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Old 08-28-2010, 06:01 PM   #21
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Of course, the D.C. area is highly recession-resistant when you consider their main industry...
When given the option of being moved there a few years ago, with a promotion and higher "locality pay" additions to my paycheck, I strenuously declined. In my opinion it is not a very affordable place to live, in comparison with the South.

But it does have its advantages. Imagine having the Smithsonian available to you every day! And there is so much available to see and do in D.C.
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Old 08-28-2010, 06:43 PM   #22
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W2R, The cost of tree work has gone down here from two years ago, but I attribute that more to the increase in price after Katrina and Rita.
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Old 08-28-2010, 06:45 PM   #23
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W2R, The cost of tree work has gone down here from two years ago, but I attribute that more to the increase in price after Katrina and Rita.
Probably so. It has been five years, can you believe it? It seems like just yesterday.
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Old 08-28-2010, 06:52 PM   #24
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OK, I looked for other articles on 'Biflation'. Just about everything refers back to the article above. I did not find any economic journals on it, however I did not look hard. I did find the following:

Forget The Inflation/Deflation Debate: The Real Threat Is Biflation | ETF Database

on how to invest.
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Old 08-28-2010, 07:20 PM   #25
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Thanks very much for posting that! I'm one of those folks who are tired of hearing that inflation is low. Using my local beer prices as an example of inflation, I have noticed the cheap beer has gone up about 15 % over the last 2 years but the expensive stuff has gone up a good 25% over the last 2 years. The typical $7.99 per case stuff is now $9.25 and the typical $23.99 a case stuff is now $30.99. Interestingly, I have started buying more of the expensive beer than I used to. I look for one of the expensive beers that has risen less than the others in price, and buy it.

I used to buy a locally brewed beer for $6.99 a case of 24 bottles 5 years ago. The very same case now costs $11.99. I stopped buying it when it hit $10.99 a case.
And yet wine prices have remained pretty flat here in PA. Thank the heavens for state run liquor stores!
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Old 08-28-2010, 08:40 PM   #26
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And yet wine prices have remained pretty flat here in PA. Thank the heavens for state run liquor stores!
It depends which wines you are looking at. At the mass market end of the industry, excess supply has driven prices down. In HK we also had the benefit of scraping the 70% duty which used to apply.

At the top end, the prices just keep going up:Liv-ex: The Fine Wine Exchange

It's well past the stage where the wines I purchased year's ago for future drinking are now too expensive to feel comfortable drinking :-(

Prices for this year's en primeur were insane.
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Old 08-28-2010, 09:45 PM   #27
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Don't forget junk food inflation. Has anyone else noticed that the bargain basement store brand of junk food is either disappearing, or soaring into the infinite? My favorite local pretzels just aren't there any more. I used to get 3 pounds of great pretzels for $2.29. ( Forget about 10 years ago when they were just 69 cents for a 3 pound bag ) Now my store brand is totally gone and the other stuff is all way over $1 a pound. For junk food !

I now get my pretzels at a Dollar store. I get a 12 ounce bag for $1. Unbelievable.

BTW, my wages have been static since I started my current job 4 years ago.

Perhaps the new masses of folks existing on unemployment compensation and government subsidies are all out there dulling their pain with massive doses of junk food ( and beer) , driving the price up.
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Old 08-29-2010, 06:41 AM   #28
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"With biflation on the other hand, the economy is tempered by increasing unemployment and decreasing purchasing power"

"In economics, the term stagflation refers to the situation when both the inflation rate and the unemployment rate are high. "

Is there a difference? Seems to me Biflation is a rename of Stagflation.
No. Stagflation happens during periods of actual inflation. Bi-flation, on the other hand, apparently is a phenomenon experienced by those who always see rampant inflation, even when prices are falling.
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Old 08-29-2010, 09:28 AM   #29
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No. . . . Bi-flation, on the other hand, apparently is a phenomenon experienced by those who always see rampant inflation, even when prices are falling.
No. "Bi-flation" is a phenomenon experienced by those who purchase primarily basic goods. This "basket" (composed of staples and essentials) is a selective subset of the "basket" used to compute CPI and many other measures of consumer prices, and therefore we should not be surprised if the inflation amount is different between these two "baskets."
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Old 08-29-2010, 10:56 AM   #30
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I see biflation as a condition where the stuff we consume (food, fuel, drugs, toilet paper...) goes up in price (or just as frequently, shrinks package quantity) while assets (stocks, real estate,...) decrease in value. Not something imagined, something actually occurring.

Speaking of shrinking package quantity, I ran across this: Scott Toilet Tissue

Scroll down and check out the product reviews from customers...
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Old 08-29-2010, 12:48 PM   #31
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Great find!
-1. No offense intended, I'm just applying some skepticism here.

I've spent an hour googling for the biflation term's "creator", his company, his paper, etc. Also I tried checking out the references in the Wikipedia entry.

Result: dead ends and circular references back to the Wikipedia article by bloggers.

I can find nothing that says this theory has any legitimacy to it, at least by conventional measures.

Other than this thread, of course. There's always cutting edge discussions of macroeconomic theory here at ER.org

Just to clarify, I think there's some merit in this concept and it's a fun topic. But let's not get too carried away, however, by thinking we've discovered a hidden key to explaining the current disorganized state of the U.S. and world economies.
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Old 08-29-2010, 01:52 PM   #32
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I have built a "biflation" scenario in my FIRE plan.

For example, say my retirement income is $60K, including $30K for essentials and $30K for discretionary. If one year I give myself a 3% COLA, most of the 3% x $60K = $1,800 increase in annual income is expected to go to essentials ($31.8K, a 6% increase) and none to discretionary expenses (still $30K). Over time, more of our income will go to pay for essentials and less for discretionary expenses. I am OK with that.

I think that taxes could be the most inflationary item in my budget right now.
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Old 08-29-2010, 03:30 PM   #33
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Wouldn't the price of items which are nonessential but which may bring solace in tough economic times - be dependent on what you could carry while still able to ride the bike
Nah since if you are determined what you can't carry on bike you can take a bus and walk with. I once walked 4 miles with a 36" TV since it was on sale and I had no car and no tv having just moved to a new place and decided to leave the car at home and had not moved anything else up.
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