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Page added on August 31, 2014
Inflation
For close to 300 years, inflation in the US remained very subdued. Small spurts occurred around major wars (Revolutionary, Civil, WW1, etc), but after each, inflation quickly trended back down to its long-term baseline. If you lived during this stretch of time, your money had roughly the same purchasing power your great-grandfather’s did.
But something changed after inflation spiked yet again during World War 2. With the permanent mobilization of the military industrial complex and the start of the decades-long Cold War, combined with a related acceleration in government deficit spending, inflation did not come back down. It remained elevated, and in fact, rose further.
That is, until the “Nixon shock” in 1971, when the dollar’s remaining ties to gold were severed. Then inflation EXPLODED. And the inflationary moon-shot has continued since, up to present day.
So, we’ve become used to a system in which our money loses purchasing power over the years. For anyone aged 50 or younger, it’s pretty much all we’ve ever known.
But it doesn’t have to be this way. Indeed, our country did fine for centuries without systemic continual chronic inflation.
So why do we accept it today?
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30 Comments on "Inflation"
Makati1 on Sun, 31st Aug 2014 8:34 pm
I see a loaf of bread at $20 before too long … if the dollar doesn’t crash soon. Inflation is running at 7+% and has been for years. That means, the cost of something doubles in 10 years.
For instance:
1965 – Chevy Impala Super Sport
Convertable with 396 engine and quadrajet carb was $2,500 off of the showroom floor (My first new car). Now, (convertibles not available) the same in a sedan is over $40,000. I made $1.50 per hour then. That is equal to ~$12 per hour now according to the ‘official’ inflation tables. BUT… that same $2,500 should only be $18,900 today instead of $40,000. THAT is what inflation does to your life…
trickydick on Sun, 31st Aug 2014 8:55 pm
Well said, Makati! Once you start looking at inflation, you get to the core of The System. The System robs from us every day with inflation. We work harder just to maintain the same living standard. It’s the little number in the Wall Street Journal call ‘Productivity Increase’. That’s us little people working harder and the business we work for keeping that profit.
Productivity has been rising for decades and the Powers That Be have kept essentially all of it. That’s the thanks we get.
The only way to beat it is to own real estate and then make your own business. Renting and working for an hourly wage is a surefire way to lose.
paulo1 on Sun, 31st Aug 2014 9:54 pm
I always look at the price to fill the car and buy a carton of cigarettes and/or a night of beer. I am 59. Back in the early 70s I could buy a carton of Export A (when I smoked) for $4.00. (40 cents per pack!!) Now, the same thing is almost $100. Sure it is taxed more but that doesn’t change its affordability. I made $7.00/hr as a 3rd year carpenter apprentice. I could drink draft all night on two dollars and we even had two dollar bills! It cost $3.65 to fill a vw bug…or 1/2 hour of take home pay. In order to have the same buying power I would have to make $100/hr. Obviously, we don’t make that.
Paulo
noobtube on Sun, 31st Aug 2014 10:03 pm
There is no way to survive this, with any semblance of an American-mentality.
Real estate will be seized.
A business will lose its paying customers.
The banks, as we know them today, will disappear. But, the DEBTS won’t!
In fact, as I see it, the United States will disappear in my lifetime.
If you can’t get out, the only hope is to find like-minded people, who you can reasonably trust, while building practical skills (scavenging, farming, trade) and knowledge.
Almost every American (unless they carry a gun for a living, and even then), is just a sitting duck, if they think worrying about their own petty interests is going to save them from what is coming.
steve on Sun, 31st Aug 2014 11:09 pm
noobytube re read what you just wrote…..if you have half a brain you will see the foolishness in your statement…blind with hate make you very dumb…1. Who will Seize real estate? In that kind of collapse there will be no one to worry about petty things like real estate….Please think before you type fool! Anyone who predicts the future with your certainty knows nothing….Now you better go now your mommy is calling you….
noobtube on Mon, 1st Sep 2014 2:08 am
The United States will disappear and be replaced with what used to exist in Europe… feudal landlords.
If you think owning property (having any real value), without armed guards to protect it, is going to save you… then I guess you deserve what’s coming.
It’s clear the United States is finished. City-states and warlords are in its future.
Why? Because Americans are low-grade, ignorant, hate-filled idiots who deserve to be dominated and exploited by a super-tiny ruling elite.
That’s what American Exceptionalism gets you.
Makati1 on Mon, 1st Sep 2014 2:56 am
steve, you are the mindless bot.
1. Realestate is being taken everyday in the Ussa under the term “repossession”. When you lose your job, and you will, and have to take z lower paying job (if you are lucky enough to find one), it will go, either by the bank or by the government for not paying the taxes and fees you owe on it. Or by outright “nationalization” as I suspect will happen eventually with all privately owned properties, land, retirement plans, etc. Serfs/slaves are not allowed to own land.
That noobtube expects the US to disappear into the chaos of the not too distant future, I agree. I have not seen/read anything to prove otherwise. I have not seen any signs. in the sheeple. of a backbone or intelligence for decades. All you have to do is open your eyes and look at the real America to see that I am correct. Democracy is dead and free market capitalism never existed. Both are myths propagated by your masters, the elite.
PrestonSturges on Mon, 1st Sep 2014 3:18 am
Inflation exploded after Nixon because Nixon had “wage price controls” and they eventually went away. And there was a record number of people getting married and entering the job market. Don’t give me bullshit about the gold standard.
herrmeier on Mon, 1st Sep 2014 6:44 am
The USA splitting into several states is not a bad thing to happen. THe same way as the breakup of the EU will be a day of celebration. Powers of the world must be balanced, no single nation should be too strong.
But more importantly I don’t see why a moron in Washington DC should tell me what is right and wrong from 2000 miles away.
JuanP on Mon, 1st Sep 2014 8:30 am
Real property has always been confiscated by the governments of the world as needed. It happens every day and the process is called eminent domain. This will increase in the future. Nobody is safe from eminent domain.
Boat on Mon, 1st Sep 2014 8:37 am
herrmeier, we already have 50 states. The US is not to strong. Any society has to have laws. Most of these are made because of a disagreement and a precedent was developed to solve future similar situations. Maybe you don’t have that where you live but it seems to be rather successful. Powers of the world don’t need to be equal. Is this one of your rules the rest of us need to follow?
The idea of American exceptionalism is silly, were just humans like you, imperfect for sure.
Boat on Mon, 1st Sep 2014 8:38 am
JuanP, is there a problem with that?
JuanP on Mon, 1st Sep 2014 8:43 am
No problem. I’m just pointing out that you guys are fighting about whether something is going to happen in the future that is already happening now. The argument is pointless.
The same goes for whether the USA will break up or not. It may happen next week or in the next millenium, but it will break up, it is only a matter of when. I guess you like arguing without purpose.
herrmeier on Mon, 1st Sep 2014 8:54 am
Boat: I’m an American (and a European, too). Unlike noob I don’t think Americans are bad or evil or stupid. And since every 3rd world cave dweller would like to move to either Europe or America, it’s clear that it can’t be that bad. *smile*
But I don’t like kings. I don’t need somebody to tell me what to do and what is good for me. And I especially don’t need for some dude 2000 miles away to do it. Problems are most efficiently solved locally. I want free states with choices. Current states of the union are greatly limited in their power. California and Maine are different. One size does not fit all.
THe USA is too big and powerful for its own good. It is my opinion that the breakup of the US and EU would be good for both the world and the people of the US and Europe.
Boat on Mon, 1st Sep 2014 9:29 am
Who is telling you what to do. You can move anywhere and work anywhere. You don’t have to pick a subdivision that tells you what color roof to have, or you can. You can pick your town. In the middle of Kansas you can get cheap homes in little tiny towns and sit in the yard and get bombed. In Houston you can’t. If you don’t like cops, move to where there are any.
In GA you can shoot a deer from the front porch.
Boat on Mon, 1st Sep 2014 9:48 am
Well Mr Juan, I myself wouldnt call a difference of opinion an argument but to each his own. Like your idea of a US break up is an opinion. Not a fact. That is my opinion.
herrmeier on Mon, 1st Sep 2014 9:58 am
Boat: If it were that simple.
The federal hand is heavy (as is Brussels for the Europeans). And in many cases the hand coerces states to implement policies by providing/denying financial help.
Federal controls or influences everything from taxes to foreign policies to immigration to FDA to environment to communication etc etc etc. The list goes on and on.
A good example for that is the Minimum Drinking Age Act of 1984. Although the drinking age is controlled by states, non compliance with the Minimum Drinking Age Act will result in federal Highway funding to be withheld.
I DONT WANT KINGS!!
JuanP on Mon, 1st Sep 2014 10:05 am
So, Boat, am I to understand that you believe the USA will last forever? Because my point was that NOTHING lasts forever, not just the USA. Do we agree now?
JuanP on Mon, 1st Sep 2014 10:10 am
Boat, I was referring to the thread above and comments like this: “Why? Because Americans are low-grade, ignorant, hate-filled idiots who deserve to be dominated and exploited by a super-tiny ruling elite.”, not any particular comment.
There was a fight going on about nothing.
Solarity on Mon, 1st Sep 2014 10:49 am
“Americans are low-grade, ignorant, hate-filled idiots.”
They certainly do not understand the ‘Precautionary Principle,’ whereby people should be cognizant of how harmful their decisions might be. Evidence of the deficient ‘American Mentality’ is the President they elected. Next time around, it will probably be another dildo (or dilda). Yes, the US is probably doomed, because the powers that be seem to like a dumbed-down populace.
paulo1 on Mon, 1st Sep 2014 11:13 am
I have never read such hate filled ignorance, even on this site. I am not an American, but they are certainly not evil. Like most folks they are doing their best with what they were given to work with, including the crap dished out by their mostly corrupted leaders. Noob, you think there are no more John Steinbecks in the USA? Give it a break.
Like someone said upthread, if it was such a shitty place why does almost every Asian seem to want to move there? Give any refugee a choice, USA or Europe, and I’ll bet most would pick USA. There is a reason for that.
Take a road trip, if you stay out of the cities the land has many beautiful and open spaces. I would rather be in Appalachia when times get tough than England, France, or any other piece of land pawed over for 10,000 years.
The ‘hate USA’ rhetoric displayed by Noob and Mak take away from any valid arguments they make.
Paulo
Davy on Mon, 1st Sep 2014 12:02 pm
Thanks, Paulo, I feel more Canadian than American myself. It is unfortunate that the ugly Americans, the poor policies, attitudes, and lifestyles are seen but the good side of America is ignored. There are many good things here in America and many of us are fighting to reclaim something that was lost. The hypocrites and blame-gamers are idiots that cannot live up to the standards they spew forth in their puk that is passed on as comments.
JuanP on Mon, 1st Sep 2014 12:08 pm
I would rather be in Appalachia now. I think that is my favorite place in the whole world. My wife and I honeymooned along the Blue Ridge Parkway and surrounding areas, and have gone back four times because we love that place. It is incredibly beautiful. Every landscape a painting.
Makati1 on Mon, 1st Sep 2014 8:09 pm
I have seen the ‘wanna move there’ from the other side. Many want to ‘live there’ because they only see the ads and movies and propaganda, not the real ussa. That was true of my friends here who all wanted to go to the US. One of them came back with me to visit and see what it is like. After that trip and a few “facts” about taxes, living expenses, Food Stamps, etc, the shine was gone and I never heard anymore talk about going there.
Of course, if you are making $10 per day where you are and you see a country where you can make $40 per day, it looks good. Few know about the taxes, laws, restrictions they also have in the US that they don’t have in the Ps. There are almost as many Filipinos working in the ME and North Africa, but that doesn’t mean they want to stay there. Almost all of them move back to the Ps to live after some years working as Expats.
First, you cannot even get into the US as a Filipino without a secure job in the Ps, own property in the Ps, and have significant financial ties to the Ps. They don’t just walk across the border. It takes a visa from the US Embassy.
If you were starving in Africa, you would go anywhere that seemed better. That does not mean that that country is “exceptional”, just a step up, maybe. “Exceptional” is only in the minds of the sheeple these days. Propaganda is efficient…
clueless on Tue, 2nd Sep 2014 12:06 am
Fee to renounce US citizenship goes up fourfold to $ 2,350 from $ 450. Changes come into effect starting Sept.6, this year.
Inflation ???!!! LOL
forbin on Tue, 2nd Sep 2014 3:51 am
4 major powers in the world , 5 if you like Brazil
where do people who emigrate wish to live ?
Seems to me only USA and Europe
Russia, China and Brazil for some reason don’t seem to cut it…..
they’re all better than an “Afro/Asian ” level of living are they not?
And the UK ? virtually no one wants to go back …. it’s still way better than the old country , or so they tell me.
forbin
forbin on Tue, 2nd Sep 2014 3:53 am
Back on subject
” But it doesn’t have to be this way. Indeed, our country did fine for centuries without systemic continual chronic inflation.
So why do we accept it today? ”
So did the British Empire , inflation was low and static for many years
Then came the World Wars……
The rest is history
Forbin
Makati1 on Tue, 2nd Sep 2014 9:44 am
forbin, Russia and China make it difficult to immigrate legally. Not so the US as they need the bodies and consumers and a distraction for the sheeple.
Where I live, along with some 350,000+ other Americans, they make it easier, with a Retirement Visa. We are part of about 2,000,000 foreigners living here. My condo tower is like a mini-UN with many countries represented.
HARM on Tue, 2nd Sep 2014 1:27 pm
Thanks, Paolo,
I am first to admit that many Americans are dumb, ignorant, lazy, xenophobic and easily manipulated by corporatist propaganda, religion, bigotry and homophobia into voting against their own interests. Which makes them pretty much like your “average” citizen almost anywhere (see the “Arab Spring” nations for several good examples). There’s a reason why they call it the “lowest common denominator”.
That aside, there are still a few independent thinkers, courageous journalists, and status quo buckers who are willing to consider other points of view –and many of them are here. However, we have always been –and probably alwaysd will be– in the minority. Unfortunately, the traits of conformity, submisiveness, religiosity and groupthink seem to have been naturally selected for by evolution.
Davy on Tue, 2nd Sep 2014 6:32 pm
well put HARM, I don’t mind American criticism when it is balanced and fair.