tag:blogger.com,1999:blog-1592992209402300549.post6066105063288256317..comments2024-03-28T08:06:43.198-04:00Comments on The Silicon Graybeard: Simple Reason Why The Federal Reserve Wants InflationSiGraybeardhttp://www.blogger.com/profile/00280583031339062059noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-1592992209402300549.post-83815781005403277752014-07-11T13:10:33.862-04:002014-07-11T13:10:33.862-04:00If there was 10%/year of currency inflation from 2...If there was 10%/year of currency inflation from 2000-2014, then I would expect the price of gold, silver, copper, and steel to go up proportionally: 1.10^14 = 3.797. The financial powers that be might be able to lie about quantities of gold and silver in storage but not about copper and steel.<br /><br />Therefore I propose that much of that price increase for cars and ammo components is due to new regulatory compliance burdens, not currency inflation.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1592992209402300549.post-39539807177604744802014-07-06T10:41:03.402-04:002014-07-06T10:41:03.402-04:00Absolutely right, gb. If you look at the Shadowst...Absolutely right, gb. If you look at the Shadowstats link of inflation, it's not a constant 10%, but has never been lower than 5%, even including the crash of '08. Averaged out by eye, it looks like it ought to come out close to 10%, though. <br /><br />The loss of half since 2000 came from somewhere else and I didn't check it. <br /><br /> SiGraybeardhttps://www.blogger.com/profile/00280583031339062059noreply@blogger.comtag:blogger.com,1999:blog-1592992209402300549.post-52954486745405284762014-07-06T03:57:09.338-04:002014-07-06T03:57:09.338-04:00If inflation is 10% per annum, then by the rule o...If inflation is 10% per annum, then by the rule of 72, we have lost half our purchasing power since 2007, approximately, not since just 2000. That seems more real. If 10% per annum is true since 2000, we have lost ~75% . (1/2 x 1/2 = 1/4; hence, 75%, again by rule of 72, applied ~ twice!). That seems real, too. Priced in gasoline, bullets, powder, primers, rifles, new or used vehicles, or groceries, 75% seems true, in my world. YMMV. In 2002, I bought a used car for the newest driver in the house for $12k. It was 3 years old. A similar 3 year old car today with similar mileage is about $21k. 75% of 12k is 8k. 12k + 8 k is $21k. The math seems real...<br /><br />New Ruger 10/22s were around $149 then, too. They go for around $279, now. Seems real, there, too.<br /><br />73,<br />III<br />gb<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1592992209402300549.post-86268182400870384062014-07-05T21:10:26.777-04:002014-07-05T21:10:26.777-04:00The Fed has said they're looking for 2% inflat...The Fed has said they're looking for 2% inflation many times, at least since the '90s. See <a href="http://www.federalreserve.gov/faqs/economy_14400.htm" rel="nofollow">here</a> for example. Of course, they rarely keep it that low.<br /><br />They also use crooked data to calculate that inflation making it far worse. For example, they don't include the cost of energy or food and they use "hedonic" adjustments. For example, let's say you buy a new Dell this year. In terms of dollars, you'll pay about the same number of dollars you did last year, but it will be more powerful because processors get better every generation. Therefore, the Fed counts it as cheaper than last year.<br /><br />John Williams at <a href="http://www.shadowstats.com/alternate_data/inflation-charts" rel="nofollow">Shadowstats</a>, who keeps the data on cost of living the historical way, shows inflation closer to 10%. The dollar has lost half its purchasing power since 2000.SiGraybeardhttps://www.blogger.com/profile/00280583031339062059noreply@blogger.comtag:blogger.com,1999:blog-1592992209402300549.post-75912795557897115092014-07-05T18:27:43.682-04:002014-07-05T18:27:43.682-04:00I don't think the Federal Reserve wants inflat...I don't think the Federal Reserve wants inflation. They are playing a game they cannot win called stalling for time on borrowed money. Inflation will leave them with two choices: 1 fight inflation with higher interest rates which will dramatically increase the debt interest payment to a point insuring our bankruptcy, OR 2. allow inflation to run it's course which has never worked out well in all of history. Either way inflation will cook the golden goose.Anonymousnoreply@blogger.com