic/

It says nothing of the Obama administration refusing the repayment of TARP funds.

Here's the guy on television a few days ago talking about the supposed bank and he mentions nothing about Obama refusing TARP funds. He only talks about the Bush administration "extorting" the bank.

http://www.youtube.com/watch?v=sR12TFI2nJI

Is this just another case of ThaBigP with an incendiary headline without the substance to back it up?

as far as people spouting off and not backing it up please let me know -

how much is a happy meal to signal hyper inflation?
how much is a gallon of milk?
hookers? - avg price will do.
tires?
a 16oz soft drink?

you never let me know what we could agree upon yet you want solid answers yourself.

all i know is thank GOD this is a soft recession or these days would SUCK.

[burmafrd]

gee ogt now saying he does not trust the WSJ. whats left?

[Jordan55]

gee ogt now saying he does not trust the WSJ. whats left?

The New York Times, a fine fair and balanced publication or KOS or the Huffington Post, where nothing but the truth prevails:eek:

[MetalHead]

I doubt the veracity of this story.
It's also on Drudge.

[theogt]

as far as people spouting off and not backing it up please let me know -

how much is a happy meal to signal hyper inflation?
how much is a gallon of milk?
hookers? - avg price will do.
tires?
a 16oz soft drink?

you never let me know what we could agree upon yet you want solid answers yourself.

all i know is thank GOD this is a soft recession or these days would SUCK.Do you really need me to prove to you that inflation isn't happening right now? If so, you're really more clueless than I thought.

It's also on Drudge.Drudge is linking to the WSJ opinion piece. The WSJ opinion piece is referencing a story by another journalist. I can't even find where the original journalist is reporting this.

gee ogt now saying he does not trust the WSJ. whats left?It's an opinion piece on WSJ. This isn't some investigative news article by the Journal.

[ethiostar]

Do you really need me to prove to you that inflation isn't happening right now? If so, you're really more clueless than I thought.


theo, i really enjoy reading most of your posts. You seem like a fairly intelligent person who is better informed on various issues than most people out there. I learn quite a bit from reading your posts.

I have to say though, sometimes your arrogance is unbearable. Just my two cents and i know you don't really care about what i think and you'll probably respond to this, if you respond at all, with some smart-*** belittling remark.

[theogt]

theo, i really enjoy reading most of your posts. You seem like a fairly intelligent person who is better informed on various issues than most people out there. I learn quite a bit from reading your posts.

I have to say though, sometimes your arrogance is unbearable. Just my two cents and i know you don't really care about what i think and you'll probably respond to this, if you respond at all, with some smart-*** belittling remark.You're right, I need to work on that. It's just annoying when this guy follows me around saying the same thing over and over and over, even though I've tried to help him out and explain things to him. I used to like him as a poster, which is why I've refused to put him on ignore.

[ethiostar]

You're right, I need to work on that. It's just annoying when this guy follows me around saying the same thing over and over and over, even though I've tried to help him out and explain things to him. I used to like him as a poster, which is why I've refused to put him on ignore.

Fair enough, i certainly don't know your history with ice.

Please keep posting the good info though. :)

I really enjoy reading well reasoned dialogues among well informed posters regardless of their political leanings, like the other thread with you and ABQ.

[JBond]

Obama Maintains Control Over Banks By Refusing To Accept Repayment Of TARP Money... (http://online.wsj.com/article/SB123879833094588163.html)

By STUART VARNEY
I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn't much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street's black hole. So why no cheering as the cash comes back?

My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell 'em what to do. Control. Direct. Command.

It is not for nothing that rage has been turned on those wicked financiers. The banks are at the core of the administration's thrust: By managing the money, government can steer the whole economy even more firmly down the left fork in the road.

If the banks are forced to keep TARP cash -- which was often forced on them in the first place -- the Obama team can work its will on the financial system to unprecedented degree. That's what's happening right now.

Here's a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.

Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can't a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can't special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit -- until now.

Which brings me to the Pay for Performance Act, just passed by the House. This is an outstanding example of class warfare. I'm an Englishman. We invented class warfare, and I know it when I see it. This legislation allows the administration to dictate pay for anyone working in any company that takes a dime of TARP money. This is a whip with which to thrash the unpopular bankers, a tool to advance the Obama administration's goal of controlling the financial system.

After 35 years in America, I never thought I would see this. I still can't quite believe we will sit by as this crisis is used to hand control of our economy over to government. But here we are, on the brink. Clearly, I have been naive.

Mr. Varney is a host on the Fox Business Channel.

[iceberg]

Do you really need me to prove to you that inflation isn't happening right now? If so, you're really more clueless than I thought.



while you're busy calling me "clueless" can you answer the question about HYPER inflation?

the ongoing question you laugh at but won't say what prices we'll hit that would say we're there?

yea, i'm clueless but you won't answer a simple question.

[burmafrd]

The Chairman of that baNK should call the media then walk into the Treasury Building with the check in his hand. Would the OBamamites be stupid enough to say no?

[Rackat]

http://i2.photobucket.com/albums/y37/Rackat/droid.jpg<waves hand as to use the force>

Big Brother says you will keep the money, or else.

[sbark]

Why would the Obama admin want to.........If Wagoner can be fired and hybrid cars can be forced on us, why can't a bank with a vault full of TARP money be told where to lend?

And since politics drives this administration, why can't special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of money-- until now.

[ThaBigP]

As far as I can tell, this was the original story by Andrew Napolitano.

http://foxforum.blogs.foxnews.com/2009/04/02/napolitano_fdic/

It says nothing of the Obama administration refusing the repayment of TARP funds.

Here's the guy on television a few days ago talking about the supposed bank and he mentions nothing about Obama refusing TARP funds. He only talks about the Bush administration "extorting" the bank.

http://www.youtube.com/watch?v=sR12TFI2nJI

Is this just another case of ThaBigP with an incendiary headline without the substance to back it up?

Well, then, I have a hell of an idea for you...aside from this, I'll not respond to you any more until you actually manage to be correct for once. Thus far, I've been gleening from the news of the day various trends. I offer links and articles then editorialize on my "dot connecting" on what trends I see emerging. So far, I'm batting almost 1000. You? You deny, dismiss, poo-poo....and are proven in short order to be comically wrong. Then you offer excuse after excuse why you really weren't wrong...just for some darned confounding reason the trends I mention rear their ugly head and erect a blockade to your being right...once again.

I'm done debating with you - you're either deliberately deceitful or have a sub-90 IQ, neither of which is a very enviable position to be in. Case in point...you keep chanting the mantra "we're not in inflation right now", as if that refutes the argument we're headed that way in a year or two (I even go so far as to suggest hyperinflation). What *I* have been saying is that we are headed that way what with all the manufactured money and our unfunded liabilities about to come due. I've posted charts from the Fed showing the inflation of the money supply. You? Ignore, dismiss, then deny such evidence was ever posted. You WILL NOT engage in honest debate. You'd much rather spend your time tinkering with strawmen of your own creation, tilt at those, and proclaim VICTORY! in the debate. Then throw some arrogant-arsed snide comment about your debate opponents. Better you should (in your own mind) tear down the credibility of your debate opponents than actually engage in the debate. Good day, and happy hunting for the facts! :)

[Vintage]

We're in inflation right now? Huh.

Is this everywhere? Because prices seem to be on par with what I was paying a year or two ago.

[WoodysGirl]

We're in inflation right now? Huh.

Is this everywhere? Because prices seem to be on par with what I was paying a year or two ago.
Well, the cost of bread is higher..

[Vintage]

Well, the cost of bread is higher..

Really?

The brand I buy is like 2.50 a loaf. Its been that way since I started using that, a year or two ago. I suppose it might have gone up a nickel or dime since I've been using it. But not enough that I actually noticed.

And my Simply Orange and Simply Apple is the same price, too. Or at least damn close. 3.50/bottle.

[WoodysGirl]

Really?

The brand I buy is like 2.50 a loaf. Its been that way since I started using that, a year or two ago. I suppose it might have gone up a nickel or dime since I've been using it. But not enough that I actually noticed.

And my Simply Orange and Simply Apple is the same price, too. Or at least damn close. 3.50/bottle.
The brand I buy used to be 1.49., then it stabilized for 1.79.. Now it's up to2.79. The cost has gone up significantly in the past couple of years.

Cost of food has gone up. Could be natural forces at play, but it doesn't help my pocketbook.

[MetalHead]

Why would the Obama admin want to.........If Wagoner can be fired and hybrid cars can be forced on us, why can't a bank with a vault full of TARP money be told where to lend?

And since politics drives this administration, why can't special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of money-- until now.

Wait until Barry relinquishes our sovereignty to the international courts.

[Vintage]

The brand I buy used to be 1.49., then it stabilized for 1.79.. Now it's up to2.79. The cost has gone up significantly in the past couple of years.

Cost of food has gone up. Could be natural forces at play, but it doesn't help my pocketbook.

Weird. Because it hasn't happened to me.


Country Hearth Wheat Split Butter Top is what I buy. I want to say it was 2.50 a year or two ago when I switched to it. And its the same now. And Simply Orange is the same price when I switched to it, also.

[WoodysGirl]

Weird. Because it hasn't happened to me.


Country Hearth Wheat Split Butter Top is what I buy. I want to say it was 2.50 a year or two ago when I switched to it. And its the same now. And Simply Orange is the same price when I switched to it, also.
Like you said, you're only tracking a one-year thing.

I'm looking at it from at least the past three years. I haven't really changed the brands that I buy.

Orange juice has always been expensive. Simply Orange is about the same cost as other brands. A gallon of Tropicana is about the same as two half gallons of Simply orange. Might save a dollar.

[Vintage]

Like you said, you're only tracking a one-year thing.

I'm looking at it from at least the past three years. I haven't really changed the brands that I buy.

Orange juice has always been expensive. Simply Orange is about the same cost as other brands. A gallon of Tropicana is about the same as two half gallons of Simply orange. Might save a dollar.

I can't go back beyond a year.... I wasn't buying my own stuff then, so I really have no idea...

Could it also be because gas sky rocketed, prices also sky rocketed? (Gas needs to be used to transport foods)

[ThaBigP]

while you're busy calling me "clueless" can you answer the question about HYPER inflation?

the ongoing question you laugh at but won't say what prices we'll hit that would say we're there?

yea, i'm clueless but you won't answer a simple question.

I'll actually try to answer this - there is no hard and fast definition of hyperinflation to distinguish it from regular-old, plain-Jane inflation. Like art, it's one of those things where "you know it when you see it." But one factor with hyperinflation is that it tends to become runaway in nature. The reason for this is simple, and requires a brief touch on the essential ingredient of inflation, hyper or not: an increase in the money supply without a proportional increase in the goods and services being traded against that currency. If you double the amount of currency in circulation and the amount of goods and services remains constant, you in effect will double the price of everything trading in that currency. The same can happen if the amount of currency in circulation stays constant, but the amount of goods and services halves.

Commodity-backed currency does have one firewall against hyperinflation, and that is that it limits the ability of the central bank or government to simply manufacture money. If money is backed, then that commodity must be aquired before the printing presses may run. So, how and why could inflation become hyperinflation, and how does that become runaway?

With a fiat currency backed by nothing more than the promise that the note is worth something, there is no restraint on inflating the money supply except for the judgement of those whose hands are on the levers of the printing presses (I stress the use of "printing presses" is done metaphorically, since much is simply done digitally nowadays). It starts in a time of economic downturn and deflation; prices fall putting pressure on manufacturers and retailers to maintain profitability. Many cannot, and contract production and lay off workers. Others close their doors entirely, since the market no longer supports the previous level of production as demand has fallen. Laid-off workers cannot afford to spend their money on anything but bare essentials, resuting in further price collapse and further layoffs as demand futher declines. This is known as a deflationary spiral, and until equilibrium is reached tends to feed itself in a sort of negative feedback loop. Here's where government intervention comes in, and how it can lead to a feedback loop going the other way...

In the face of closing doors, laid off workers, forclosures, etc, the government often finds itself in a fit of WE MUST DO SOMETHING! And what they tend to do is to increase the amount of currency in circulation to help boost demand. If more money finds its way into the pockets of the consumers, they'll be able to spend at or near the previous demand levels (so the theory goes), and that will then help stop the deflationary spiral. What happens, though, is that eventually economic activity does begin to return naturally. And when it does, the now reduced amount of goods and services (reduced due to the contraction of production) is being chased by far more money than prior. So it actually is a scale weighted on both sides in favor of inflation...an increase in the money supply AND a decrease in goods and services. A double-whammy. And prices skyrocket. When they do, the government often responds by printing more money. Because the people demand it. Most people aren't intimately familiar with the mechanisms of an economy, but they are very familiar with $10/gallon gasoline, $6/gallon milk, $25 Happy Meals...and those prices go up in as little time as it takes to read the price in hyperinflation. Literally. So they demand the government "do something" to fix this problem they created in the first place. And what most people want is an increase in the money supply to chase these skyrocketing prices. But, that's the precise WRONG thing to do, as it causes the inflation in the first place. The solution is to contract the money supply until GDP returns to levels high enough to support an incrase in the money supply. But how well does that go over? Not very. "Hand over what little money you have left in the face of runaway inflation through higher taxes and interest rates" is not a campaign slogan economically-squeezed voters are likely to find appealing. And it's doubly dangerous in a nation who is a debtor nation. When the value of the currency is in free-fall, the creditors vanish, obviously. Nobody wants to invest good money into bad money, only to be repaid in that nation's now-worthless currency. That causes a further fall in that nation's currency. In the end, you have events conspiring to perpetuate and worsen the inflation, just as events conspired to perpetuate and worsen the deflation before.

Here's an excellent article about one of the most famous cases of hyperinflation in modern history, the Weimar Republic:

http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html

[WoodysGirl]

I can't go back beyond a year.... I wasn't buying my own stuff then, so I really have no idea...

Could it also be because gas sky rocketed, prices also sky rocketed? (Gas needs to be used to transport foods)
Yeah, I know you're relatively knew to this.

I would say yes, but I think the proper term would be oil, not gas. Oil is used to make so many products, it's only natural for manufacturers to past on the cost of it.

My only issue with certain costs was how quickly the prices rose. I'm used to more gradual rises. Things basically doubling over a period of two years is not cool.

[ThaBigP]

We're in inflation right now? Huh.

Is this everywhere? Because prices seem to be on par with what I was paying a year or two ago.

I'm not sure who you're posing the question to...but Theo has taken exception to my claim that horrible inflation, perhaps even hyperinflation, is on the way...though I've made no claims that it has started yet (because...it hasn't started yet). Some volatile commodities, such as energy and food, have gone up recently. But those are what they are...volatile and given to temporary wild swings independent of economic reality from time to time.

Before rapid inflation sets in, the velocity of money in the economy has to increase. In other words, people have to begin crawling out of their bomb shelters and out from under the rocks where they've been weathering the recession, venture out, and spend money again. I think it'll happen within a year or two depending on how quickly the economy is allowed to recover.

[Vintage]

Yeah, I know you're relatively knew to this.

I would say yes, but I think the proper term would be oil, not gas. Oil is used to make so many products, it's only natural for manufacturers to past on the cost of it.

My only issue with certain costs was how quickly the prices rose. I'm used to more gradual rises. Things basically doubling over a period of two years is not cool.


Without a doubt the quick rise in prices shocked many people. But oil prices rose pretty quickly, and thus, it seems natural for things like bread and other food stuff (as well as other goods/services) to rise as a result.

[iceberg]

I'll actually try to answer this - there is no hard and fast definition of hyperinflation to distinguish it from regular-old, plain-Jane inflation. Like art, it's one of those things where "you know it when you see it." But one factor with hyperinflation is that it tends to become runaway in nature. The reason for this is simple, and requires a brief touch on the essential ingredient of inflation, hyper or not: an increase in the money supply without a proportional increase in the goods and services being traded against that currency. If you double the amount of currency in circulation and the amount of goods and services remains constant, you in effect will double the price of everything trading in that currency. The same can happen if the amount of currency in circulation stays constant, but the amount of goods and services halves.

Commodity-backed currency does have one firewall against hyperinflation, and that is that it limits the ability of the central bank or government to simply manufacture money. If money is backed, then that commodity must be aquired before the printing presses may run. So, how and why could inflation become hyperinflation, and how does that become runaway?

With a fiat currency backed by nothing more than the promise that the note is worth something, there is no restraint on inflating the money supply except for the judgement of those whose hands are on the levers of the printing presses (I stress the use of "printing presses" is done metaphorically, since much is simply done digitally nowadays). It starts in a time of economic downturn and deflation; prices fall putting pressure on manufacturers and retailers to maintain profitability. Many cannot, and contract production and lay off workers. Others close their doors entirely, since the market no longer supports the previous level of production as demand has fallen. Laid-off workers cannot afford to spend their money on anything but bare essentials, resuting in further price collapse and further layoffs as demand futher declines. This is known as a deflationary spiral, and until equilibrium is reached tends to feed itself in a sort of negative feedback loop. Here's where government intervention comes in, and how it can lead to a feedback loop going the other way...

In the face of closing doors, laid off workers, forclosures, etc, the government often finds itself in a fit of WE MUST DO SOMETHING! And what they tend to do is to increase the amount of currency in circulation to help boost demand. If more money finds its way into the pockets of the consumers, they'll be able to spend at or near the previous demand levels (so the theory goes), and that will then help stop the deflationary spiral. What happens, though, is that eventually economic activity does begin to return naturally. And when it does, the now reduced amount of goods and services (reduced due to the contraction of production) is being chased by far more money than prior. So it actually is a scale weighted on both sides in favor of inflation...an increase in the money supply AND a decrease in goods and services. A double-whammy. And prices skyrocket. When they do, the government often responds by printing more money. Because the people demand it. Most people aren't intimately familiar with the mechanisms of an economy, but they are very familiar with $10/gallon gasoline, $6/gallon milk, $25 Happy Meals...and those prices go up in as little time as it takes to read the price in hyperinflation. Literally. So they demand the government "do something" to fix this problem they created in the first place. And what most people want is an increase in the money supply to chase these skyrocketing prices. But, that's the precise WRONG thing to do, as it causes the inflation in the first place. The solution is to contract the money supply until GDP returns to levels high enough to support an incrase in the money supply. But how well does that go over? Not very. "Hand over what little money you have left in the face of runaway inflation through higher taxes and interest rates" is not a campaign slogan economically-squeezed voters are likely to find appealing. And it's doubly dangerous in a nation who is a debtor nation. When the value of the currency is in free-fall, the creditors vanish, obviously. Nobody wants to invest good money into bad money, only to be repaid in that nation's now-worthless currency. That causes a further fall in that nation's currency. In the end, you have events conspiring to perpetuate and worsen the inflation, just as events conspired to perpetuate and worsen the deflation before.

Here's an excellent article about one of the most famous cases of hyperinflation in modern history, the Weimar Republic:

http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html


well, i kinda figured it wouldn't be as easy as "a gallon milk costing $10 we're there! even so, theo has enough excuses and places to play "hide the facts" so it's like it matters. he won't pin himself down to a figure cause he can't back it up if we get there. my guess would be even if we did, he'd say it was for other reasons.

go figure.

[theogt]

while you're busy calling me "clueless" can you answer the question about HYPER inflation?

the ongoing question you laugh at but won't say what prices we'll hit that would say we're there?

yea, i'm clueless but you won't answer a simple question.Can you state your question more clearly? I'm not sure what you're even asking.

[theogt]

Like you said, you're only tracking a one-year thing.

I'm looking at it from at least the past three years. I haven't really changed the brands that I buy.

Orange juice has always been expensive. Simply Orange is about the same cost as other brands. A gallon of Tropicana is about the same as two half gallons of Simply orange. Might save a dollar.You're focusing on energy and food prices. These are very volatile prices, which is why they're typically removed when you see inflation statistics. For example, you'll hear "CPI excluding food and energy rose X%." The prices rising and falling relating to energy and food have little to do with inflation. Inflation takes the form of a much longer creep up or down like you're used to seeing.

[theogt]

I'm not sure who you're posing the question to...but Theo has taken exception to my claim that horrible inflation, perhaps even hyperinflation, is on the way...though I've made no claims that it has started yet (because...it hasn't started yet). Some volatile commodities, such as energy and food, have gone up recently. But those are what they are...volatile and given to temporary wild swings independent of economic reality from time to time.

Before rapid inflation sets in, the velocity of money in the economy has to increase. In other words, people have to begin crawling out of their bomb shelters and out from under the rocks where they've been weathering the recession, venture out, and spend money again. I think it'll happen within a year or two depending on how quickly the economy is allowed to recover.This is a very good post. I think the only place we really have a fundamental disagreement is the government's ability to reverse the increase in the money supply. You can't have inflation if you can effectively reduce the money supply.

I've always said we'll see inflation. It'll likely even be higher than "normal." But the use of terms like "hyper-inflation" are just silly.

[iceberg]

Can you state your question more clearly? I'm not sure what you're even asking.

oh like it really matters. if saying "how much will a gallon of milk need to be to signify hyperinflation" confuses you, no sense in going on.

[theogt]

oh like it really matters. if saying "how much will a gallon of milk need to be to signify hyperinflation" confuses you, no sense in going on.You want me to predict the price of a gallon of milk? Do you not realize that milk prices have little to do with inflation?

[adamc91115]

You're focusing on energy and food prices. These are very volatile prices, which is why they're typically removed when you see inflation statistics. For example, you'll hear "CPI excluding food and energy rose X%." The prices rising and falling relating to energy and food have little to do with inflation. Inflation takes the form of a much longer creep up or down like you're used to seeing.

Serious question...
Food and energy aren't included. What prices are included in inflation statistics then?

[theogt]

Serious question...
Food and energy aren't included. What prices are included in inflation statistics then?Food and energy are included in CPI. It's just that when it's reported, you usually see a number both including F&E and excluding F&E, because they can skew the numbers with their volatility.

As far as what else is included: http://www.bls.gov/cpi/cpid0902.pdf

[MetalHead]

Food and energy are included in CPI. It's just that when it's reported, you usually see a number both including F&E and excluding F&E, because they can skew the numbers with their volatility.

As far as what else is included: http://www.bls.gov/cpi/cpid0902.pdf

So,milk is not food?

[JBond]

I can't go back beyond a year.... I wasn't buying my own stuff then, so I really have no idea...

Could it also be because gas sky rocketed, prices also sky rocketed? (Gas needs to be used to transport foods)

Gas prices were a big part of it. I instituted a gas surcharge tax on deliveries made by my company. I also removed it when gas dropped back under $2.50.

Never underestimate the far reaching consequences of high energy costs. It is going to get much worse shortly. If Obama follows through on his plans to tax coal plants out of existence and continues to rely on middle eastern oil from countries that hate us, there will be problems.

Add in the cap, tax and trade carbon scam and energy costs are going to soar, effecting every aspect of American life. The exception will be the welfare/handout babies. Energy credits are on the way for the poor, just like we pay for all their food, we will be asked to pay for all their electricity and gas. It has already started here in Kansas. Obama needs to keep enough people poor and uninformed. That along with the die hard libs are all that is needed to maintain power.

[JBond]

Food and energy are included in CPI. It's just that when it's reported, you usually see a number both including F&E and excluding F&E, because they can skew the numbers with their volatility.

As far as what else is included: http://www.bls.gov/cpi/cpid0902.pdf

There is nothing skewed about including F&E in the CPI. This is a bunch of bunk and you know it. Why would you not include the two biggest areas of fluctuating costs to households? To skew the number in favor of your argument? You can fool some of the people some of the time.

[theogt]

There is nothing skewed about including F&E in the CPI. This is a bunch of bunk and you know it. Why would you not include the two biggest areas of fluctuating costs to households? To skew the number in favor of your argument? You can fool some of the people some of the time.Because you're not attempting to gauge all fluctuations in costs to households. You're only attempting to gauge the fluctuations that are due to inflation. Not all fluctuations are due to inflation. Food and energy are subject to fluctuations that are not due to inflation. Thus, it's more helpful to look at CPI excluding food and energy.

[Doomsday]

The brand I buy used to be 1.49, then it stabilized for 1.79.. Now it's up to2.79. The cost has gone up significantly in the past couple of years.

Cost of food has gone up. Could be natural forces at play, but it doesn't help my pocketbook.

Yea, supposedly that was because of gas prices and the fact it cost so much more to ship things these days. Food prices soared last year, but Ive yet to seen that drop a dime since gas prices came back to reality.

As much as I hate the place, I now am forced to shop at Walmart for my food. They are almost 1/2 the price of Safeway and other national grocers on more then a few items I buy regularly.

[JBond]

Because you're not attempting to gauge all fluctuations in costs to households. You're only attempting to gauge the fluctuations that are due to inflation. Not all fluctuations are due to inflation. Food and energy are subject to fluctuations that are not due to inflation. Thus, it's more helpful to look at CPI excluding food and energy.

Good answer. I consider the CPI including the F&E as a more relevant number to the individual but you are right as far as your explanation goes for inflation.

And we didn't even resort to name calling.

[burmafrd]

Bottom line neither really does all that good a job of measuring the real effects of inflation. Mainly because neither one has been really updated in about 20 years.

[iceberg]

Because you're not attempting to gauge all fluctuations in costs to households. You're only attempting to gauge the fluctuations that are due to inflation. Not all fluctuations are due to inflation. Food and energy are subject to fluctuations that are not due to inflation. Thus, it's more helpful to look at CPI excluding food and energy.

ok, the root of my question is - since you seem to feel hyperinflation is a "myth" that isn't likely to happen, what would need to be occuring to say for sure it "is" happening, if it does?

[theogt]

ok, the root of my question is - since you seem to feel hyperinflation is a "myth" that isn't likely to happen, what would need to be occuring to say for sure it "is" happening, if it does?Very high inflation. We're talking 20-30% and higher inflation. That's what I consider "hyper-inflation."

You're never going to see anything like that in the United States.

[BrAinPaiNt]

Very high inflation. We're talking 20-30% and higher inflation. That's what I consider "hyper-inflation."

You're never going to see anything like that in the United States.

Never say Never. (always enjoyed that line for a multitude of reasons)

[iceberg]

Very high inflation. We're talking 20-30% and higher inflation. That's what I consider "hyper-inflation."

You're never going to see anything like that in the United States.

fair enough. i may have been asking strangely cause no, i'm not an economics expert (i know that floors you by now) but i'm still trying to make sense of what i can with what i do know.

[burmafrd]

I do beleive we got pretty close to 20% inflation under carter. Never say never.

[theogt]

fair enough. i may have been asking strangely cause no, i'm not an economics expert (i know that floors you by now) but i'm still trying to make sense of what i can with what i do know.Cool. Understood. Corporate finance and economics aren't something you really learn unless you have to.

[theogt]

I do beleive we got pretty close to 20% inflation under carter. Never say never.Average during his administration was 10%. The highest in a single year is 13%. And I think the Fed has learned a thing or two since then.

We've seen 20% inflation in only one year (1913) in the past century. The average over the last 20 years has been 2-3%.

[Temo]

Average during his administration was 10%. The highest in a single year is 13%. And I think the Fed has learned a thing or two since then.


I would say that as much as we've learned, there's a lot still to be learned and in some cases inflation can be caused as a byproduct of unavoidable actions.

We've certainly done things that lead to an increased money supply in recent times, I think we can all agree on that. I suspect that your vague statement about reversing money supply will not be all that easy to achieve down the road.

While I do agree that hyperinflation is a fairly remote possibility, regular 'ole inflation in excess of what we've seen in recent times seems almost unavoidable in the future.

[Common Sense]

While I do agree that hyperinflation is a fairly remote possibility, regular 'ole inflation in excess of what we've seen in recent times seems almost unavoidable in the future.


...Like death and taxes.

[Joe Rod]

I usually come into these threads to enjoy the name calling. Who knew I would actually learn something!

[theogt]

I would say that as much as we've learned, there's a lot still to be learned and in some cases inflation can be caused as a byproduct of unavoidable actions.

We've certainly done things that lead to an increased money supply in recent times, I think we can all agree on that. I suspect that your vague statement about reversing money supply will not be all that easy to achieve down the road.

While I do agree that hyperinflation is a fairly remote possibility, regular 'ole inflation in excess of what we've seen in recent times seems almost unavoidable in the future.Right, and we should welcome it when it does appear. As I said earlier in the thread:

This is a very good post. I think the only place we really have a fundamental disagreement is the government's ability to reverse the increase in the money supply. You can't have inflation if you can effectively reduce the money supply.

I've always said we'll see inflation. It'll likely even be higher than "normal." But the use of terms like "hyper-inflation" are just silly.