Thanks Tim!

Top notch topic and great uncertainty but a key to our economic future!

Impressive chart at that link gives us some perspective on just how low inflation is historically...........wow!

there has been inflation ever since the federal reserve was created.  

sometimes more , sometimes less.  so yes, inflation will continue.  and i expect it will be even worse in the future.  

sorry to throw cold water on your chart.  any discussion about inflation should take a look at the shadowstats website.   he simply compares our own govts older methods for calculating inflation with the new methods.  

some would say that the govts newer methods are very much distorted.  

or you can always do your own calculation.  for all the things you need to pay for.  how much has "X" gone up compared to your paycheck over the last 20, 30, 40 years?  

(msn and bing are coming from an organization that is more likely to trust our govt bean counters).  

i am more cynical about our govt bean counters.  

after spending some time looking at alternative measures, and doing some of my own calculations,  i have decided that a more accurate number is somewhere between the official (govt) numbers, and the higher shadowstats numbers.  

btw, for example, over the last couple years our local mechanic raised his "shop" rate (how much he charges per hour) by about 30% ... (just one example of a price increase far above the official number of 2% per year).  we'll see how long he waits before it goes up again.  

http://www.shadowstats.com/alternate_data/inflation-charts

"At the start of the pandemic the economy actually experienced price decreases, so the annual increase in prices seen since April is to some extent a catch-up in prices as the economy recovers from the pandemic. "

What I see is that labor is getting an increase large enough to more than equal the extra unemployment rates. The liberals got what they wanted. $15 / hour. Now all those that were making $25 want (need) the same raise.(to keep the same standard of living)  All the time we basically have the same number of widgets

As I recall, the methodology of measuring inflation changed to reflect the advances in technology.  If a toaster or a washing machine lasts 2 times as long as in previous years then a doubling of price actually represents zero inflation for toasters.

So I'm not sure what the value of measuring inflation by old methodologies is worth.

Is there more to it than that?

here is the problem joj,... the toaster or washer does not last twice as long.  

or a different example...

here is an example... (from what i have read)... if a computer cost the same today as what it did a few years ago..., but the amount of computing power has doubled,... then they count it as if the price of the computer went down 50%.  

the problem with this is that the computer for me did NOT go down 50%.  even tho the same amount of computing power now costs less,... i do NOT buy X amount of computing power.  i buy a computer, and the price did NOT go down.  

so , according to the feds, i am paying less for the computer.  but this is total Bee Esss,  i am NOT paying less for the computer.  i could give a couple more examples.

during covid, yes, a few things went down,  but most things that did Not go down at all.  now lots of things are going up.  

Just some examples to add to what bear said

I bought a 2 yr old 2016 pick up with 12 ,000 miles for 22,000.00. That truck now has 30,000 [mostly because of lock down and no place to go] low miles is the result

However, the retail price is much more than 22,000.00 for my 5 yr old truck. New truck starts at 50,000 for same model

We bought a demo buick car for 18,000. Kept it for 10 yrs and sold it for 500.00 cash

New replacement 2016 SUV [granted a more expensive model] cost 41,000 plus 2000.00 plus for taxes, lic, under coating etc

1967 a new combine plus all attachments cost 22,000.00

Today a combine costs 600,000.00.00 plus, a grain header costs 38,000 for used, [we don't use a grain head very much] and a corn head is 100,000 plus

My 1st new 4 row corn planter cost 1750.00 in 1972 or if 24 row was available would be approx 12,000.00

Today a 24 row cost approx 400,000.00

A tractor in 1972 cost me 100.00/H.P

Today you pay 1000.00 plus/H.P

Corn in 1967 was 1.15/bu

2020 was approx 5.50-6.00/bu [low was 5.10/bu]

Today old crop is 9.00/bu plus

New crop is 7.00/bu plus

Our kitchen appliances do NOT last as long today

Our washer and clothes drier do NOT last as long today

All prices are CAD

 Inflation???

I never said that there was no inflation.

But I recall Lee Iacocca putting out the 5 years or 50,000 mile guarantee.  It was considered a break through claim in durability.  Today cars regularly go for 200,000 miles.  The Prius my brother owns which cost $26,000 15 years ago is now at 350,000 miles and running fine.  And at 50 miles to the gallon prices for gas in real terms has gone down for him.

The inflationists have been crying that the sky is falling for over 30 years now.

I'm open minded about the prospect of inflation.  And to be honest, it is the only thing that worries me about providing for my family in the coming years.  My only protection is 20% of my net worth in gold.  Hopefully I'll give the "barbaric relic" to my grandchildren.

Thanks joj,

The best thing that we can always do in life to stay well grounded is to put perspective/consider all options in almost everything we do or think about.

Of course, a key element in effectively applying that is knowing WHAT perspectives are plausible and often, WHO/WHAT the sources are.

I'm glad to consider your perspective because:

a. I hadn't been thinking of it that way

b. It makes total sense.

c. It's coming from a credible source/person

That being said, I(not an expert on inflation) think that we are in big time uncharted territory in several realms that matter. 

In most realms, we can look at AUTHENTIC historical relationships to predict the outcome of whatever it is we are predicting, some with almost absolute confidence but some with less than that. 

For example:

1. Soybean yields/production correlates with weather(and CO2 levels)

2. Plant growth correlates with CO2 levels(this is not a climate change post)

3.  Vaccination % correlates with disease prevalence

4.  Years of education and income levels

5.  High number of jobs and the strength of the economy

6.  Several metrics in the current economy and inflation?

The question mark is there because #6 is NOT  in the same confidence league as #'s 1-5. 

Great points like joj made must be considered that erodes that confidence. There are numerous unpredictable and complicated elements too. If the economy crashes, for instance(not my prediction at all) if will suddenly be a strong offsetting element.  And maybe there is government intervention that has more control than in previous decades?

Regardless, it does seem like the majority of historically important components are lining up for increasing inflation.

What do you guys think  those are?

                Determining correlations            

https://www.marketforum.com/forum/topic/70511/

Inflation is too much money chasing too few goods.    As in most econmics, it simplifies down to supply and demand.

Have we printed too much money?    Sure looks that way.

That makes complete sense Tim!

Scarcity of the goods, independent of the money supply is another factor.

As are energy prices based on scarcity that affects EVERYTHING....or in this case, even carbon taxes and penalties imposed to all fossil fuels that add to that affect.

If fossil fuel production slows down, prices go higher, even if demand stays the same. Fuel costs affect everything.

Even if you have enough supply of other goods, if you tack on 20% to the cost from transportation costs doubling(hypothetical), if crude went from $60 to $150........that would be a big factor too.

And of course energy prices by themselves, independent of this affect are a huge consideration in inflation indices.

If we pay twice as much to fill our cars or to heat our homes for instance.