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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (39761)	8/31/2005 12:18:15 AM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 306849

well the BA union is advising a strike tonight. I have thought all along for real rate increases we needed wage increases for real inflation to show up. Now they are here.

To: Jim McMannis who wrote (39761)	8/31/2005 12:25:09 AM
From: John Vosilla	Read Replies (2) \| Respond to of 306849

Jim Rogers would agree... Why has Mish has been quiet tonight on his deflation rants?

To: Jim McMannis who wrote (39761)	8/31/2005 12:31:40 AM
From: CalculatedRisk	Respond to of 306849

I'm amazed people are so focused on inflation vs. deflation. Right now we have inflation. And the future depends on what the FED does. I doubt we will see hyperinflation in the future ... that is one of best understood Macroeconomic phenomenon. The FED would have to go brain dead to go down that path. Of course some people argue the FED is already brain dead<G>, but we still don't have hyperinflation. Is rising gas prices inflation? Of course. But will they lead to a spiral of inflation (i.e. are they inflationary) - that is a little harder to tell, but I don't think so. If companies can pass the gas prices on to their customers, and wage earners can demand higher wages to compensate for the higher gas prices ... then by definition the gas price increase was inflationary. BUT, if companies cannot pass the price on, or wage earners cannot demand enough to cover the price increase, then the price hike is not inflationary (by definition). I think the 2nd result is more likely. If companies start exhibiting pricing power and real wages start increasing (they have been flat for 4+ years) then the gas increase was inflationary.