Inflation

[Hitch]

Inflation is the devaluation of the currency.

[CatholicSage]

I guess. What's your point?

[Hitch]

Too many folks confuse the symptoms with the disease.

[TuckEverlasting]

Too many folks confuse the symptoms with the disease.

Do you mean that most people think that inflation is 'stuff getting (relatively) more expensive' when it is actually, as you said, 'devaluation of the currency'?

If not, what do you mean? :nsm:

[Hitch]

Do you mean that most people think that inflation is 'stuff getting (relatively) more expensive' when it is actually, as you said, 'devaluation of the currency'?

If not, what do you mean? :nsm: Yup. Which can lead folks to support price controls

[TuckEverlasting]

Yup. Which can lead folks to support price controls

I see. :cool: Anything happen lately that inspired you to write about this?

[dizzle]

I am confused.

[Arnold]

The PPI (Producer Price Index) numbers came out scary high last week meaning inflation could rear its ugly head. The markets don't like inflation because that means higher interest rates and higher borrowing costs. Mind you, I day trade, so it doesn't matter to me...

[Hitch]

I see. Anything happen lately that inspired you to write about this?




Yes, the casual manner inwhich false assumptions are made and promoted by media types. Adding recent news mentioning of Carter send shivers through my spine. Many thousands of voting age Americans are not old enough to remember that in the late 70s the inflation we suffered every 4-6 weeks was roughly equal a years worth today ,and for the last decade or so.

So if you think of what something coast ten years ago and how that has changed, I can recall that much change in a single year.

[Arnold]

And the Democrats are whining about a 5.2% unemployment rate...

[Tfbandie]

Currency is valued against competing currency, so how are inflation, PPI, and exchange rates related?

As in is a rise in one a cause for rise in other? or do they all sorta act at the same time?

[Rubia Warren]

I see. Anything happen lately that inspired you to write about this?




Yes, the casual manner inwhich false assumptions are made and promoted by media types. Adding recent news mentioning of Carter send shivers through my spine. Many thousands of voting age Americans are not old enough to remember that in the late 70s the inflation we suffered every 4-6 weeks was roughly equal a years worth today ,and for the last decade or so.

So if you think of what something coast ten years ago and how that has changed, I can recall that much change in a single year.

Dang Hitch. You sure are old. :haha:






(just kiddin)

[Tfbandie]

second question from a young 'un.

How is 'cost of living' related to inflation? I know earning 50,000 dollars in my hometown is very different than earning 50,000 dollars where I go to school. So the 'value' of the dollar is less in my town, is that a form of inflation? Cause that seems to be very strongly related to what businesses feel they can charge and still have people pay (ex. gas prices at the 8 gas stations are always 15-20 cents more expensive than towns 5 minutes away)

[Hitch]

Your question demonstrates the need for a reliable definition. Differing and even rising prices are market realites and may or may not be the results of inflation. What you have noted is a picture of subjective value and market sentiments. These to relate with one another until a price is struck.

Joe's price for gas and Jim's are the same inthat each will charge enough to get the best possible margin. The differences are affected by thousands of factors from how well Joe's landlord did at the racetrack last week to whether or not Jim got that big insurance claim he was hoping for. Inflation does not enter this picture.


How is 'cost of living' related to inflation?This gets a little more sticky. So back after lunch,,,,