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What to do when inflation hits 30%!

Discussion in 'General Discussion' started by Quigley_Sharps, Jan 31, 2014.

  1. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member


    there is some good info in this article and its what quite a few people all ready know. In Argentina as inflation hits close to 30% folks are spending their savings to avoid it losing value and buying dollars.

    Most are putting it into real estate, food, or transportation.

    One thing I didnt think about is that the bicycle has become a much more common means of Transportation. I think that will happen again. Folks with long commutes are going to change jobs rapidily I think.

    The real question is what happens to the world when the dollar tanks.

    tulianr and Falcon15 like this.
  2. VHestin

    VHestin Farm Chick

    When that happens here, it will get UUUUUUUUUUUUGLY! Those who prepared will be very well off, not just because of the 'damage' being controlled/minimized for them, but they will be able to get great deals on stuff from those who didn't prepare and are now desperate for things they took for granted before. Bartering will make an extreme comeback.
    Yard Dart likes this.
  3. cdnboy66

    cdnboy66 Monkey++

    beans bullets and bandaids.
  4. Falcon15

    Falcon15 Falco Peregrinus

    Real inflation is going up faster than people realize, +5% to 10% increase on nominal consumer goods per year. That is the cost of an item either goes upwards 5-10% or the cost remains the same, but the quantity you get for the money is reduced by 5-10%. Since Obama took office, cereal, for example, has lost 25% of it's volume or increased in price by 25%. Are you making 25% more than you were in 2008?

    The inflation rate is a hotly contested subject among people in the financial "know". The Federal Reserve Bank, which reports on inflation rates and sets the interest rates based on this inflation rate is not reporting the entire story. The Federal Reserve, in their August calculations, stated the annual inflation rate is 1.5% - this number is not accurate. Why? A little history lesson for you:

    Inflation rates are based on Consumer Price Index, or CPI. Two basic types of data are needed to construct the CPI: price data and weighting data. The price data are collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times. The weighting data are estimates of the shares of the different types of expenditure in the total expenditure covered by the index. Now, the Fed, after the "findings" of the Boskin Commission in 1996, does not include energy or food costs in their CPI calculation. Only the Bureau of Labor Statistics (BLS) includes those in their calculation of CPI. Since the BLS numbers are largely overlooked and therefore carry no weight, beyond what your pocket book says, it is discarded. So the Fed sets the interest rates and calculates "accurate" inflation rates. Yeah, and I am the Pope.

    Saying the Fed's inflation rates are spot on and should be a true measure of how we are doing economically is a grossly inaccurate statement, and line of thought.

    The current real inflation is closer to 10%, including food and energy, which the Fed cannot include in their current inflation calculations.

    If calculated accurately, like the inflation rate was calculated in the 1970's, including ONLY food & energy, which by themselves add 7.4% alone to the Fed inflation rate. Add this to the last reported inflation rate by the Fed: 1.5% + 7.4% = 8.9% as of this month.

    We have a real inflation rate higher than any year in the 1970's, except 1974 & 1979. In 1974 the real inflation rate was: 11.3%

    The seventh highest annual inflation rate was registered in 1979 with an inflation rate of 11.22%. 1980 had the sixth highest historical inflation rate on record since 1914, with an annual inflation rate of 13.58%, fifth was 1947 14.65%, fourth was 1920 - 15.90%, third was 1919 - 15.31%, second was 1918 -17.26%, and of course the king of inflationary years was 1917 - 17.80%. When the Fed is reporting accurate inflation calculations, inclusive of food and energy it is only then we should be willing to look at inflation without a jaundiced eye.
  5. VHestin

    VHestin Farm Chick

    That reminds me of the Cost of Living index thing they do for SSI payments. They don't include food or fuel price increases either.
  6. ditch witch

    ditch witch resident bacon hoarder Site Supporter+

    The thing I always remember is feed and hay prices. I can't remember what I paid for a gallon of milk twenty years ago, but I know I was paying $3.25 a bale for good coastal hay, delivered and stacked in our barn back in 1988... now that same bale costs me $11-13 at the feed store. Forget about buying it at the farm, they only sell by the semi load now. Chicken feed that used to run me $7.50 per 50# is now $14.78... or $18 if I get Purina. 50# of rabbit pellets that were $8.50 now come in a 25# bag for the same price.
  7. tulianr

    tulianr Don Quixote de la Monkey

    Animal feed was one of the reasons I decided to move from West Texas. Twelve years ago, I was paying fifty dollars and up for a round bale of fescue (600-800 lbs) when I could get it, and far more when I had to buy other grasses. Square bales of fescue were running seven fifty at the feed store. Over here, in North Carolina, twelve years later, that same round bale of fescue runs me forty five dollars, and square bales are five dollars, delivered from the feed store. You can find both even far cheaper if you shop around a mite, or go to the farm to pick it up. I'm still working on options to lower my feed bills, but just moving to where water was plentiful was a major improvement.
  8. Yard Dart

    Yard Dart Vigilant Monkey..... Moderator Site Supporter++

    One of the first things that the obummer administration did in the first term, was to introduce an altered formula to calculate unemployment and inflation rates...... they have fudged the numbers from day one and into the second term they would hope that by now folks have accepted these fake numbers, to believe his highness is doing a good job....not.
  9. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    Shadow Stats will make you cry when you see year over year actual inflation.
    Falcon15 and Yard Dart like this.
  10. NWPilgrim

    NWPilgrim Monkey++

    Which is one of the reasons it was changed to always be lower. Most govt benefits and wages are indexed to the CPI. Saves a ton of money. And, Treasury can borrow at a low rate that seems in line with artificially low CPI. Lots of reckless backstabbing goodness.
  11. Motomom34

    Motomom34 Moderator Moderator Site Supporter++

    I gauge inflation by the price of ketchup. I know what I used to pay (around $1) and now it is $1.79 for the same bottle.
  12. VHestin

    VHestin Farm Chick

    We just bought a big bottle of ketchup cause it was on sale last month. It will last us quite a while, at least 2 months.
    Motomom34 likes this.
  13. -06

    -06 Monkey+++

    "inflation" is a misnomer. As a kid I paid .05 for a pound Baby Ruth candy bar. Today a 1/4 pound bar will cost you well over a Federal Reserve Note(@ $1.25). That is real inflation. Gub stats only tell us what they want us to believe. VWs used to sell for $12-1,300. What is inflation--when your dollar only buys a small percentage of what it used to. When the gub got into raising the minimum wage they set the pace for a spiraling inflation--and they never have let go of the reigns. The working class has become slaves to the gub monster and it's underlings. Rant off.
    Falcon15 likes this.
  14. NWPilgrim

    NWPilgrim Monkey++

    Back in 1973 you could buy gas for $.32/gal, a new family car was under $2,500 and you could buy an average house for $25,000. Today it is pretty much 10x those amounts for similar items.

    But the income side did not keep up. What was a $20,000 professional salary then is probably only an $80,000 salary now. Cost of goods went up 10x and wages went up only 4x.
    Last edited by a moderator: Feb 2, 2014
    Motomom34 likes this.
  15. Also, 5 pound bags of flour are now 4 pound bags and 2 pounds of coffee is now 29.6 ounces. Not only have the prices gone up quite a bit, but the sizes have gotten a lot smaller too. Another trick that I read was that some European beer (I think Heineken but I'm not sure) is lowering the alcohol content to reduce the cost to produce it. The government also fudges the numbers in technology. If the prices of computers stay the same, but now had a faster CPU or more memory, they consider this deflation.
    Motomom34 likes this.
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