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The Definitive Inflation vs Deflation Debate and What to do About It Thread

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  • Sun, Mar 11, 2012 - 09:15pm

    #191
    Davos

    Davos

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    The Deflation Argument—there is none!

 The Deflation Argument—there is none!

  • Mon, Mar 12, 2012 - 02:11am

    #192

    JAG

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    Posts: 241

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    Inflation is History

Davos wrote:

 The Deflation Argument—there is none!

All right buddy, where is the inflation that you have been warning about for 4 years…there is none! 

I’ve kept track of all my regular expenses for the last four years and the numbers don’t lie…there is no price inflation in the things that matter.

  • My dollar buys more groceries than it did in 2008.
  • My dollar buys more electricity than it did in 2008.
  • My dollar buys more gasoline than it did in 2008.
  • My dollar buys more natural gas than it did in 2008.
  • My dollar buys more home than it did in 2008.

Food, energy, & shelter are less expensive now than they were 4 years ago. Can you say that about any other 4 year period in your adult life?

I didn’t think so.

So again, where is that inflation? It’s history.

Best…Jeff

P.S. It’s funny to me that on a site whose motto is “The next twenty years will not be like the last twenty years,” everyone is still projecting the past into the future.

 

  • Mon, Mar 12, 2012 - 02:37am

    #193
    Davos

    Davos

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    JAG wrote:Davos

JAG wrote:
Davos wrote:

 The Deflation Argument—there is none!

All right buddy, where is the inflation that you have been warning about for 4 years…there is none! 

I’ve kept track of all my regular expenses for the last four years and the numbers don’t lie…there is no price inflation in the things that matter.

  • My dollar buys more groceries than it did in 2008.
  • My dollar buys more electricity than it did in 2008.
  • My dollar buys more gasoline than it did in 2008.
  • My dollar buys more natural gas than it did in 2008.
  • My dollar buys more home than it did in 2008.

Food, energy, & shelter are less expensive now than they were 4 years ago. Can you say that about any other 4 year period in your adult life?

I didn’t think so.

So again, where is that inflation? It’s history.

Best…Jeff

P.S. It’s funny to me that on a site whose motto is “The next twenty years will not be like the last twenty years,” everyone is still projecting the past into the future.

 

2008—WT?

From the peak of the commodity spike in 2008?  Why not select 2009?  If your dollar buys more today than in 2009 I’m moving next door to you and shopping where you do 🙂

  • Silver is up 155% since March 9, 2009
  • Overall food prices are up 35% since March 9, 2009
  • Beef prices are up 72% since March 9, 2009
  • Gasoline prices are up 132% since March 9, 2009
  • Corn prices are up 70% since March 9, 2009

Gas 2008 forward to today…

Homes?

  

Use Warren Buffett’s own words…The dollar has lost 86% of its value since 1966.  Anything that you use to purchase goods and services with that leaked 86% of its fuel is “inflationairy.”

But hey, don’t believe me/your friend here.  The alternative is to believe Bernanke…he says inflation is 2.2%.  Has he been right on anything?  Ever?

 

  • Mon, Mar 12, 2012 - 03:03am

    #194
    capesurvivor

    capesurvivor

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    the 5th dimension

Must be where you live, Jeff, LOL. In my dimension, tuna cans shrunk from 6 oz to 5 oz with no price decrease. Peanut butter went from 18 oz to 16.3 oz  with an big increase. Bread is WTF up.

My wine price has gone down (hmm, but my intake is up…) because I buy “Lost Vineyards” reds for 3 for $12., for the uh, antioxidant value.

I don’t want to rant about the prices of champagne and caviar. 

CS

  • Mon, Mar 12, 2012 - 04:59pm

    #195

    JAG

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    Posts: 241

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    Davos wrote:From the peak

Davos wrote:

From the peak of the commodity spike in 2008?  Why not select 2009? 

I chose 2008 because it was when I began keeping records. And the last time I remember so many people hysterical over inflation was early 2008, so it seems like a legit comparison to me.

But yes, everything is up relative to 2009 prices, but my business income has also tripled since 2009 too.

I can appreciate that my cost of living is cheaper than other places, but there is a reason for that….it sucks living here, at least during the summer.

Davos wrote:

 

  • Silver is up 155% since March 9, 2009
  • Overall food prices are up 35% since March 9, 2009
  • Beef prices are up 72% since March 9, 2009
  • Gasoline prices are up 132% since March 9, 2009
  • Corn prices are up 70% since March 9, 2009

I’m not sure that you should believe everything (or anything) that you read in the blogosphere, which is why I keep my own price records. Here is how my records standup to your figures above:

  • Silver – I don’t consider silver a daily necessity, so I have no price record for it.
  • Overall food prices- Since April ’09 my grocery bill is up 4.33%
  • Beef- a pound of ground beef (85/15) costs me 7.63% more than it did 3 years ago
  • Gasoline in April of ’09 ( I don’t have a record for March ’09) was $1.98/gal. This morning I paid $3.55/gal, a 79.3% increase in price.
  • I don’t keep track of corn because I don’t buy it in a standard measure. But since corn is in just about every food product these days, and my total grocery bill has only risen 4.33% in nearly 3 years, the producers must be eating much of the cost increase.

My suggestion is that everyone keep track of their daily expenses (iPhone apps work great for that), so that your perspective is not determined by blogosphere groupthink.

Best….Jeff

 

 

  • Mon, Mar 12, 2012 - 05:51pm

    #196
    joemanc

    joemanc

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    JAG wrote:Davos

JAG wrote:
Davos wrote:

 The Deflation Argument—there is none!

All right buddy, where is the inflation that you have been warning about for 4 years…there is none! 

I’ve kept track of all my regular expenses for the last four years and the numbers don’t lie…there is no price inflation in the things that matter.

  • My dollar buys more groceries than it did in 2008.
  • My dollar buys more electricity than it did in 2008.
  • My dollar buys more gasoline than it did in 2008.
  • My dollar buys more natural gas than it did in 2008.
  • My dollar buys more home than it did in 2008.

Food, energy, & shelter are less expensive now than they were 4 years ago. Can you say that about any other 4 year period in your adult life?

I didn’t think so.

So again, where is that inflation? It’s history.

Best…Jeff

P.S. It’s funny to me that on a site whose motto is “The next twenty years will not be like the last twenty years,” everyone is still projecting the past into the future.

Hi Jeff – I’m not following your argument. You say your dollars buy more gasoline now than in 2008. How is that possible? I know gasoline went from over $4/gallon to under $2/gallon during the collapse, and we’re now very close to, and in some cases, over $4/gallon again.

As for food prices, are you factoring in smaller products in your prices?

Are you keeping track of local and state taxes and fees?

I do like your idea of keeping track of product prices. I’ll start doing that.

  • Mon, Mar 12, 2012 - 06:14pm

    #197
    Davos

    Davos

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    Since 1999

Actually, I have records going that far back.  A year or two ago I did a comparison from 2003 forward.  Everything doubled, some stuff  went up 3+++ times.

We have tons of small businesses—all but a handfull are feeling pain.  I talk with owners weekly.

Common sense dictates that taking 86% of the purchasing value out of your dollar is the same as stealing 86 cents and leaving you with 14 cents.  That said, everything has to cost more.  Glad you are charging more and getting it!!!  That is good news!!!

  • Mon, Mar 12, 2012 - 06:44pm

    #198
    Doug

    Doug

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    cherry picking

In the volatile financial and energy times in which we live, you can show just about anything you want if you cherry pick your dates.

Doug

  • Tue, Mar 13, 2012 - 01:49am

    #199
    ao

    ao

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    is it all in my imagination?

Jeff,

Rustling cattle and siphoning gas from your neighbor’s car doesn’t count!  But seriously, I’d like to know where you buy your food that it has only gone up that much.  On the other hand, is it that you are growing that much more of your own food?   

I looked at business expenses a while ago and EVERY single one went up year over year (except for rent and labor, both of which I control).  Paperclips, stickum notes, whiteout, pens, pencils, paper, envelopes, stationary, business cards, postage, billing materials, printer cartridges, copier cartridges, fax cartridges, cleaning supplies, carpet cleaning, office machine repairs, health insurance, liability insurance, umbrella policy, fluorescent bulbs, phone, yellow pages ad, city personal property tax, accounting fees, legal fees, garbage removal, maintenance costs, etc., etc. ALL went up.

If this isn’t inflation, then maybe I’m just having a bad dream.  Wake me!

Like Davos, I know a lot of small business people and virtually all of them are having a harder time of it.  Some have gone out of business, some are just barely eking out a living, some are getting by but not like 10 years ago.  Offhand, except for those starting a successful new business, I can’t think of an established business that I know of in our area that is doing noticeably better than it did 10 years ago.  Plus, I know many salaried folks who are getting hit with salary, benefit, and pension cuts. 

Congratulations on the growth of your business though.  That’s no small accomplishment in these times.  I’m assuming you’re selling something like Ben Bernanke dart boards and Timothy Geithner toilet paper? 

 

 

  • Tue, Mar 13, 2012 - 02:35pm

    #200

    JAG

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    Posts: 241

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    joemanc wrote:Hi Jeff – I’m

joemanc wrote:

Hi Jeff – I’m not following your argument. You say your dollars buy more gasoline now than in 2008. How is that possible? I know gasoline went from over $4/gallon to under $2/gallon during the collapse, and we’re now very close to, and in some cases, over $4/gallon again.

As for food prices, are you factoring in smaller products in your prices?

Are you keeping track of local and state taxes and fees?

Hi Joe,

In the summer of 2008 I was payed $3.98/gal in June, $4/gal in July, and $3.71/gal in August. It was these rising prices, and all the “peak oil is here” talk in the blogosphere that made me start keeping track of the prices in the first place.

Yesterday, I paid $3.55/gal, which is close to 2008 prices but still below them. Gas is cheaper on the Gulf Coast because all the refineries are here, but I would happily pay more for gas if I didn’t have to live with refineries in the area.

Regarding smaller products, I did notice in late 2009 that the square footage of the toilet paper bundle that I buy was smaller, but the price was lower too. I really didn’t start keeping track of product sizes until I began building my deep pantry inventory in mid 2009. Perhaps the products are smaller than they were 2008, but I still buy and use the same amount of products each month, so it really hasn’t been a concern for me.

  • Also electricity has gotten cheeper for me each year over the last 4 years. In 2008, I paid $0.167/kwh for electricity, today I pay $0.103/kwh, a 38.3% drop in price.
  • The same goes for natural gas. I paid $622.71 total for natural gas in ’08, $416.12 total in ’09, $387.02 total in ’10, and $313.24 total in ’11. That is a 49.7% drop in 4 years.
  • My property taxes were $5710 in 2008, $5138 in ’09, $4570 in ’10, $4704 in ’11, for a 17.6% drop over 4 years.
  • Income taxes have gone up, but I had more income.
  • Car registration and inspection fees have gone up, but we are only talking about $10.
  • Taxes and fees on my phone service have risen, as my bill has gone up about $20 each year despite having the same voice & data plan. 

Best….Jeff

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