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(Time)   Time writer asks, "If there's no inflation why are prices going up?" Also wonders how he'll fill up balloons for next birthday party   (business.time.com) divider line 63
    More: Misc, birthday party, Standard Oil, relative term, John D. Rockefeller, local income taxes, commercial real estate, CPI, official statistics  
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4335 clicks; posted to Main » on 13 Mar 2013 at 9:04 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-13 09:06:55 AM
$5 Footlong 2008 = $5
$5 Footlong 2013 = $5*

*the Spicy Italian has gone up to $5.25.

It's like living in the Weimar Republic.
 
2013-03-13 09:07:10 AM
Farts??

That would be fun.

engage.tmgcustommedia.com
 
2013-03-13 09:07:26 AM
But since ink cartridges were already priced way above cost and official statistics show little general inflation, why had ink gone up 25% in less than a year?


My guess - Because people are purchasing now cheaper home laser printers because the only have to replace the ink once in a blue moon and it doesn't evaporate away in 1-2 months even if you don't use it...so the grand collusion behind the printer ink market is trying to maintain the bottom line.
 
2013-03-13 09:08:15 AM
You don't need to look beyond corporate profit sheet to get the answer.
 
2013-03-13 09:08:18 AM
The author was stupid enough to buy an ink jet printer with high cost consumables. Kind of hard to take anything else they have to write about money seriously.
 
2013-03-13 09:09:39 AM
Because the crap people actually buy on a daily basis isn't included in the metric?


I'll eat my chinese TV.
 
2013-03-13 09:10:19 AM
Breaking news: ink jet cartridges are horribly overpriced.
 
2013-03-13 09:10:32 AM
Deflation is more the risk, with things being produced ever more cheaply by machines.  You can run a robot 24/7 and once it's paid off, the rest is gravy.  The days of scarcity are almost behind us.
 
2013-03-13 09:11:25 AM
Fiat currency, how does that work!
i0.kym-cdn.com
 
2013-03-13 09:12:27 AM
If inflation rises, the economy doesn't grow as much.  And by 'economy', I mean 'investments of the hyper-uber-ultra-rich'.

So, we don't have inflation.  Can't have the top tenth of a percent of the top tenth of a percent not earning trillions per quarter, can we?  Why, there'd be nowhere for it to trickle down from!

Instead, we have "inflation".  Basically, this is inflation as calculated by the elite's pet government to exclude, well, anything that goes up in price, really.  See how nice that is?  They get to continue pulling down giga-cash, you get to pay more for everything you can't do without, and since everything else is pegged to "inflation", you don't get a COLA if you're on any kind of benefits, your boss probably doesn't give you a raise, and you get poorer.

Isn't that nice?
 
2013-03-13 09:13:01 AM
I went in to Subway for a $5 foot long.

The choices where a sub with lettuce tomato, cucumbers, and pickles, or a nitrate laden salami sandwich.
or a BLT.

Anthing else that would be deemed palatable or filling was 6.75 and up.


2008 bean burrito at Taco bell.  $.79 .
2012 bean burrito at Taco bell  $1.29

but there is no inflation.  see that's just a greedy corporation that needs to be punished, as they refuse to hire more people than they need to get the job done.
 
2013-03-13 09:16:24 AM
Only price changes in flat screen televisions and plastic trinkets from China count when they figure out inflation levels. You know, the REALLY important stuff. Food, insurance, healthcare and energy are too volatile and, honestly, you don't really NEED that stuff anyways. As long as I can still get cheap electronics and discount clothing made by child slaves in a 3rd world country, it doesn't matter that my food, gas and health insurance costs have gone completely through the roof. I'm just as well off as I was before!
 
2013-03-13 09:18:44 AM
The government cooks the books on the inflation numbers. It chooses what to include and not include in the calculation. There is inflation and it is picking up steam. But the clearly there is nothing to see here people. Move along. Hey did we tell you Obama is going to take away your guns? Oooh! and look over there! Iranians! Noth Koreans with a missle! OOh and over there free candy!... but nothing to see here. No nothing at all...
 
2013-03-13 09:20:50 AM
Thanks Obama

//DNRTFA
 
2013-03-13 09:21:15 AM
Wages need to go up. Then you better get out of the way.
 
2013-03-13 09:21:59 AM

MyKingdomForYourHorse: Fiat currency, how does that work!
[i0.kym-cdn.com image 640x359]


The same way it always has. All currency is, and always has been "fiat" currency. Anything else is "barter".
 
2013-03-13 09:25:42 AM
i999.photobucket.com

Here you go.
 
2013-03-13 09:26:33 AM
 Businesses usually charge one price for everything: Whatever they can get away with.

Inflation is but one factor among many behind the cost of a given product.
 
2013-03-13 09:26:43 AM
Because people don't seem to understand that some jobs should have a maximum wage (hourly/salary). When their pay goes over a certain amount the additional costs are passed onto the consumer. (Which makes people need more money and then they get another raise...which the costs are then passed onto the consumer). It also doesn't help when money is being printed on a 24/7 basis.
 
2013-03-13 09:34:11 AM

ferretman: Because people don't seem to understand that some jobs should have a maximum wage (hourly/salary). When their pay goes over a certain amount the additional costs are passed onto the consumer. (Which makes people need more money and then they get another raise...which the costs are then passed onto the consumer). It also doesn't help when money is being printed on a 24/7 basis.


Yep. It's not the $8 corn, $5 diesel fuel, or the massive drought that's causing price increases at the grocery store, it's because the guy who bags groceries part time makes an extra $.25/hr. because of the the evil government. That makes sense.
 
2013-03-13 09:35:07 AM
Came for a helium shortage reference.  Left dissapointed.
 
2013-03-13 09:41:59 AM

tlenon: The government cooks the books on the inflation numbers. It chooses what to include and not include in the calculation.


This is correct.  Technically.

What is wrong, asinine, retarded, mind-bogglingly stupid and above all else most likely warped by political bias is that inflation is "one thing", generally thought of as "rising prices" (if you're an economist) or "devaluing currency" (if you're a goldbug).  The currency is being devalued, quite deliberately in fact, because otherwise we would hit another deflationary spiral.  If your savings lose value because you've been keeping them in your mattress, that's your own fault for being stupid.  The currency has been devalued almost every year for as long as most Americans have been alive, though good times and bad.  The benefit has been much greater price stability than the wild swings that crippled our ancestors in the days of the gold standard.  Blaming your problems on one of the few things the government does right makes you part of the problem.

But that's not why all prices go up (or down, for that matter).  Oil had a price collapse in the 1990s that will probably never happen again in our lifetimes; since then most of the easily accessible oil fields are in steep decline while international demand is through the roof.  Oil has nowhere to go BUT up.  Healthcare costs and education are rising not because of currency (this is blatantly clear the way both are way, WAY outpacing "inflation" and even interest rates); they're skyrocketing because these industries accumulated staggering political power and can now get away with whatever the hell they want.  Short of the sort of massive overhaul House Republicans, Senate Democrats and Obama worked diligently to prevent, this problem is only going to get worse until it threatens to break the economy's back.  Yes, folks -- the worst problems in America (banks, hospitals, schools) are exacerbated with bipartisan support.  We could stop printing dollars today and prices here would still go up, because fiat currency is not what's driving the price increases here.

TL;DR:  "Inflation" is rising prices, and to some extent that's going to happen because the Fed very slowly and very deliberately causes it to prevent economic collapse.  But the big "ZOMFG" expenses -- health care, education, food, energy -- these have nothing to do with that.  Which is precisely why they are removed from the inflation calculation.  The Fed really only cares about the currency; that's their job.  What said currency can buy is a much more complex equation, and the fact that it affects ordinary Americans is something they couldn't care less about because frankly that's outside the scope of what they do.  If you got a problem with inflation, look at Congress and their inability to rein in the most powerful special interests.
 
2013-03-13 09:45:21 AM

UberDave: so the grand collusion behind the printer ink market is trying to maintain the bottom line.



Join us in our blind ambition.
 
2013-03-13 09:47:11 AM
This reminds me of the old Dilbert cartoon where Dilbert's co-workers are grumbling that the money supply apparently went up that month but their bank accounts had the same balance. Everyone's cost of living is going to be a bit different, depending on what he spends money on. All an economy-wide price index can ever hope to be is an economy-wide average.

If your budget favours computer equipment, your dollar will buy much more of that than it used to. Gas and food, not so much. People just notice (and grumble about) food and energy price increases more because they buy it more often (simply because food rots faster than computers go obsolete).
 
2013-03-13 09:48:04 AM
Here's a metric that blow some posters' minds: Consumer Price Index for All Urban Consumers: All Items (CPIAUCSL)*

*technically doesn't measure inflation.

Here's some more interesting data, gas to oil prices. They have a nonlinear relationship (only a percentage of gas price is depdendant on oil). Basically, gallon gas = (BBL/137 + 1)*LOG10(BBL). Being non-linear, they won't match up without an inflation adjustment. Try getting this to fit with anything other than CPI.

growlersoftware.com

No CPI adjustment.
growlersoftware.com
 
2013-03-13 09:48:53 AM

ferretman: Because people don't seem to understand that some jobs should have a maximum wage (hourly/salary). When their pay goes over a certain amount the additional costs are passed onto the consumer. (Which makes people need more money and then they get another raise...which the costs are then passed onto the consumer). It also doesn't help when money is being printed on a 24/7 basis.


Which totally explains why real wages have plummeted in the last 40 years while inflation has marched ever onwards.
 
2013-03-13 10:03:57 AM

swahnhennessy: ferretman: Because people don't seem to understand that some jobs should have a maximum wage (hourly/salary). When their pay goes over a certain amount the additional costs are passed onto the consumer. (Which makes people need more money and then they get another raise...which the costs are then passed onto the consumer). It also doesn't help when money is being printed on a 24/7 basis.

Which totally explains why real wages have plummeted in the last 40 years while inflation has marched ever onwards.


How much has the population risen in the past 40 years? How many additional jobs have been added in the past 40 years?
 
2013-03-13 10:16:52 AM

ferretman:
How much has the population risen in the past 40 years? How many additional jobs have been added in the past 40 years?


I'm going to say jobs have risen faster than population.
 
2013-03-13 10:20:22 AM

ferretman: swahnhennessy: ferretman: Because people don't seem to understand that some jobs should have a maximum wage (hourly/salary). When their pay goes over a certain amount the additional costs are passed onto the consumer. (Which makes people need more money and then they get another raise...which the costs are then passed onto the consumer). It also doesn't help when money is being printed on a 24/7 basis.

Which totally explains why real wages have plummeted in the last 40 years while inflation has marched ever onwards.

How much has the population risen in the past 40 years? How many additional jobs have been added in the past 40 years?


We shipped a metric farkload of our jobs off to Mexico and China over the past two decades.  But it's been good for shareholders, and that's what America is all about.
 
2013-03-13 10:26:29 AM
MikeyFuccon: All an economy-wide price index can ever hope to be is an economy-wide average.

This.
 
2013-03-13 10:39:41 AM
Because prices of TV's and computer's are dropping, while groceries are going up.
 
2013-03-13 11:06:38 AM

uberaverage: Because prices of TV's and computer's are dropping, while groceries are going up.


Imagine that. It's almost as if different goods in different industries can be affected by what happens in the world in different ways and only zooming in one or two little metrics when trying to make a complex economic point is always going to be doomed to failure....
 
2013-03-13 11:15:14 AM

Necronic: Came for a helium shortage reference.  Left dissapointed.deflated


FTFY
 
2013-03-13 11:25:14 AM

impaler: Here's a metric that blow some posters' minds: Consumer Price Index for All Urban Consumers: All Items (CPIAUCSL)*

*technically doesn't measure inflation.

Here's some more interesting data, gas to oil prices. They have a nonlinear relationship (only a percentage of gas price is depdendant on oil). Basically, gallon gas = (BBL/137 + 1)*LOG10(BBL). Being non-linear, they won't match up without an inflation adjustment. Try getting this to fit with anything other than CPI.

[growlersoftware.com image 680x554]

No CPI adjustment.
[growlersoftware.com image 475x494]


I'm sorry, but my mind isn't feeling blown.  What am I supposed to take from these tables?
 
2013-03-13 11:47:11 AM
Seriously, if you still need an inkjet, buy a Brother. All the other ones gouge you on ink. Brother genuine ink isn't real expensive, but you can also go generic without problems, and the printer won't yell/beep/explode on you. The cartridges are simply a plastic shell that you can even refill with bulk bottles. You can even buy "extended" cartridges that stick out from the front a bit, but would hardly ever need to be refilled. The printers still feel like they are built with some degree of quality too, and really aren't that much more than the $29 HP special. I will never touch an HP/Epson/Cannon ever again.

\Also, people are likely printing less and less now. I mainly just use my printer to print internet coupons. That explains ever-increasing ink costs.
 
2013-03-13 11:48:36 AM
Americans are so in debt, they could use an inflationary wage-price spiral to pay off that house.
 
2013-03-13 11:55:24 AM

Nutsac_Jim: I went in to Subway for a $5 foot long.

The choices where a sub with lettuce tomato, cucumbers, and pickles, or a nitrate laden salami sandwich.
or a BLT.

Anthing else that would be deemed palatable or filling was 6.75 and up.


2008 bean burrito at Taco bell.  $.79 .
2012 bean burrito at Taco bell  $1.29

but there is no inflation.  see that's just a greedy corporation that needs to be punished, as they refuse to hire more people than they need to get the job done.




The CPI most commonly cited is based on a basket of goods, weighted to reflect the purchasing habits of a typical urban family of four. Do you suppose they spend all of their income on Taco Bell junk food?

Many other goods have declined in price in recent years, most notably housing, which represents a substantial portion of the typical urban family income.
 
2013-03-13 11:59:24 AM

Warthog: I'm sorry, but my mind isn't feeling blown.  What am I supposed to take from these tables?


That CPI is a reasonably accurate gauge of inflation.
 
2013-03-13 12:05:06 PM
I always use apple juice,pasta and canned veggies to look at how much my food bill has gone up. Typical sale prices of off brands, I don't buy when not on sale

2000 prices

AJ 99 cents for a half gallon
Pasta 33 cents for a box
Canned Vegs. 33 cents a can

2008 prices

AJ 1.50 for a half gallon
Pasta 50 cents a box
Canned vegs 50 cents a can

2013

AJ 1.99 a bottle (sales less frequent)
Pasta 1.00 a box
canned vegs. 75-80 cents a can (sales less frequent)

Add to that the insane spike in meat and my brain hurts when I food shop.
 
2013-03-13 12:13:22 PM

Incontinent_dog_and_monkey_rodeo: Deflation is more the risk, with things being produced ever more cheaply by machines.  You can run a robot 24/7 and once it's paid off, the rest is gravy.  The days of scarcity are almost behind us.


WOT?
 
2013-03-13 12:13:40 PM

impaler: Warthog: I'm sorry, but my mind isn't feeling blown.  What am I supposed to take from these tables?

That CPI is a reasonably accurate gauge of inflation.


Yes.  CPI works its way into inflation data over time because the pressures of increased fuel costs pressures the shipping, manufacturing, and materials costs of goods, and increased food costs puts pressure specifically on the labor costs used to produce those goods (or materials in the case of foodstuffs).

Chained CPI which throws an additional complexity into calculations, but is more accurate to consumer behavior than just CPI as 5monkeys shows above.  5monkeys is simply not buying apple juice as frequently, choosing another product substitute, or foregoing apple juice altogether.  That's chained CPI.
 
2013-03-13 12:26:26 PM

Rapmaster2000: impaler: Warthog: I'm sorry, but my mind isn't feeling blown.  What am I supposed to take from these tables?

That CPI is a reasonably accurate gauge of inflation.

Yes.  CPI works its way into inflation data over time because the pressures of increased fuel costs pressures the shipping, manufacturing, and materials costs of goods, and increased food costs puts pressure specifically on the labor costs used to produce those goods (or materials in the case of foodstuffs).

Chained CPI which throws an additional complexity into calculations, but is more accurate to consumer behavior than just CPI as 5monkeys shows above.  5monkeys is simply not buying apple juice as frequently, choosing another product substitute, or foregoing apple juice altogether.  That's chained CPI.


When the price gets high enough you go from juice to drink. Grape juice is good for you, grape drink... not so much. And don't get me started on apple drink. That stuff is gross.
 
2013-03-13 12:28:58 PM

spickus: Join us in our blind ambition




Buy yourself a brand-new motor-car...
 
2013-03-13 12:34:16 PM

5monkeys: Rapmaster2000: impaler: Warthog: I'm sorry, but my mind isn't feeling blown.  What am I supposed to take from these tables?

That CPI is a reasonably accurate gauge of inflation.

Yes.  CPI works its way into inflation data over time because the pressures of increased fuel costs pressures the shipping, manufacturing, and materials costs of goods, and increased food costs puts pressure specifically on the labor costs used to produce those goods (or materials in the case of foodstuffs).

Chained CPI which throws an additional complexity into calculations, but is more accurate to consumer behavior than just CPI as 5monkeys shows above.  5monkeys is simply not buying apple juice as frequently, choosing another product substitute, or foregoing apple juice altogether.  That's chained CPI.

When the price gets high enough you go from juice to drink. Grape juice is good for you, grape drink... not so much. And don't get me started on apple drink. That stuff is gross.


I've moved on to Grape Drank.
 
2013-03-13 12:36:51 PM
 
2013-03-13 12:44:40 PM

ptr2void: More hidden inflation: http://consumerist.com/category/grocery-shrink-ray/


I hate that so much. They make it look bigger but it is actually less food. Ice cream makers are now taking away from the bottom of the package. It looks the same, but it isn't a pint or half gallon. I always look at the price per weight when shopping.
 
2013-03-13 01:19:32 PM

The Evil That Lies In The Hearts Of Men: $5 Footlong 2008 = $5
$5 Footlong 2013 = $5*


Except that now the "footlong" is only 11".

That's 9% increase per unit.
 
2013-03-13 01:48:15 PM

UberDave: But since ink cartridges were already priced way above cost and official statistics show little general inflation, why had ink gone up 25% in less than a year?


My guess - Because people are purchasing now cheaper home laser printers because the only have to replace the ink once in a blue moon and it doesn't evaporate away in 1-2 months even if you don't use it...so the grand collusion behind the printer ink market is trying to maintain the bottom line.


Have they fixed that? I haven't had toner in my printer for over a year now. I got sick of buying a cartridge to print something, waiting three weeks between each time I had to print from home, cleaning the print heads with a damp cloth every time, and then throwing the cartridge away a couple of months later after having printed seven sheets with it.
 
2013-03-13 02:28:23 PM

Tommy Moo: Have they fixed that? I haven't had toner in my printer for over a year now. I got sick of buying a cartridge to print something, waiting three weeks between each time I had to print from home, cleaning the print heads with a damp cloth every time, and then throwing the cartridge away a couple of months later after having printed seven sheets with it.


You're mixing terms I think. Clogged cartridges and low print volume was a terrible problem with my inkjet printer.

I've had my Lexmark laser printer for 4 years and have only replaced the original (500sheet) toner once. I print 50-75 pages a month and it's been 100% reliable. Got the unit for under $100 on sale, and the only sacrifice is no color. Best purchase I've ever made...other than my indestructible Linksys WRT54G.
 
2013-03-13 02:35:57 PM
Gold was $930 an ounce when the recession ended, and today it's $1,583. So if you believe in the gold standard, prices have increased 70% in four years - or an annualized rate of 14.2%.


eh, no. If you believe in the gold standard--that gold is or should be the the basis of currency--gold rising in value means that everything else is LESS expensive, not more. He's describing deflation, not inflation. Your gold will buy more goods, just like your dollar, when it goes up, buys more goods. That's not inflation.

Given that basic misunderstanding, it's hard to lament skipping the rest of the article from that point on.
 
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