oh yeah being able to buy garbage at walmart more then makes up for the price health care and gasoline
The price of milk has gone up because the cost to feed the cows has gone up since congress has mandated that we use 7.5 billion gallons of ethanol a year which drove the price of ethanol up which caused the price of corn to go up which made milk more expensive, not our falling dollar. As for buying a new car 10 years ago it took the average worker 30 weeks to pay for a new car, today its 20. Deflation. The prices of houses in the united states has fallen this year and economics are staying will keep falling until 2009. Deflation. The dollar is at an all time low for a number of reasons, but currency markets overshoot all the time. A couple years ago the dollar was at the all time high. Was it over valued at that time. It looks like it. Is it undervalued now, very likely. The reason oil is at an all time high is largely due to fast money and hedge funds. Traders can buy the right to purchase a barrel of oil for $4 right now and borrow the rest and since the credit market dried up in August and bonds can’t be traded as easily oil has gone up 44% since that time. Your against inflation but the only nature cause other then inflation is deflation. Are you for deflation?
I don't shop at Walmart, and for the record, gas is still cheaper in the US than Europe, so what is your point?
Hmm everything I heard was because of foreign demand for milk products. Even my supplement companies I do business with stated as such. Corn causes milk prices to go up? Here in Wisconsin the farmers grow their own corn
First off the first Gulf War was won by the US. The reason we have been having trouble winning wars isn't because our economy is losing standing but it is because of the Geneva convention which binds are arms in military conflicts while allowing the enemy free reign. You think if we were allowed to carpet bomb cities in Iraq that we would be having an insurgency in Iraq right now. To win a war you need to break the will of the people to fight and you can’t do that if tell the bad guys that your coming to kill them which gives them time to prepare or run away from your attack. Yes American owe $1 trillion dollars in credit card debt but they also own $113 trillion dollars worth in asset which bring a yearly return of about 14%. You have to look at both sides.
Do you think it would be a good idea to 'carpet bomb' Iraq civilian areas? Isn't that similiar reasons the 'reason' for war in Iraq changed to? Saddam being a butcherer and all, not caring about civilian losses. If we would go that far there would be even less of a point for us being there. Yes we could win the war that much quicker, making more hate us, and doing what exactly? Killing tons and tons of people to save them. That's some sound logic.
Corn is feed to the cows, which has gone up in price in the last few years. While farmers in Wisconsin may grow their own corn, they sell it at market prices to dairy farmers.
I'm not saying that it would be good, I'm just respond to the criticism that America can't win a war because of our falling economy.
So you disagree that demand brought prices up? Wisconsin farmers are not the only ones who grow their own BTW.
The Euro was set at a certain rate to enter the market, but it has floated since. In a free float, the Euro is winning. And not just on the exchange markets, Israel recently asked Condi Rice to make sure all foreign aid payments from America were made in Euros, and not US Dollars. It's becoming the reserve currency. Why did the cost of milk inflate before the ethanol mandate? The price of houses has fallen because the credit market has tightened, and there is a glut of houses on the market from mal-investment. It has nothing to do with currency deflation. Same with the car. You have obviously missed the graph I posted earlier in this thread charting the changes in the consumer price index. This is incorrect. The dollar was not at an all time high a couple of years ago. Oil is at a high. Gold is at a high. The Euro is at a high. The Canadian dollar is at rates not seen in 30 years. This is all coincidence right? Inflation is always followed by a period of deflation. It's the old, "what goes up, must come down". Prior to the birth of the Federal Reserve, inflation and deflation occurred rather naturally and frequently, and kept the dollar at a fairly consistent level of purchasing power. There is a significant difference between natural free market corrections, and managed economy forced corrections or "easing". We're now in one of the longest consistent periods of non-stop inflation in US history. This has been seen before, many times in history. Managed economies that go into inflationary spirals typically destroy the currency. That is the position I have taken in this thread. That's how neo-cons think. Carpet bomb everyone who doesn't want to be invaded. Do it with the US taxpayers dollar, and then use the tax payers dollar to award the crony contracts to rebuild that country as a free market bazaar for corporate interests. Then when we're done, subsidize the new country and provide indefinite military presence, again, at the expense of the American Tax Payer. If that isn't global socialism, then I don't know what is.
Sort of, demand for corn has driven corn prices up, which has increased production cost of milk as well as transportation cost to transfer the milk. I disagree with the idea that demand for milk is the driver behind the cost increases.
Yet that is what all my suppliers say, what farmers I know say, what articles I have read said. Feed costs come into play as well of course, but you can't really argue that on a local area where they provide their own feed now can you? Fresh milk is a very local business, the products from milk however and transported all over the world, demand has driven prices up.
Unless the dairy farmer is growing his own corn then yes feed prices are affecting him. I also see your point about demand, and just read an MSNBC report on global demand for milk products and since both are trading on the open markets demand would play a large factor in it.
As I said most farmers in Wisconsin grow their own corn Fresh milk is a very local commodity. Wisconsin has cheese factories, and other production facilities all over the place. It is extremely LOCAL here compared to most areas. Even here prices are effected, because of demand for the product.
There is no deflation. Prices are going up. What you see as deflation is a distortion of the CPI (Consumer Price Index) by the Fed. I was just reading this article about "Inflation Pushes Down the CPI" Over 30% of the weight in the CPI is devoted to rental prices. Ample low-cost mortgage funds have lifted housing prices, but have smothered the housing rental market where bargains are commonplace. Over 30% of the weight in the CPI is devoted to used car prices. Zero percent deals for car sales have kept new car sales on "life support" for so long that easy financing and rosy incentives have become the norm, thus smothering the used car market, and their prices. Credit explosion is directed toward Asian imported products, which has forced a monstrous trade gap, thus enabling a massive Asian industrial expansion, followed by continued flood of low priced goods inside the USA. According to the inflation calculator on http://www.bls.gov/cpi/ a 1998 dollar is worth $1.28 toady. Just go out and try buying something and tell me how much prices have really gone up.
Because the futures market are forward looking, you remove the government mandate for ethanol that reduces the demand for ethanol which would reduce the price of corn which would bring down the cost of feed. Which would reduce the cost of milk. I did look at your graph you posted earlier and it measures Consumer Price Index for all Urban Consumers. In Urban areas the cost of doing business in terms of real estate and taxes are much higher which is then passed on to the consumer in other words its not a true picture of the CPI. Also you talk about inflation a lot but you don’t mention wage growth which has outpaced inflation by 1.2% on an annualized rate since 1950. Yes inflation has gone up but so has wages. In 2002 the one dollar bought 1.61 Canadian dollars, record high. Also in 2002 One Dollar bought 1.13 Euros a near the record of 1.20 reached a year ago. My point is currency overshoot to the upside as they overshoot to the downside and the dollar falling now is just another episode of the currency overshooting. Deflation kills economies. Recessions are manageable but deflation brings on economic depression. The last time the US was in a deflationary period was during the great depression. It kills the banking system which through liquidity is the oil in our economic engine. So no what goes up doesn’t have to come down because deflation is not about going down. Its going backwards.
Watch the show "Good Times" (Jimmie Walker 'Kid Dy-no-mite') to get an idea how bad inflation was back in the 1970s.
But you never answered my question. Why is milk more expensive in dollars today than it was 20 years ago? Or 40 years ago? Or 60 years ago Or 100 years ago? I have to go to sleep, so I'll have to try to remember to reply to the rest of your post tomorrow, but suffice it to say, that if you really think wages have outpaced inflation, you're dreaming. We're going from a manufacturing economy (good jobs, pensions, benefits) to a service economy (lower wages, no pension, no benefits, part time).
This is incorrect, and a simple view held by too many who have been brainwashed by Keynesian economics. Deflation is a normal process in the economy. For every round of inflation, there must be a round of deflation as the market re-adjusts itself, prices adjust to the money supply (ability of consumers to purchase the goods produced) and mal-investment is purged from the system. What you are overlooking is that critical mass deflation is brought on by hyper inflation. The market doesn't cruise along at an even place, and then the next day, the currency debases and the economy collapses. It is a rise and fall effect. I understand that some inflation is normal and necessary. particularly price inflation, which occurs at the intersection of supply and demand. But monetary inflation is more insidious and hidden, it can be used to tweak price inflation and facilitate deficit spending, to keep it rolling onwards, into a bigger and bigger inflationary cycle. And what happens when there is a lot of continuous inflation? The market will adjust and try to bring the economy back into balance. The greater the cumulative inflation, the greater the cumulative deflation. It's very simple friend. The money supply has gone up about 50% in the last 10 years. Economic growth has not. This means that there are more dollars than growth, and that means that each individual dollar purchases less because the supply exceeds the demand. That is currency debasement, and it is a consequence of a managed economy and bad monetary policy. The only way for prices to keep up the value of the individual dollar is to inflate. As prices rise, inflation starts to grow. The faster the FED produces new money, the faster prices rise, and the inflationary spiral has begun. The persons who truly suffer are those on fixed incomes or on wage freezes. With so many manufacturing jobs (which used to be the heart of the middle class) headed overseas, wages are not able to keep up with monetary inflation, and our only choices are to complete the circle by buying everything from cheaper foreign markets, or to fall deeper into debt.
Wages are on their way down. Twenty years ago meat-packing earned $700-$1,000 per week. Today the average wage is $9 per hour. In the industrial Midwest the bad old Rust Belt days of the 1970s are coming back. http://www.chicagotribune.com/business/chi-0601220434jan22,1,6166958.story?page=1