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All posts under ‘Inflation’

Beware the Money Illusion Coming to Destroy Your Wealth
Economy | Inflation | November 14, 2014

The money illusion is a tendency of individuals to confuse real and nominal prices. The impact of money illusion is not limited to wages and prices. Central bankers use money illusion to transfer wealth from you — a saver and investor — to debtors. They do this when the economy isn’t growing because there’s too much debt.

Governments Need Inflation, Economies Don't
Economy | Inflation | October 16, 2014

The only thing that inflation can do is to help governments spend & remain viable. It’s a drug they can’t do without. Economies do just fine with low inflation. The idea that governments can hold inflation to just 2% per annum is preposterous. Once it breaches that level, governments will be powerless to contain it. Endgame will be hyperinflation.

Inflation's Not the Only Way Easy Money Destroys Wealth
Economy | Inflation | October 7, 2014

One of the major negative factors that undermine the real wealth generation is loose monetary policy of the central bank, which boosts demand without the prior production of wealth. The longer the Fed’s loose policy stays in force the harder it is for wealth generators to generate real wealth & prevent the pool of real wealth from shrinking.

Doubling Down on Inflation
Inflation | September 11, 2014

The benefits of inflation are supposed to be compounded by rising stock & real estate prices, creating a wealth effect for the owners of those assets which subsequently trickles down to the rest of the economy. In other words, seed the economy with money & inflation & watch it grow. But why has growth yet been a no show?

A Win-Win Scenario for Gold Investors
Gold Trading | Inflation | September 10, 2014

It is unclear if the world will tip into inflation or deflation, but one or the other is almost certain. The good news for gold investors is that gold goes up in either case as shown in the 1930s period of extreme deflation and extreme inflation in 1970s. Investors can meanwhile use setbacks to acquire gold at more attractive prices.

Ten Reasons to Condemn Inflation
Inflation | September 9, 2014

An un-backed expansion of the money supply causes the prices of goods and services to rise – Inflation. It allows the state to go into debt more easily and at lower interest rates than would be the case without monetary expansion. Inflation reduces the purchasing power while the price of raw materials tends to rise.

Sum of Unemployment and Inflation: The New Misery Index
Inflation | Unemployment | August 25, 2014

The Status Quo is desperate to mask the declining fortunes of those who earn income from work and so figured out how to game unemployment and inflation to the point that these metrics are meaningless. The Misery Index 2.0 strips away the phony facade of bogus unemployment and inflation numbers.

Six Myths About Money and Inflation
Inflation | August 22, 2014

Its a myth that increasing aggregate demand through increasing the money supply will lead to more spending, higher employment, increased production & a higher overall standard of living. Here are 6 of the most prevalent economic myths about money & inflation that appear time and again in the mainstream media.

The Safest Investments in a Dangerous World Market
Gold Trading | Inflation | August 11, 2014

You need both the wood & the spark to have the fire of inflation. US Fed & other central banks have printed trillions of dollars of money in the past four years. So far, inflation has been relatively tame. The printed money is only the wood; a spark is still required. Events in the Middle East, Ukraine and China today may provide the spark.

Inflation Watch: The Incredible Shrinking Coke Can
Inflation | Zerohedge | August 7, 2014

U.S. soft drink companies are increasingly shifting to “mini-cans” in an apparent strategy to help the poor obese people of the world manage caloric intake better. Of course, the reality is – consumers are drinking the same amount (more small cans) at a higher price… Nope, no inflation here…

If This Continues, You May Need Armed Guards On Food Trucks
Inflation | Michael Snyder | July 17, 2014

There are now 49 million Americans dealing with food insecurity & this will only get worse as food prices go even higher. It is now not too hard to imagine desperate people holding up food trucks & robbing grocery stores in order to feed themselves and their families. We may see soon armed guards on food trucks, if this continues.

Which way is Inflation Blowing? Watch Commodities
Commodity Trading | Inflation | July 17, 2014

Rapid growth of the money supply usually fuels higher rates of inflation. It’s the narrative about low inflation & weak Gold prices that enables the endless printing of money by central banks. Bubbles in the European and US bond & stock markets can be sustained in the stratosphere, only as long as inflation is “SAID” to be running near-zero.

Inflation, Investment and Savings - Where do we stand now ?
Economy | Inflation | July 16, 2014

There’s a clear relationship between periods of rising prices (inflation) for essential items & negative real rates, & this undermines the dollar value. Investors then seek alternatives such as gold, oil & agricultural land. Actual income of the low income group varies more when measured against the price of necessities rather than the broad CPI.

Money Creation: The Road to Hyperinflation
Inflation | July 8, 2014

With banks willing to lend money and customers increasingly willing to borrow, bank credit can be expected to gradually increase in a self sustaining, inflationary spiral. With asset prices being gradually inflated, more investors are inclined to borrow at low interest rates to share the bonanza – An outcome, the central banks look for.

Fast Food Providers Beat Inflation - Add Wood Pulp To Burgers
Inflation | Social Pulse | July 4, 2014

Entrance of wood pulp – a non-absorbable fiber into fast food ingredients has been stealthy, yet found in buns, cheeses, sauces, cakes, shakes, fries, onion rings, smoothies – basically everything. Why are companies inserting it into food items? Cost effectiveness of this filler, to mask inflation & earn more profits most likely.

Gold Prices Boom Coming Due To Worldwide Inflation
Gold Trading | Inflation | July 3, 2014

Deflation is a central banker’s worst nightmare. Bankers desperately need inflation to avoid deflation. The banks can only inflate their way out of their crushing debt loads. And higher inflation means higher interest rates, both of which are very positive for the gold markets. People buy gold as a safe haven against inflation.

The Fed Misrepresenting Inflation to Justify Inept Policy
EconMatters | Inflation | June 26, 2014

The central banks need to downplay inflation, under-report it, and find metrics that support their case of low levels of inflation in the economy. They are talking their proverbial book, justifying their policies of the last five years, and even their existence as a necessary function in the economic wheel.

Janet Yellen Is Wrong About Inflation
Inflation | Zerohedge | June 26, 2014

If consumer prices are rising faster than the authorities say, it means two important things: First, real GDP is not growing. Real GDP growth is adjusted for inflation. More inflation, less real growth. Second, the real cost of borrowing is much lower than we think. If inflation is higher, the real interest rate is lower.

The Fed Just Lost Any Shred of Credibility on Inflation
EconMatters | Inflation | June 20, 2014

Look at the inflation data & explain why this is not an upward trend for 2014 & an unsettling trend given GDP was actually negative for Q1. What happens to inflation when GDP prints a 4 handle later this year? What happens to inflation when the strongest part of the year from a consumption & GDP standpoint comes gushing into the CPI Reports?

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