Wholesale inflation at 13.2%

[shade]

Thank your Comrades and central planners in the People's Republic of DC.

Inflation at the wholesale level rose 1.1% last month. It rose at a similar amount in February and January. We are now experiencing an annualized rate of wholesale inflation of 13.2%.

Oh, but don't worry, the "core" rate (pretending you don't use electricity, gas, or food) is only .2%. Rejoice! Just don't eat, go to work, or turn on the lights and you will not experience inflation!

This inflation is related to the prices in our economic supply chain. IE, if Tyson increases the price they charge your grocery store for chicken. If your grocery store has a profit margin, they can eat the cost for a while and you may not experience the full increase.

The way this rate has been going (as high as 2.6% last November) you will and are experiencing this price increase.

http://biz.yahoo.com/ap/080415/economy.html


At what point will you guys wake up and realize that the government causes most of our large scale problems through overspending and inflating the money supply? The fed is pumping in $200 billion a month now. That is huge huge huge inflation.

[18C]

I'm just wondering where they're getting the money for all of these economic solutions, since we're already in so much debt.

Just like the "economy stimulus" checks. WE HAVE NO MONEY TO GIVE OUT. They're just going to hike up taxes to pay for it.

It's all just one big facade.

[SmartPolitician]

You can thank the imperialist reactionaries and their running dogs for the USA economic crisis. Seems like these days, the dollar sign is more powerful than the people. Sad that a piece of paper is more important then the interests of human beings. But, what can you do. In a criminal imperialist market, run on donations to non-citizens at the cost of legitimate citizens. Only the shrewdest survive.

[shade]

I'm just wondering where they're getting the money for all of these economic solutions, since we're already in so much debt.

Just like the "economy stimulus" checks. WE HAVE NO MONEY TO GIVE OUT. They're just going to hike up taxes to pay for it.

It's all just one big facade.

They make it out of thin air, which causes this inflation. The federal reserve and treasury have been creating $200 billion a month out of thin air for the past couple months and will continue to do so for the next few months. This is going to have disasterous long term effects, and directly causes the type of inflation we are seeing now.

Its pretty simple really. When you make more dollars, they are worth less. Many in our government don't understand that - or they simply hope you do not.

[IrishNed]

Inflation at the wholesale level rose 1.1% last month. It rose at a similar amount in February and January. We are now experiencing an annualized rate of wholesale inflation of 13.2%.

Oh, but don't worry, the "core" rate (pretending you don't use electricity, gas, or food) is only .2%. Rejoice! Just don't eat, go to work, or turn on the lights and you will not experience inflation!I don't know who came up with the idea to exclude Food and Energy costs from the Inflation numbers. But that's where I spend most of my retirement dollars. A large portion of that is for home heating oil, without which we would really be in deep do-do

This inflation is related to the prices in our economic supply chain. IE, if Tyson increases the price they charge your grocery store for chicken. If your grocery store has a profit margin, they can eat the cost for a while and you may not experience the full increase.

The way this rate has been going (as high as 2.6% last November) you will and are experiencing this price increase.Consumer Price Inflation is already here! Bread & milk have gone up; fresh fruits & vegetables are higher than ever; Coffee and Orange juice are going out of sight. The Tyson Chicken you allude to is one of very few meats we can still afford; and their prices have been inching upward. ... At what point will you guys wake up and realize that the government causes most of our large scale problems through overspending and inflating the money supply? The fed is pumping in $200 billion a month now. That is huge huge huge inflation.Not 'most ... problems;' the Bush Administration is responsible for all of our large scale problems. They can't just keep cranking up the Printing Press and 'increasing the money supply.'

[American Infidel]

Sounds like it's time to start bombing federal buildings, eh?

Viva Guy Fawkes!

That's the scary part about the die-hard RonPaulitans.

“Remember, remember the fifth of November,
The gunpowder, treason and plot,
I know of no reason
Why gunpowder treason
Should ever be forgot.”

[shade]

Sounds like it's time to start bombing federal buildings, eh?

Viva Guy Fawkes!

That's the scary part about the die-hard RonPaulitans.

“Remember, remember the fifth of November,
The gunpowder, treason and plot,
I know of no reason
Why gunpowder treason
Should ever be forgot.”
Yes. I am sure you will love your $4 gas and $6 milk and $3 bread. You will smile and take it like a good little nationalist. You will get your wish in a year.






Yeah Tyson is nice and cheap. Mainly because they use slave labor from Mexico... but yeah. I especially like their microwavable honey bbq wings.

[chalupa]

You're not going to see any action by the people until Bud Light, Miller, and Coors, become prohibitively expensive.

Or ammo. Up the price of ammo and you got issues.

[Henkie]

You're not going to see any action by the people until Bud Light, Miller, and Coors, become prohibitively expensive.

Or ammo. Up the price of ammo and you got issues.

Well, no. That's because people can't afford the gas to drive to protests...

[shade]

You're not going to see any action by the people until Bud Light, Miller, and Coors, become prohibitively expensive.

Or ammo. Up the price of ammo and you got issues.

Ammo prices have sky rocketed. .223 and .308 ammo has gone from like 10 cents a bullet to 45 cents due to the war. The military buys it all up and it drives the price up. As people have switched to other types of ammo, demand has risen for those causing them to go up a bit, but not as much.

[Pajman]

At what point will you guys wake up and realize that the government causes most of our large scale problems through overspending and inflating the money supply? The fed is pumping in $200 billion a month now. That is huge huge huge inflation.
At what point will you wake up and realize that people are not as dumb as you think? Of course we are overspending. How many people would deny that claim? Here's where most of us disagree with you: we don't want RP to try and fix the problem.

[18C]

Sounds like it's time to start bombing federal buildings, eh?

Viva Guy Fawkes!

That's the scary part about the die-hard RonPaulitans.

“Remember, remember the fifth of November,
The gunpowder, treason and plot,
I know of no reason
Why gunpowder treason
Should ever be forgot.”

Every post you make I picture you as some sort of small humanoid creature with warts and a crooked nose. Maybe some crazy weird colored hair and you live under a bridge or something like that.

[Thurst]

Oh, but don't worry, the "core" rate (pretending you don't use electricity, gas, or food) is only .2%. Rejoice! Just don't eat, go to work, or turn on the lights and you will not experience inflation!



The reason that core inflation excludes food and energy is becuase they can be extremely volatile. These sharp rises may only be apparent in the short-run and are not a true measure of overall inflation.

But I agree, printing money as a way of increasing the money supply is not good. Its basically an "inflation tax" that the government can set at whatever it wants that reduces the real purchasing power of consumers. However, I assume that their not entirely dumb, and are using other methods of increasing the money supply, such as buying bonds from the public.

[shade]

At what point will you wake up and realize that people are not as dumb as you think? Of course we are overspending. How many people would deny that claim? Here's where most of us disagree with you: we don't want RP to try and fix the problem.

People are not stupid. They are ignorant. If you watch television news tonight, you will not hear about this inflation. While people are not stupid, they are lazy. They will make intelligent decisions based on the limited, flawed, or out right inaccurate information they are provided (as opposed to seek out/research). It is like a compass pointing towards a magnet. You know it will point towards the strongest magnetic source (people are smart). But if that magnetic source is not the north poll... you will get lost.

This is not about Ron Paul. People are only willing to support someone like Ron Paul if they already understand a lot of these other problems and agree about what the solution is. If someone thinks the solution is socialism or communism, that is a whole other can of worms.


The reason that core inflation excludes food and energy is becuase they can be extremely volatile. These sharp rises may only be apparent in the short-run and are not a true measure of overall inflation.

But I agree, printing money as a way of increasing the money supply is not good. Its basically an "inflation tax" that the government can set at whatever it wants that reduces the real purchasing power of consumers. However, I assume that their not entirely dumb, and are using other methods of increasing the money supply, such as buying bonds from the public.They only started doing this the past couple years, as inflation has taken off. One month can certainly be more volatile than the next (especially if weather is the cause). But we have had several months in a row of this kind of inflation now. It is an annualized number... and 25% of the year's numbers are in and all show this kind of figure.

[IrishNed]

You're not going to see any action by the people until Bud Light, Miller, and Coors, become prohibitively expensive.

Or ammo. Up the price of ammo and you got issues.Now you've got my attention! I heard a report on the radio earlier this week that Brewers were upping the price of Beer because of a shortage of Hops. It seems that farmers are planting Maize instead of Hops because prices have risen and Corn is used for producing Ethanol. I went to buy my weekly 30-pack of Coors Light and all the beer prices have gone up at least a dollar a case.

What goes around comes around; and it's beginning to piss me off!

Just call me Joe Sixpack

[Nocturnal]

^Really? that's it... time for some action.

[American Infidel]

Ammo prices have sky rocketed. .223 and .308 ammo has gone from like 10 cents a bullet to 45 cents due to the war. The military buys it all up and it drives the price up. As people have switched to other types of ammo, demand has risen for those causing them to go up a bit, but not as much.

Gah!!! You don't buy bullets...you buy cartridges. A bullet wouldn't do you any good...unless you had a slingshot or used it to bite on while I amputated your leg.

By the way, did you meet yesterday in Washington, for Ron Paul's patriotic get-together (http://ageofhooper.blogspot.com/2008/04/ron-paul-rally-south-lawn-us-capitol.html)? If nothing else, you die-hard Paulbearers are colorful characters. I won't mention the signs at the bottom of the page...

[clutch-monkey]

Gah!!! You don't buy bullets...you buy cartridges. A bullet wouldn't do you any good...unless you had a slingshot or used it to bite on while I amputated your leg.

i buy bullets.
fuck factory loads

[American Infidel]

i buy bullets.
fuck factory loads

Well, I guess you got me on that one...

[clutch-monkey]

Well, I guess you got me on that one...
when first shot counts the most, handloads are the way :p

[American Infidel]

I agree. So, do you fill all your casings with the same amount of grain or mix it up, to produce a faster muzzle-speed vs. less recoil?

[clutch-monkey]

do you mean of the same batch? mix it up? :uhoh: i try for consistency :ahhh:
i don't usually go for overly hot loads (or light loads either), just mildly hotter than run of the mill factory loads with the bullet style of my choice. i don't really believe the extra wear on the barrel and recoil is worth the increase in muzzle velocity (law of diminishing returns etc etc). but that's just me, and i'm not exactly competitive benchrest style precision :D

[shade]

Gah!!! You don't buy bullets...you buy cartridges. A bullet wouldn't do you any good...unless you had a slingshot or used it to bite on while I amputated your leg.

By the way, did you meet yesterday in Washington, for Ron Paul's patriotic get-together (http://ageofhooper.blogspot.com/2008/04/ron-paul-rally-south-lawn-us-capitol.html)? If nothing else, you die-hard Paulbearers are colorful characters. I won't mention the signs at the bottom of the page...

Nice pic.

No, actually the most recent time I saw Ron Paul was in PA. I was visiting a customer in Ohio and my flight was out of Pittspurgh the next morning. He had a rally that night and I showed up and sat next to Carol.




Meh, I call them bullets. Sue me. I do have an AR15 btw.

[Sketcher]

As for the home foreclosures, the biggest problem isn't the government - it's the homeowners. I saw an article a while back (I'll see if I can find it again) explaining how people are increasingly paying much more than they can afford for a home. The tip that experts are giving is to pay about 25% less than what the bank tells you that you can afford. Even if your bank tells you that you can afford a $200,000 house, it would be very irresponsible to pay that much.

[shade]

As for the home foreclosures, the biggest problem isn't the government - it's the homeowners. I saw an article a while back (I'll see if I can find it again) explaining how people are increasingly paying much more than they can afford for a home. The tip that experts are giving is to pay about 25% less than what the bank tells you that you can afford. Even if your bank tells you that you can afford a $200,000 house, it would be very irresponsible to pay that much.

That is definitely part of it. But the other part is why houses are valued so high in the first place. In reality, houses have not "gone up in value" very much. Only in places where the population went up a lot and land is scarce has their been much true increase in value. The overall nationwide prices just went up due to inflation, the dollar going down, and flippers enabled by artificially low interest rates (Federal Reserve).

[Pajman]

At what point will you guys wake up and realize that the government causes most of our large scale problems through overspending and inflating the money supply? The fed is pumping in $200 billion a month now. That is huge huge huge inflation.
The Fed isn't creating money to fund the government (they can't anyway according to federal laws). The Fed adjusts the money supply according to the non-accelerating inflation rate of unemployment. Is our economy doing so fabulously that we don't need any monetary stimulus?

[chrisvet]

what point will you guys wake up and realize that the government causes most of our large scale problems through overspending and inflating the money supply? The fed is pumping in $200 billion a month now. That is huge huge huge inflation

Thank you for injecting reality into this situation. The privately owned fed, includes past members who simulateously financed hitler as well as the communist revolution.

These men profit from 3 things:

Dumbing down America (ranked 17th in developed nations)

Excessive socialism (and expanding gov't)

War (and the wonderful loans they give with money printed out of thin air to the US)

[chrisvet]

As for the home foreclosures, the biggest problem isn't the government - it's the homeowners. I saw an article a while back (I'll see if I can find it again) explaining how people are increasingly paying much more than they can afford for a home. The tip that experts are giving is to pay about 25% less than what the bank tells you that you can afford. Even if your bank tells you that you can afford a $200,000 house, it would be very irresponsible to pay that much.

Homeowners are only mice in a labratory cage. Inflation, booms, crashes, expanded credit, are all created by gov't and the international bankers who control the gov't.

95% of the media is owned by the same folks who own the Federal Reserve, which is why nobody ever points to the real reason America (and the rest of the world) is so deeply fucked.

People are losing jobs to outsourcing, not because of greedy CEO's, but because of mindless/ endless regulations and excessive corporate taxation. These lost jobs are one of many factors the bubble has burst.

[shade]

The Fed isn't creating money to fund the government (they can't anyway according to federal laws). The Fed adjusts the money supply according to the non-accelerating inflation rate of unemployment. Is our economy doing so fabulously that we don't need any monetary stimulus?

Where is the $200 billion a month coming from?

[Pajman]

Where is the $200 billion a month coming from?
Go reread my post. I said that the Fed isn't creating money to fund the government. The sentence implies that the Fed is creating money (just not for the purpose of funding the government), doesn't it?

[Henkie]

Oh, but don't worry, the "core" rate (pretending you don't use electricity, gas, or food) is only .2%. Rejoice! Just don't eat, go to work, or turn on the lights and you will not experience inflation!

I think this part is being ignored. Partly, because it's meaning is complicated. Inflation, in this context, means an increase in prices. The text quoted above (and I am fully going on the info supplied in this thread, I don't feel like actually doing the research) suggests that the bulk of the inflation is due to increases in the price of energy and food. The rest is apparently basically in check (although .2% per month is still pretty high, but not hugely so). This is significant, because both these products don't respond well to market-forces, especially on the supply side (the raise in price won't significantly increase the amount of oil that we pump out of the ground, and the amount of farmland is not going to increase that much either, so increased demand is met with increased prices, rather than increased production). And while both a lot of energy and food is probably imported, the difference with the inflation for other products suggest that it's probably not all because of the weak dollar, but more likely because of a global increase in demand. And while it pains me to say this (I do like a bit of Bush-bashing), a global increase in demand is hardly to blaim on the governement.

[shade]

Go reread my post. I said that the Fed isn't creating money to fund the government. The sentence implies that the Fed is creating money (just not for the purpose of funding the government), doesn't it?

Ok I read to quickly and glazed over the italics.

You are right. The money first has to be laundered through the private sector before it can fund the government :ahhh:

[shade]

I think this part is being ignored. Partly, because it's meaning is complicated. Inflation, in this context, means an increase in prices. The text quoted above (and I am fully going on the info supplied in this thread, I don't feel like actually doing the research) suggests that the bulk of the inflation is due to increases in the price of energy and food. The rest is apparently basically in check (although .2% per month is still pretty high, but not hugely so). This is significant, because both these products don't respond well to market-forces, especially on the supply side (the raise in price won't significantly increase the amount of oil that we pump out of the ground, and the amount of farmland is not going to increase that much either, so increased demand is met with increased prices, rather than increased production). And while both a lot of energy and food is probably imported, the difference with the inflation for other products suggest that it's probably not all because of the weak dollar, but more likely because of a global increase in demand. And while it pains me to say this (I do like a bit of Bush-bashing), a global increase in demand is hardly to blaim on the governement.

Generally good thinking. I would just like to point a few things out.

Food prices are market influenced (year over year generally). If farmers see that one type plant is selling for a higher profit margin than another, they tend to grow more of it next year. The government is telling them that they will get more subsidies if they grown grains for ethanol instead of food production, so they do. That was planted last year, so this year we are harvesting less food and prices have gone up accordingly. The thing is, we are set to give even more money for ethanol next year so the same trend will continue with food prices.

On the energy side, it is heavily influenced by market forces. Different oil rigs/wells cost more to operate than others. Depending on the price of oil, you will literally see some rigs turn off or on based on that price. If one well costs $80 per barrel to pull out of the ground and another costs $60 per barrel, and the price of a barrel of oil is $70, the $80 well will be shut down. They will wait until the price meets a certain required minimum margin, like $90 per barrel, before they turn it on. It does not make sense to spend $80 to pull something out of the ground and sell it for $70.

As the price of oil goes up and up and up, you will start to see more Canadian oil sands production (more oil than all of the middle east, but hard to process). And so on. Just depends on price... and the market sorts it out.

[Henkie]

About energy, it is true that when energy prices rise, other forms of energy become profitable, but that's a mechanism that will slow down rising prices, never make the prices drop (because if prices drop, those exact same energy sources aren't profitable anymore). The same goes for food. If you change food production from the one crop to another, that increases the price of the other, they most likely won't compensate for eachother, but it's a significant stabalizing mechanic, either way.

[shade]

About energy, it is true that when energy prices rise, other forms of energy become profitable, but that's a mechanism that will slow down rising prices, never make the prices drop (because if prices drop, those exact same energy sources aren't profitable anymore). The same goes for food. If you change food production from the one crop to another, that increases the price of the other, they most likely won't compensate for eachother, but it's a significant stabalizing mechanic, either way.

You are pretty much right on energy.

5 years ago you would be right about food for the most part. What do farmers grow? For the most part they either grew food or textile supplies (cotton etc). Now it is split 3 ways - food, textiles, energy. While they grow energy instead of food/textiles, food/textile supplies go up in price all else equal.

I would not mind if the free market was doing that... but it is not. The government is telling farmers to grow energy instead of food/textiles.