#348208 - 20/10/2011 18:08
Re: Home refinancing, appraisals, and repairs
[Re: tonyc]
|
old hand
Registered: 15/02/2002
Posts: 1049
|
Tony, I don't get to the BBS as often as I would like these days.
I think what you're saying is that you don't see evidence of rapidly rising prices. But rising prices are not, technically, inflation, but rather are the result of inflation. "Inflation" is precisely the increase in the amount of money in circulation. Nothing more. Eventually, goods will exchange for more of this money, because there is more money for the same amount of goods. If we all decided to add a zero to our federal reserve notes, the money in circulation, measured in dollars, would increase 10x, but nothing else would have changed, so prices would immediately rise 10x. In "real" terms, nothing would have happened.
But this is not what happens when central banks "add liquidity" (inflate). In my silly example, everyone equally participated in the money devaluation. The problem with inflationary monetary policy is that the money enters the economy from a few participants (bailed out corporations or the government agencies spending the new money), thus allowing them to unfairly purchase goods (labor, debt, whatever) at the old prices. This is a great scam for the recipients of the new money, at the expense of everyone else. Eventually the new money makes its way through the economy and prices stabilize. Those who save money in reserve notes or treasury bills are harmed the most because their notes do not magically add zeros -- they are just worth less in real terms.
We know that over $2T has been added to the supply of dollars in the last 3 years, and it appears that the Fed may have lent as much as $15T it does not have in reserve to (mostly) European banks. This is the inflation; the rising prices come (inevitably) later.
But prices *are* rising. Food, gas, clothing and most hard commodities are up around 50% over that 3-year period. The CPI doesn't consider these prices because they are "too volitile", which really just means they respond the most quickly to changing money supply.
The best part of the hedge I mentioned, however, is you can make a free 5% whether prices rise or not. If they do, then you come out better, but even if the dollar doesn't continue to lose value you still make money from the interest-rate spread.
Jim
|
Top
|
|
|
|
Home refinancing, appraisals, and repairs
|
tonyc
|
07/10/2011 00:11
|
Re: Home refinancing, appraisals, and repairs
|
msaeger
|
07/10/2011 00:22
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
07/10/2011 00:41
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
07/10/2011 01:26
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
07/10/2011 01:49
|
Re: Home refinancing, appraisals, and repairs
|
Dignan
|
07/10/2011 03:41
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
07/10/2011 12:50
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
07/10/2011 11:34
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
07/10/2011 12:40
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
20/10/2011 18:08
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
20/10/2011 18:57
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
20/10/2011 20:06
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
21/10/2011 00:16
|
Re: Home refinancing, appraisals, and repairs
|
tanstaafl.
|
21/10/2011 00:42
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
21/10/2011 19:14
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
21/10/2011 19:40
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
22/10/2011 03:27
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
22/10/2011 17:17
|
Re: Home refinancing, appraisals, and repairs
|
tanstaafl.
|
22/10/2011 21:48
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
22/10/2011 23:07
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
25/10/2011 17:35
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
25/10/2011 18:42
|
Re: Home refinancing, appraisals, and repairs
|
wfaulk
|
25/10/2011 19:07
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
25/10/2011 19:24
|
Re: Home refinancing, appraisals, and repairs
|
wfaulk
|
25/10/2011 19:31
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
25/10/2011 20:47
|
Re: Home refinancing, appraisals, and repairs
|
tanstaafl.
|
25/10/2011 20:49
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
02/11/2011 18:51
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
02/11/2011 18:58
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
02/11/2011 21:08
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
03/11/2011 03:19
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
02/11/2011 21:08
|
Re: Home refinancing, appraisals, and repairs
|
peter
|
03/11/2011 07:36
|
Re: Home refinancing, appraisals, and repairs
|
tanstaafl.
|
03/11/2011 11:21
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
03/11/2011 11:47
|
Re: Home refinancing, appraisals, and repairs
|
peter
|
03/11/2011 11:51
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
03/11/2011 11:57
|
Re: Home refinancing, appraisals, and repairs
|
mlord
|
03/11/2011 11:49
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
03/11/2011 11:54
|
Re: Home refinancing, appraisals, and repairs
|
mlord
|
22/10/2011 01:46
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
22/10/2011 03:29
|
Re: Home refinancing, appraisals, and repairs
|
tanstaafl.
|
20/10/2011 20:15
|
Re: Home refinancing, appraisals, and repairs
|
TigerJimmy
|
20/10/2011 20:26
|
Re: Home refinancing, appraisals, and repairs
|
canuckInOR
|
07/10/2011 14:30
|
Re: Home refinancing, appraisals, and repairs
|
Dignan
|
07/10/2011 14:33
|
Re: Home refinancing, appraisals, and repairs
|
canuckInOR
|
07/10/2011 18:53
|
Re: Home refinancing, appraisals, and repairs
|
Dignan
|
07/10/2011 21:21
|
Re: Home refinancing, appraisals, and repairs
|
gbeer
|
07/10/2011 21:29
|
Re: Home refinancing, appraisals, and repairs
|
gbeer
|
07/10/2011 21:26
|
Re: Home refinancing, appraisals, and repairs
|
g_attrill
|
07/10/2011 11:06
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
07/10/2011 12:56
|
Re: Home refinancing, appraisals, and repairs
|
Tim
|
07/10/2011 13:55
|
Re: Home refinancing, appraisals, and repairs
|
DWallach
|
07/10/2011 14:05
|
Re: Home refinancing, appraisals, and repairs
|
wfaulk
|
07/10/2011 16:40
|
Re: Home refinancing, appraisals, and repairs
|
tonyc
|
07/10/2011 16:54
|
Re: Home refinancing, appraisals, and repairs
|
wfaulk
|
07/10/2011 17:17
|
|
|
|