Inflation or Deflation?

[endthefed]

I would love to see some statistics backing any of this up. How do y'all determine that we have a shrinking money supply? Didn't the Fed just create a few trillion dollars? Poof? Out of nothing? And government belt tightening? Isn't that like limited nuclear war? Americans are saving money? Geithner Still Claims Savings Rates Are Up. Savings Rates Still Ain't Up. - Hit & Run : Reason Magazine

And I'm especially incensed by the statement "Despite the best effort of the all bankers in the world to inject money into the system". Where do you get that? All I'm reading is about the incredible difficulty individuals and small businesses are having getting credit, due to the banks having received all the bailout money at basically no interest, buying gov't bonds with it at 3+%, and stockpiling the profits.

It sounds like y'all and I are not living in the same reality. Of course, I've had that problem in the past, but I haven't done any of that stuff recently.

you are correct. the banks are sitting on the (our) money. it's on deposit at the fed or buying US govt bonds. when you can borrow at zero percent, why take any risk?

secondary benefit -it keeps the economy sluggish and unemployment high. this keeps velocity down - which hides their monetary inflation and provides friction against rising prices (the public's definition of inflation).

the potential energy (pent up money) is huge -- rising prices will take off as soon as velocity returns to normal.

 

[samclem]

And in the US, because we have devised and insist on keeping a uniquely dysfunctional health care system.

Ha

I'll agree our health care "system" is dysfunctional. But lots of countries with the centrally-managed or single-payer systems have experienced higher medical inflation than the US has, so I don't think we can lay the blame entirely on how our "system" is set up. (Yes, our per person costs are still higher than almost any other country). Source: Business Week, Sep 09

 

[endthefed]

this is why we need a free market solution to HC. get the government and their schemes/anticompetitive regulations out of it. the natural condition of a free market is falling prices....as processes and output is streamlined over time.

single payer or the US hmo + fed govt model are both anti-free market...and the results show that.

 

[haha]

I'll agree our health care "system" is dysfunctional. But lots of countries with the centrally-managed or single-payer systems have experienced higher medical inflation than the US has, so I don't think we can lay the blame entirely on how our "system" is set up. (Yes, our per person costs are still higher than almost any other country). Source: Business Week, Sep 09

I view this as a natural outcome of these countries having a smaller base expense. Just like it is easier for Nevada to grow population very rapidly than it is for California.

Ha

 

[Meadbh]

This morning, the Bank of Canada became the first G8 central bank to raise interest rates, by 25 basis points, to 0.5%. But Mark Carney did not indicate that this would necessarily be the first of many increases. He thinks there are inflationary pressures but that the global economy is not out of the woods yet.

Bank of Canada hikes interest rates - The Globe and Mail

This doesn't look like deflation to me....

 

[DoingHomework]

And in the US, because we have devised and insist on keeping a uniquely dysfunctional health care system.

Ha

Of course. I agree 100%. But increasing demand due to an aging population is also a factor. Realistically, if prices doubled, most people could not avoid healthcare. The most they could do to signal displeasure with prices would be to accept more risk and take on less insurance or accept higher deductibles. I have personally come to believe that we need much more regulation of health care even though I am generally against government involvement.

Increasing demand also explains why college costs are going up. When colleges can raise tuition by 25% in a year and not measurably affect demand (enrollment) I think that is clear evidence that costs can still go up. It is unfortunate for those paying though.

 

[ziggy29]

Increasing demand also explains why college costs are going up. When colleges can raise tuition by 25% in a year and not measurably affect demand (enrollment) I think that is clear evidence that costs can still go up. It is unfortunate for those paying though.

It's also testimony to the staying power of the myth that college ensures "earning power" and not going to college ensures poverty.

 

[endthefed]

Of course. I agree 100%. But increasing demand due to an aging population is also a factor. Realistically, if prices doubled, most people could not avoid healthcare. The most they could do to signal displeasure with prices would be to accept more risk and take on less insurance or accept higher deductibles. I have personally come to believe that we need much more regulation of health care even though I am generally against government involvement.

Increasing demand also explains why college costs are going up. When colleges can raise tuition by 25% in a year and not measurably affect demand (enrollment) I think that is clear evidence that costs can still go up. It is unfortunate for those paying though.

government in the market is what is driving up prices - exactly like housing.

sallie mae = freddie/fannie

artificially low interest rates subsidized by the federal government + free tuition to targeted groups = unchecked rising prices.

if the students actually had to pay, we wouldnt be seeing the meteoric rise.