Do We have Stagflation

I went to Wikipedia to look up Stagflation because it seemed to me that inflation combined with very low to no growth may be stagflation.

Wikipedia Stagflation Link

I see that we have possibly several of the causes of stagflation in play. Expansion of the money supply and unfavorable supply shock. I don't track money supply but if I recall, there has been a lot of talk here about money expanding. And most certainly we have unfavorable supply shock from Oil prices.

And I understand the fed is now in a bind. Do they cut rates to stimulate the economy and do we stimulate when prices are already "too high"? Wont greater demand send them higher and send hoards of angry voters into the streets demanding prices fall not rise?

It's not a trading post, I know, which is why I labeled it off topic. I haven't been trading but I'm working on some back-testing of possible trading systems. I can always hope to find the holy grail!

Supply shock inflation could be a different bird than in the past. Our economy isn't too hot and there aren't yet inflationary expectations. Furthermore, it's clear that we have asset DEFLATION. The market and real estate are well down from a year ago. How does that compare to oil in the grand scheme of the economy? Major offset. "Inflation" isn't a worry for us until the economy heats up. Then we got trouble with a capital T and that rhymes with eminime, right here on T-T.

'... and there aren't yet inflationary expectations.

Well, there SHOULD be.

Lots of Talking Heads keep saying, "there's no inflation".. "inflation expectations are low", etc. I see that as the usual spin and poppycock to deflect us away from the facts. Prices are up a LOT... on most things... but the Gummint tells us "that's not inflation because it's not in wages".

And though the housing market and our excessive debt have deflationary implications, I believe there will be BIG inflation because the Fed is going to pump the money ever more excessively to try to overcome those deflationary forces.

And the money supply... it's racing ahead like it's on steriods. And if someone can explain how we can have money supply increasing 15-20% or more and have it NOT be inflationary, I'll listen.

http://www.nowandfut.../key_stats.html

So, do we have "stagflation". Of course. It's so obvious, I don't see how it can reasonably be questioned.

I went to Wikipedia to look up Stagflation because it seemed to me that inflation combined with very low to no growth may be stagflation.

Wikipedia Stagflation Link

I see that we have possibly several of the causes of stagflation in play. Expansion of the money supply and unfavorable supply shock. I don't track money supply but if I recall, there has been a lot of talk here about money expanding. And most certainly we have unfavorable supply shock from Oil prices.

And I understand the fed is now in a bind. Do they cut rates to stimulate the economy and do we stimulate when prices are already "too high"? Wont greater demand send them higher and send hoards of angry voters into the streets demanding prices fall not rise?

It's not a trading post, I know, which is why I labeled it off topic. I haven't been trading but I'm working on some back-testing of possible trading systems. I can always hope to find the holy grail!

if you go back to my posts in mid dec I HAD SAID THE WORD FOR 2008 WOULD STAGFLATION

Supply shock inflation could be a different bird than in the past. Our economy isn't too hot and there aren't yet inflationary expectations.

Furthermore, it's clear that we have asset DEFLATION. The market and real estate are well down from a year ago. How does that compare to oil in the grand scheme of the economy? Major offset.

"Inflation" isn't a worry for us until the economy heats up. Then we got trouble with a capital T and that rhymes with eminime, right here on T-T.

Again, I had to resort to dictionary.com. to decipher a workd used by a poster on FF. The second time in a week!

Semi had tocophony but, it turned out he was halucinating on Mexican tacos and actually ment cacophony.

By the way Semi, I've always prided myself in having a rather large vocabulary but, I had to go to dictionary.com when I saw "tocophony."
I could not find the word. The closest I found was "tocophobia":

Main Entry: tocophobia
Part of Speech: n
Definition: a fear of childbirth
Etymology: Greek tokos 'childbirth'

I'm going to stick my neck out here and assume you are not implying that you see a lot of fear of childbirth in the posts on the board so, I was wondering if you could either define it for me or use a different word for what you were trying to say there.



SemiBizz

Find Member's Posts Apr 26 2008, 01:10 PM Post #3


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Oops... must have had mexican food on the brain...

I meant to type cacophony...

ca·coph·o·ny // əni/</FONT> Pronunciation Key - Show Spelled Pronunciation</SPAN>[kuh-kof-uh-nee] Pronunciation Key - Show IPA Pronunciation </SPAN>–noun, plural -nies. 1.harsh discordance of sound; dissonance: a cacophony of hoots, cackles, and wails. 2.a discordant and meaningless mixture of sounds: the cacophony produced by city traffic at midday. 3.Music. frequent use of discords of a harshness and relationship difficult to understand.

This time, it was "eminime."

I didn't find the word, what I did find I won't post here.

What is "eminime"?

Anyway, I would like to see an updated chart with the current "inflations" gauge, compared against the criteria that was used until apprx. ten years ago when they re-adjusted it with the result being inflation looking more benign and people on fixed incomes (social security, inflations based pensions, etc.) getting less. I saw a chart a year or so ago. I might look around and see if there is one that is more current.

This time, it was "eminime."

I didn't find the word, what I did find I won't post here.

What is "eminime"?

Anyway, I would like to see an updated chart with the current "inflations" gauge, compared against the criteria that was used until apprx. ten years ago when they re-adjusted it with the result being inflation looking more benign and people on fixed incomes (social security, inflations based pensions, etc.) getting less. I saw a chart a year or so ago. I might look around and see if there is one that is more current.

That's teaparty. I was just looking for something to rhyme with "T"

As I said, it's largely irrelevant to us as traders until things are firm enough for the Fed to attack inflation. So, where's the money go?

Some of it is going into commods. That is masking the deflation, I think. The saner money is flowing back into stocks and there's much more yet to go, I'll warrant. That'll stop fast when rates rise, but when rates rise, the buck will bounce hard, so we'll export some of our inflation, too.

Mark