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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (322579)	1/23/2007 8:43:14 PM
From: TimF	Read Replies (1) \| Respond to of 1574718

I still don't know why inflation isn't through the roof, though. 1 - Cheap imports. 2 - Oil and housing prices have come down. 3 - Only moderate wage increases. 4 - While the trade and government deficits are large even compared to the economy they are not "mind-boggling" or "gi-mongous" by that standard. The government deficit is no larger than that of many other countries as a percentage of GDP. The trade deficit is larger then most even by that method (in straight dollars its by far the biggest), but actually helps keep prices down.

To: Tenchusatsu who wrote (322579)	1/23/2007 8:44:09 PM
From: combjelly	Respond to of 1574718

"I still don't know why inflation isn't through the roof, though." Because, so far, we have found buyers for our bonds. When we can't do that any more, even at rates that choke off business bonds, then they have to roll the presses. And then inflation takes off. And businesses start failing, driving up unemployment, etc, etc. At least that is the way it played out last time.

To: Tenchusatsu who wrote (322579)	1/24/2007 7:18:39 AM
From: Road Walker	Respond to of 1574718

re: I still don't know why inflation isn't through the roof, though. I thought we'd see a lot way back in 2001. Six years later and it hasn't materialized. Color me puzzled. I (and a lot of economists) believe it is under-reported. It seems to me there has been deflation in a lot of discretionary consumer goods where manufacturing has been outsourced. But a lot of necessary items like rent, gas, cars, insurance, even a parking place have increased a lot over that time frame. That may also explain the disconnect between the disgruntled lower paid workers and the satisfied higher paid workers. When the staples made up 95% of your income in 2001 that inflation can tip you towards homelessness. For the higher paid workers, if 25% of spending is discretionary goods, then things look a lot better. "Hey, I can get a 50" flat panel TV this year for what I paid for a 42" last year; what's not to like!".