Inflation?

[widebody911]

The pundits claim inflation is nil, but I just paid +$40 more each for a set of rear track tires.

[gaijindabe]

Yeah, but that little smiley dude just knocked off 14 cents off the 10lb "tub-O-lard" snackables at WalMart..

[widebody911]

How long until the Chinese start making a Hoosier knockoff? Call me a commie, but a $29 racing tire would rock!

[RoninLB]

inflation can be difficult to pin while it's in the early stages of motion. The easiest way is to watch the money supply. ie: to many dollars chasing few goods. Gold prices have been an historical leading indicator measure. High gold prices = inflation.

The trade deficit is an example of our $ chasing goods worldwide. If we didn't have the trade/current acc't deficit another country would have to take over our deficit or mfg decrease production. Decreasing production decreases jobs. Decreasing jobs in countries like China, India, etc creates instability. That's one of the reasons that China buys our bonds. They'll stroke the screamers with US bond bs to pacify them.

There should be a balance between savings and investment to curtail inflation. All the post "bubble" excess $ is searching for investment and the only thing available is bonds. The bond demand keeps the spread of interest rates above mkt perceived inflation very low. How long will this global imbalance last? Nobody knows. The US has the role of giving the world something to believe in due to our success in monetary policy which produces low and stable inflation. Mkt's take years to adjust. What's going on now is a worldwide adjustment to the late 90's "bubble" excess volume of $.

The world currency mkt's are another story.

[Moneyguy1]

The cost of energy is a pervasive force in the economy; from providing power to produce, fuel for farming and the delivery of goods and services. Sooner or later, the increases will begin to have an effect on the overall cost of these goods and services. Once this starts, it will initiate a feedback loop. Cost of living increases, labor costs will increase. Increased labor costs added to the cost for goods and services. In turn.........

Bottom line: Oil runs the world, and that includes the economies of most nations. As long as energy is imported at the current rate, and as long as emerging nations are bidding up the price, this situation will continue to exist and get even worse. And digging for a few million barrels in the Arctic is like putting a band-aid on a bullet wound.

But, what the heck...might as well buy that Ford Exploder and have fun while I can...Might as well as join the "ME" generation to the hilt!!

[RoninLB]

We should buy every oil field in Mexico. If retireds can't heat their homes due to high costs then Bush is going to make a deal with Pres Fox of Mexico that he can't refuse.

If we own those fields we're home free.. may God bless America.

[Moses]

Originally posted by RoninLB
We should buy every oil field in Mexico. If retireds can't heat their homes due to high costs then Bush is going to make a deal with Pres Fox of Mexico that he can't refuse.

If we own those fields we're home free.. may God bless America.

Ah, Mexico. The great geopolitical conundrum. Something like 8,000 miles of coastline. Superior weather for agriculture. Gold, silver and oil. Timber. Tourism. An incredible labor force. They should be the economic powerhouse of our hemisphere.

[CarreraCab]

Moses, You would think that Mexico would be a heavyweight in our hemisphere, with all that they have going for them, but the majority of their workforce is over here, and sending money back to their families. Even with the paltry wages they get over here, they manage to save their money and support their families back home. It makes you wonder if they could get a decent wage and healthcare in their own country, maybe they would stop killing themselves trying to get here ? Doug