How Quickly Can Price Inflation Explode to the Upside?

Lumi · Mar 17, 2012

[FONT=Georgia, Times New Roman, Times, serif][FONT=Georgia, Times New Roman, Times, serif][FONT=Times New Roman, Times, serif]How Quickly Can Price Inflation Explode to the Upside?[/FONT][/FONT][/FONT]

[FONT=Georgia, Times New Roman, Times, serif][FONT=Georgia, Times New Roman, Times, serif][FONT=Times New Roman, Times, serif]by Robert Wenzel
[/FONT][FONT=Times New Roman, Times, serif]Economic Policy Journal[/FONT][/FONT][/FONT]

[FONT=Georgia, Times New Roman, Times, serif][FONT=Georgia, Times New Roman, Times, serif][FONT=Times New Roman, Times, serif][FONT=Georgia, Times New Roman, Times, serif][FONT=Times New Roman, Times, serif][FONT=Times New Roman, Times, serif]Recently by Robert Wenzel: The Ultimate Man Cave: An Underground Missile Silo[/FONT][/FONT][/FONT][/FONT][/FONT][/FONT]

[FONT=Times New Roman, Times, serif]The answer: Very quickly.[/FONT]

[FONT=Times New Roman, Times, serif]Amity Shlaes is a senior fellow in economic history at the Council on Foreign Relations. Her writings are followed carefully by the top of the top at CFR. And to a significant degree she uses Hayekian business cycle theory in analyzing the economy. She also has the distinct honor of being hated and attacked by the Keynesian Paul Krugman.[/FONT]

[FONT=Times New Roman, Times, serif]In other words, take her very seriously.[/FONT]

[FONT=Times New Roman, Times, serif]Yesterday, I wrote on how confused Bernanke was by stating that price inflation was of little concern. Here's Shlaes putting things in historical perspective:[/FONT]

[FONT=Times New Roman, Times, serif]A little is all right. That?s the message Federal Reserve Chairman Ben S. Bernanke has been giving out recently when asked about the evidence of inflation in the U.S. recovery.[/FONT]
[FONT=Times New Roman, Times, serif]Sometimes Bernanke doesn?t even go that far. He simply says he doesn?t see inflation. The Fed chairman recently described the prospects for price increases across the board as ?subdued.?[/FONT]
[FONT=Times New Roman, Times, serif]?Sudden? is more like it. The thing about inflation is that it comes out of nowhere and hits you. Monetary policy is like sailing. You?re gliding along, passing the peninsula, and you come about. Nothing. Then the wind fills the sail so fast it knocks you into the sea. Right now, the U.S. is a sailboat that has just made open water, and has already come about. That wind is coming. The sailor just doesn?t know it.[/FONT]
[FONT=Times New Roman, Times, serif]?Sudden? has happened to us before. In World War I, an early version of what we would call the CPI-U, the consumer price index for urban areas, went from 1 percent for 1915 to 7 percent in 1916 to 17 percent in 1917. To returning vets, that felt awful sudden.[/FONT]
<table border="0" cellSpacing="0" cellPadding="0" width="135" align="right"><tbody><tr><td>

</td></tr></tbody></table>[FONT=Times New Roman, Times, serif]How did it happen? The Treasury spent like crazy on the war, creating money to pay for it, then pretended that its spending was offset by complex Liberty Bond sales and admonishments to citizens that they save more.[/FONT]
[FONT=Times New Roman, Times, serif]Country in Denial[/FONT]
[FONT=Times New Roman, Times, serif]In other words, the Woodrow Wilson administration was in denial, inflating in all but name. Commenting on one complex plan to make more money available, Representative L.T. McFadden, a Pennsylvania Republican, said, ?I would suggest that if the administration believes that inflation of this character is necessary to finance the war the more direct way would be to issue the notes direct.?[/FONT]
[FONT=Times New Roman, Times, serif]Or, to return to sailing terms, the Treasury and Fed had tilted the U.S. monetary craft so far one way that it needed to lean back the other way before it could right. That leaning was the true tight money policy of subsequent years, including deflation of 10 percent and wrenching unemployment.[/FONT]
[FONT=Times New Roman, Times, serif]History has other examples. In 1945, all seemed well: Inflation was 2 percent, at least officially. Within two years that level hit 14 percent.[/FONT]
[FONT=Times New Roman, Times, serif]All appeared calm in 1972, too, before inflation jumped to 11 percent by 1974, and stayed high for the rest of the decade, diminishing the quality of life for whole cohorts. They paid the higher interest rates needed to reduce the inflation, and got a house with one less bedroom. Or no pool.[/FONT]
[FONT=Times New Roman, Times, serif]The thing about inflation is that it accelerates. The acceleration hit storybook levels in the most sudden case of all, that of Germany in 1922. Many financial analysts thought the Weimar authorities weren?t producing enough money.[/FONT]
<table border="0" cellSpacing="0" cellPadding="0" width="135" align="right"><tbody><tr><td>

</td></tr></tbody></table>[FONT=Times New Roman, Times, serif]?Tight Money in German Market: Causes of the Abnormally Rapid Currency Deflation at Year-End,? read a New York Times headline. The Germans didn?t know it, but they had already turned their money into wallpaper; the next year would see hyperinflation, when inflation races ahead at more than 50 percent a month. It moved so fast that prices changed in a single hour. Yet even as it did so, the country?s financial authorities failed to see inflation. They thought they were witnessing increased demand for money. [/FONT]
[FONT=Times New Roman, Times, serif]The greater the denial before, the faster the inflation accelerates after. Author Daniel Yergin tells the story of a student in Freiburg who ordered a cup of coffee in a cafe; the price was 5,000 marks. Then he had another. When the bill came, it was 14,000. ?If you want to save money and you want two cups of coffee, you should order them both at the same time,? he was told.[/FONT]
[FONT=Times New Roman, Times, serif]Extreme Example[/FONT]
[FONT=Times New Roman, Times, serif]Germany in the 1920s is always the extreme example. But one form of denial then warrants comparison to the U.S. today.[/FONT]
[FONT=Times New Roman, Times, serif]Bernanke talks about prices in one area - energy, for example -- as different from those in the rest of the economy. The Germans, in their denial, thought their problem was limited to exchange rates, and that their domestic economy had hope. Risibly, Chancellor Joseph Wirth tried to tie down prices by regulating foreign currency. The equivalent, and equivalently risible, move today is the Ralph Nader effort to get the administration to push down oil prices.[/FONT]
[FONT=Times New Roman, Times, serif]The reason a little inflation is not all right, and the reason inflation comes suddenly, is expectations.[/FONT]
<table border="0" cellSpacing="0" cellPadding="0" width="135" align="right"><tbody><tr><td>

</td></tr></tbody></table>[FONT=Times New Roman, Times, serif]The phrase ?perception is reality? is overused generally. But perception can be reality in monetary policy. The bond market doesn?t act merely on what it sees. It acts on what it expects of the Fed or the government. And our own Fed has let us know it?s capable of just about everything, which includes inflationary monetary policy. Disillusionment can come as fast as a gust, but building faith that the government won?t inflate again is like building a new sailboat, a project of years.... [/FONT]
[FONT=Times New Roman, Times, serif]The reason that markets haven?t jumped yet is that the last great inflation and correction happened in the late 1970s and early 1980s, just long enough ago that most adults in the financial markets don?t remember it.[/FONT]

[FONT=Times New Roman, Times, serif]I consider this column by Shlaes the most important column written to date about the developing price inflation. It for the first time paints the picture of how fast the price inflation can develop. When she writes "perception is reality", she is really discussing the change in the desire to hold cash balances. The desire to hold cash balances was very high during the financial crisis. That is now changing. As the price inflation picks up, the desire to hold cash balances will collapse causing prices to climb very fast.[/FONT]

[FONT=Times New Roman, Times, serif]Read this post day after day. It will prepare your mind for what is coming and cause you to start preparing for what is sure to be very serious price inflation, most likely double digit inflation. [/FONT]

[FONT=Times New Roman, Times, serif]Reprinted with permission from Economic Policy Journal.[/FONT]

Lumi · Mar 17, 2012

Intelligence Analysis: How Dangerous Is Citizen Dataveillance

Intelligence Analysis: How Dangerous Is Citizen Dataveillance

[FONT=Georgia, Times New Roman, Times, serif][FONT=Times New Roman, Times, serif]Intelligence Analysis: How Dangerous Is Citizen Dataveillance[/FONT][/FONT]

[FONT=Georgia, Times New Roman, Times, serif][FONT=Times New Roman, Times, serif]by Bill Rounds
How to Vanish[/FONT][/FONT]

[FONT=Georgia, Times New Roman, Times, serif][FONT=Times New Roman, Times, serif][FONT=Times New Roman, Times, serif]Recently by Bill Rounds: How To Create an Anonymous Website[/FONT][/FONT][/FONT]

have been fascinated recently with the Washington Post intelligence analysis by William Arkin and Dana Priest. Both are well known journalists who have covered the military and intelligence communities for many years. Realizing that something had changed after 9/11, they dedicated two years to investigating what the intelligence community had evolved into.

[FONT=Times New Roman, Times, serif]They first dug up the location of as many Top Secret facilities, both government and private, as possible. Then took somewhat of a guided tour, gaining access to several high ranking officials inside the Top Secret intelligence community to explain and clarify what each agency does and how they do it.[/FONT]

[FONT=Times New Roman, Times, serif]What They Discovered[/FONT]

[FONT=Times New Roman, Times, serif]Almost everyone is amazed when they see the creatures the government had created not only in size and scope, but in the amount of waste, redundancy, cost and ineffectiveness. There are 45 different government agencies with 1,271 subdivisions, all involved with intelligence. More than 2,000 private companies with government contracts provide some service to Top Secret agencies. In total, there are over 850,000 people nationwide who have Top Secret clearance working on intelligence gathering, analysis, support, implementation, etc. The massive size and scope of the intelligence community is larger than it ever was during the cold war and is directed as much at targets within the US as at targets abroad for the first time. They really have spared no expense. The US intelligence community has effectively become the ?fourth branch of government.?[/FONT]

[FONT=Times New Roman, Times, serif]The Post is clearly more shocked about the size and inefficiency of the creatures which have been created. I am more concerned with how dangerous these creatures inherently are and how difficult they are to control by their very nature.[/FONT]

[FONT=Times New Roman, Times, serif]The Real Danger Of The Intelligence Community[/FONT]

[FONT=Times New Roman, Times, serif]The Washington Post fails to point out the most dangerous part of this scientific marvel that has been created. The judicial branch cannot act as a check on the intelligence community because judicial review is not required for almost any intelligence operations. Subsequent prosecution for any illegal conduct is nearly impossible because of the Top Secret nature of the evidence. The legislative branch requires no accountability or measures of success to check and balance the intelligence community with funding restrictions. The directors of these agencies, appointed by the executive branch and confirmed by the legislative branch, have admitted that the system is beyond their control. Like a more dangerous version of Jurassic Park, these intelligence agencies are vicious creatures which have been animated, have escaped from their cages, and are taking over the park.[/FONT]

</td></tr></tbody></table>

[FONT=Times New Roman, Times, serif]The intelligence community was so preoccupied with whether or not they could build such a surveillance system, they didn?t stop to think if they should. The fourth branch of government is the most dangerous branch regardless of whether this surveillance and dataveillance of citizens is justified or not and whether it is effective or not. The sheer power and scope of this system allows unprecedented power over the lives of individuals. Should someone in any of these agencies want to exert control, no matter what the reason, the lack of accountability and lack of supervision makes it possible.[/FONT]

[FONT=Times New Roman, Times, serif]Intelligence Analysis Is Dangerous To Innocent Citizens[/FONT]

[FONT=Times New Roman, Times, serif]This kind of organization, without control or accountability, attracts sociopaths. Even if the intelligence agencies are benevolent in purpose, and even if their function is benevolent for a period of time, they will become infested with voracious velociraptors. Imagine the Corleone family having just one database administrator in their pocket. The inherent goal of anyone gathering this data is to manipulate it, find patterns, and prove those patterns to be correct. These vast collectors of information don?t want to be fed, they want to hunt.[/FONT]

[FONT=Times New Roman, Times, serif]There will be no way for innocent people to protect themselves from being devoured alive because US law prohibits citizens from protecting much of their important financial and personal data. For example, the census is a mandatory disclosure of information. It is likely possible to re-identify 87% of the census responders who thought they were anonymous. Where disclosure of data is not required by law, private companies, which are regulated by government entities, are coerced into divulging information about their customers upon request by the government with a national security letter.[/FONT]

[FONT=Times New Roman, Times, serif]Geography Irrelevant For Intelligence Analysis[/FONT]

[FONT=Times New Roman, Times, serif]The Post focuses on whether the intelligence community is too big to be effective, a legitimate concern. They also focus on the geography of the intelligence community. Geography is irrelevant when it comes to dataveillance and data aggregation and analysis. The most important information tracked by these intelligence agencies is digital. Digital info exists simultaneously in as many places as you want it to exist. Your bank accounts and financial accounts are just a bunch of digits in an electronic database. Your identity is just a few characters and numbers in an electronic database. These velociraptors do not need geography to feed on your data and they don?t need geography to hunt you.[/FONT]

</td></tr></tbody></table>

[FONT=Times New Roman, Times, serif]How You Can Escape The Park (Sort Of)[/FONT]

[FONT=Times New Roman, Times, serif]Since Top secret America is most concerned with data and information, one of the most effective ways to avoid being devoured by the dinosaurs that have taken control of the park is to control the data and information that is traceable to you with Freenet. Freenet is an open source (that means free) peer to peer network which allows you to post information to the network completely anonymously and acquire information from the network completely anonymously. It will cost anyone, including the intelligence community, millions of dollars per person to link information with identity on Freenet. It will only cost users of Freenet a few minutes in time to anonymize that data.[/FONT]

[FONT=Times New Roman, Times, serif]There are even more robust tools in Freenet which allow you to create a network among only trusted individuals. This creates even more protection against the intrusive eyes of an out of control ministry of information. It is one of the ways that Chinese, Iranian and other citizens of closed societies are able to communicate ideas and information without retaliation from their most vicious predators. This prevents any tracking of information to you unless a warrant is served to search an individual computer.[/FONT]

[FONT=Times New Roman, Times, serif]Conclusion[/FONT]

[FONT=Times New Roman, Times, serif]The Washington Post has done an excellent job discovering the scope and size of the intelligence community that poses a greater threat to Americans than Hitler, Russia, or Osama ever did. If defeating the threat of Hitler, Russia, or Osama was made easier by using Freenet, would you use it? Surveillance of citizens by government, surveillance of customers by corporations, private transactional databases, government transactional databases and other forms of search without a warrant are dangerous to a free society. Also, be sure to check out the new Privacy Tools and Resources page posted on How To Vanish that contains several intriguing videos about your privacy.[/FONT]

[FONT=Times New Roman, Times, serif]Reprinted with permission from How to Vanish.[/FONT]

[FONT=Times New Roman, Times, serif]March 17, 2012[/FONT]

[FONT=Times New Roman, Times, serif]Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.[/FONT]

Duff Miver · Mar 17, 2012

Hep me! Hep me! The sky is falling! Hep me! Hep me!

Lumi - can you remember or learn what happened the last time inflation skyrocketed to 8% annual?

Hint: Richard Nixon, 1972.

Wage and price freeze.

Then Paul Volcker took control of the Fed and kicked inflation down to 3%.

We're talking US dollars here. The currency preferred by everybody on earth. What's in your pocket, 1939 Reich-marks? Brazilian Pesos?

Jeebus Keeriist. Worry about something real.

Will Monsato stop killing honeybees?

Shit, if I had a sister, I'd get her to make your trousers snake cough up a load, just to calm you down.

Lumi · Mar 17, 2012

Duff Miver said:
Hep me! Hep me! The sky is falling! Hep me! Hep me!

Lumi - can you remember or learn what happened the last time inflation skyrocketed to 8% annual?

Hint: Richard Nixon, 1972.

Wage and price freeze.

Then Paul Volcker took control of the Fed and kicked inflation down to 3%.

We're talking US dollars here. The currency preferred by everybody on earth. What's in your pocket, 1939 Reich-marks? Brazilian Pesos?

Jeebus Keeriist. Worry about something real.

Will Monsato stop killing honeybees?

Shit, if I had a sister, I'd get her to make your trousers snake cough up a load, just to calm you down.

Yeah,

your'e right, I keep forgetting that you are an expert, in everything.

Thanks for talking me out of the clock tower

MadJack · Mar 17, 2012

Try taking one week searching out things that make you feel good, things that are positive, things that make you smile, things people do that are good, happy things. Just try it and maybe you might start feeling better about things. Anything. :0008

You're living your life dwelling on all the negatives and you can't do shit about it. Try the other side of the coin for once. There ARE happy things going on and happy people out there. Try it :0008

Lumi · Mar 17, 2012

MadJack said:
Try taking one week searching out things that make you feel good, things that are positive, things that make you smile, things people do that are good, happy things. Just try it and maybe you might start feeling better about things. Anything. :0008

You're living your life dwelling on all the negatives and you can't do shit about it. Try the other side of the coin for once. There ARE happy things going on and happy people out there. Try it :0008

actually I'm quite happy, I had a great week with my son during his spring break. My garden is looking good, my daughter is happy.

My business is thriving on top of the Medical business. Next step is Montana. Or I want to be taller :shrug:

MadJack · Mar 17, 2012

illuminati said:
actually I'm quite happy, I had a great week with my son during his spring break. My garden is looking good, my daughter is happy.

My business is thriving on top of the Medical business. Next step is Montana. Or I want to be taller :shrug:

Glad to hear it.

:toast:

Duff Miver · Mar 18, 2012

illuminati said:
actually I'm quite happy, I had a great week with my son during his spring break. My garden is looking good, my daughter is happy.

My business is thriving on top of the Medical business. Next step is Montana. Or I want to be taller :shrug:

http://www.city-data.com/city/Missoula-Montana.html

They say Missoula is a great place to live. You'd be neighbors with James Lee Burke, one of the coolest people on earth. I think I'd rather drain a bottle of Bourbon with him than anyone else I can think of. :0074

Put lifts in your shoes or date only short women. :mj07:

Lumi · Mar 18, 2012

This is what I am looking at in Montana

160-Acre Blackfoot Valley Ranch (Montana)

Located in the stunning Blackfoot River Valley of western Montana, this fully equipped 160-acre ranch sits at the base of the Bob Marshall Wilderness complex on a county maintained, dead-end road. (Click on photos for larger image.)
In addition to the 1,456 square-foot ranch house, there is a lovely guest cabin with covered porch, a solar dome 26' greenhouse for true year-round gardening, three large and well-maintained horse/cattle barns, an 8-bay vehicle/equipment shed (96' x 32'), a 32' x 32' cottage with 12' covered porch, a 15' x 20' cottage with a half-bath, and several other smaller buildings. But that's not all - there's a 70' x 130' indoor arena (big enough to park semi-trucks inside with room to spare) and a 100' x 32' hay barn, too.
Priced at $695,000.

All buildings were constructed since 1998, and most were built since 2004. The main home, guest cabin and one other large cottage have wood stoves. There are four wells on the property - three regular ones and one hand-pump well for "just in case."
The solar dome greenhouse - made by Growing Spaces - makes gardening in the middle of a Rocky Mountain winter entirely feasible, and fresh greens from the garden in February were a real treat. In that photo of the greenhouse, taken on a cold January day, you can see that it was already so warm inside the dome that the automatic vent on the top of the greenhouse had opened!

Fully equipped for small-scale ranching, this property is "ready to go" for horses and/or cattle, with 7 automatic watering units supplying water to the barn corrals and the 160 acres completely cross-fenced into more than a dozen different paddocks for rotational grazing. All the fencing you could ever need is already in the ground. The ranch has a grazing plan by the county extension office that can support 10 cow-calf pairs, or a smaller number of cattle while grazing other livestock. There is an irrigation water right of 7.5 cfs from a ditch with a head gate on the North Fork of the Blackfoot.

With its remote location, the ranch offers privacy, quiet, and seclusion while still providing easy access to Montana Hwy 200 three miles away. The ranch is just 60 miles east of Missoula and 70 miles northwest of the state capital, Helena - close enough if you need anything, far enough away if you don't. But the distance doesn't mean being cut off -- the property has excellent high-speed DSL Internet access through a great local telephone co-op, so you can run your own business from this spot. A community owned power co-op that puts its customers first provides the electric service. If you want to go off-grid, there is plenty of sun in the Big Sky overhead, even in winter, and a decent amount of wind, too.

With all this land and all these buildings, property taxes are only $2,000 a year. That's right. $2,000. Welcome to Montana.

This is in Oregon

Safe Haven Ranch (Oregon)

<form style="display: inline;" class="mt-enclosure mt-enclosure-image" contentEditable="false">

</form>186 acres, 3bdrm house (1500 s.f.) plus 2 bdrm caretaker house (800 s.f.)

Secluded - abundant "pure" spring water - year-round creek - dammed creek pond for added watering - underground 1.25 mile on grid electricity and phone line - large metal barn plus log barn. - Fruit trees - 3 garden areas. Green house plus 3 portables to be built.

$485,000 (or $450,000 - without food & equip.)

<form style="display: inline;" class="mt-enclosure mt-enclosure-image" contentEditable="false">

</form>Auxiliary electric system - diesel gen-controller-battery system - Elec. & propane lighting system - propane and wood cooking & heating. Fully equipped.

Tractor - 2 ATV - garden tractor - 5 apprx 600 gal. fuel tanks. 2 5,000 gal. water tanks for fire protection. 1000 & 250 gal. propane tanks.

Four large safes, - 5 year food supply for 10 people - grains - beans - dehydrated
foods. - washer & dryer. - secluded - "one-of-a-kind"

$485,000 (or $450,000 - without food & equip.)

<form style="display: inline;" class="mt-enclosure mt-enclosure-image" contentEditable="false">

</form><form style="display: inline;" class="mt-enclosure mt-enclosure-image" contentEditable="false">

</form>

Duff Miver · Mar 18, 2012

Love 'em both, the Montana one a little bit more.

Will you adopt me? Please?

I can be packed by tomorrow.:0008

Search

Search

How Quickly Can Price Inflation Explode to the Upside?

Lumi

LOKI

Lumi

LOKI

Duff Miver

Registered User

Lumi

LOKI

MadJack

Administrator

Lumi

LOKI

MadJack

Administrator

Duff Miver

Registered User

Lumi

LOKI

Duff Miver

Registered User

We value your privacy