Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
Gold & Silver Prices in

Economy Haunted by ?Ghost of Inflation Past?

IMG Auteur
 
 
Published : February 12th, 2013
642 words - Reading time : 1 - 2 minutes
( 2 votes, 3/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
FOLLOW : Tragedy
Category : Opinions and Analysis

[Fifty years of inflation has been tough on households, but for millions of college grads unable to find work paying more than $10 an hour, it can be defeating. In the guest essay below, Rick’s Picks forum regular John Skerencack (aka John Jay) explains how an economic tragedy that has trapped young people took shape without anyone much noticing. Until now. RA]

A good way to work a scam is to put a microscope on a short-term trend and pretend it is a reversal of the main trend. “Global Warming,” for example. About 15,000 years ago there was a sheet of ice 5,000 feet thick over New England. As the ice age ended it melted away, and as a result sea levels rose about 390 feet. So you can say with confidence, the long-term trend is melting ice, and rising sea levels. All this happened without any human input at all — a mile of ice melts, sea levels rise 390 feet. Now, in the past 140 years, more ice has melted, and sea levels have risen about a foot.

OMG! Quick, let’s create a global tax expressed through carbon credits to stop it before it gets out of hand and we all drown! Al Gore and the CME have a plan to save us! Cue the one minute chart of sea level rise! You get the picture? There is no new trend of rising sea levels, just the last gasp of the main trend, most likely.

Rising Seas = Inflation

Turning to the “Dismal Science,” the rising sea levels of the past 50 years or so is Inflation. So ceteris paribus, let 50 years be equal to the 15,000 years of melting ice and rising sea levels. For the sake of argument assume the price of everything has gone up 1,000% since 1963. Further assume that wages over the same time have gone up 400% These are very rough numbers, but brevity is essential to keep your attention, and I am excluding government workers who are getting raises unknown in the private sector. And I am assuming the wages are for an average guy or gal, not an MD or physicist. So I won’t even bring up college tuition increases in the past 50 years.

So a young guy or gal in 1963 would be making $5,000 a year and paying $20,000 for a nice house and $2,000 for a nice car. And a postage stamp was 5 cents. I am using $5,000 a year because I remember as a freshman in high school a teacher telling me he was leaving teaching to sell insurance because he could not make it on $5,000 a year. In 2013 a young guy or gal is making $20,000 a year, and a house is $200,000 and a car is $20,000. And a postage stamp is 46 cents. (And no one is quitting a teacher’s job to sell insurance: see “Government Workers” above.)

Wages Failed to Keep Up

Can you see the problem the young people are facing? They are haunted by the “Ghost of Inflation Past” because they are living in an economy ravaged by 50 years of inflation, in an economy of $10 an hour jobs thanks to open borders and off shored jobs. Wages never kept up with inflation in the private sector, not even close. So when Ben says Inflation is contained at 2%, he is pointing to a one-minute chart where gas prices just went down 20 cents gallon.

Don’t believe it. Believe the rattling chains, and chilling moans of the Ghost of Inflation Past!

“Unquestionably, there is progress. The average American now pays twice as much in taxes as he formerly got in wagesH.L. Mencken

***

[Click here for a free trial subscription to Rick’s Picks that includes access to a 24/7 chat room and timely trading touts.]


<< Previous article
Rate : Average note :3 (2 votes)
>> Next article
Rick Ackerman is the editor of Rick’s Picks, a daily trading newsletter and intraday advisory packed with detailed strategies, fresh ideas and plain old horse sense.
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Fed Balance Sheet Unwinding Expected “Relatively Soon”: Let the Deb...
27 JulDoom-1
Also, the poor will be getting a huge shipment of free government cheese, fresh from the moon.
Guess What Happens In States Where Food Stamp Recipients Have To Work
25 JulJ.-1
@ Recusant, Your last sentence hints at the root problem - socialism has made (low wage) work illegal in this country. To provide a low p...
Supply Side Economics – 42 Years Later – Paul Craig Roberts
23 JulDoom-2
Lots and lots of things aren't in wikipedia, because they don't fit the Leftist narrative, and many entries have an extraordinarily biased presenta...
Meow
21 JulDoom0
>>For all his blunders and stumbles...<< To be fair, all presidents blunder and stumble like this. This is just the first in a long while ...
The Gold Industry is in a Deep State of Dysfunction, Delusion and D...
21 Julkevthorne1
Just hold on to it - you will win. A cautionary tale: I wish, back in the early 90's, when I took out a pension - it was "cast iron, copper...
The Gold Industry is in a Deep State of Dysfunction, Delusion and D...
20 JulDRGEORGE
Yep, hard to argue with any of that. But this poor, disillusioned, confused, swindled, isolated, powerless, 'smart'(HUH) precious metal owner has n...
This Feels Like the Action in 2008 Right Before the Collapse - Dave...
18 JulThe Recusant
Will we witness a battle-royale between the CBs and traders shortly?
Guess What Happens In States Where Food Stamp Recipients Have To Work
18 JulThe Recusant0
As a left-leaning independent, community service seems like a great idea as a prerequisite for food stamps for single childless recipients. But, as...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS