Originally posted by Winder Show me an industry that is not subsidized or heavily regulated where prices are rising.
Give a scenario where rising prices are good for poor people or people on a fixed income? Are rising food prices good or bad for poor people? Are rising energy prices good or bad for poor people? Are rising housing prices good or bad for poor people?
When new money is injected into the economy by the central bank it doesn't get mailed out to the poor or the middle class. It goes to the big banks and corporations who get access to the money before prices rise. Yes... This money "trickles down", but by the time it trickles down to the middle class prices have already risen to offset the added money into their paycheck. For people at the very bottom prices rise long before any money trickles down to them. Inflationary policies are "trickle down" policies. They are policies that benefit the upper 10% at the expense of the rest.
---------- Post added 12-07-14 at 04:03 PM ----------
Then show me an example of this "fact". IF it is a historical record you should have no problem providing a credible source to link to.
There is a lot of historical data the says the opposite. We have periods of price deflation and rising income.
In the US from 1880 to 1896, the wholesale price level fell by about 30 percent, or by 1.75 percent per year, while real income rose by about 85 percent, or around 5 percent per year.
I suppose your country has an official office for computing statistics. Help yourself and check the indices of price rate. If it is not too badly done, you can check this year, and many years in the past. In my country, they even provide you with long terms statistics.
I live in France... but let look for example US. They provide inflation rate month by month from 1914 to 2014:
Where do we have noticable deflation ?
- moderate deflation rates in 1921, 1922... after few year with huge inflation of prices.
- moderate deflation rate in 1927, 1928. 1929 is like a draw. Huge deflation rate following the crisis in 1930, 1931, 1932, 1933
- moderate deflation rate in 1938.
- moderate deflation rate in 1949 and no a full year with deflation since 1949.
There where economic crisis in 1921-1922 and I think I don't need to recall to your attention the 1929 economic crisis.
Then to be sure, let's check the definition of inflation (here from wikipedia)
"In
economics,
inflation is a sustained increase in the general
price level of goods and services in an
economy over a period of time.
[1]"
For me looking for both the inflation rate history on one side and the definition of inflation on the other side I conclude that there was a continuous sustained increase in the general
price level of goods in the US since 1949... And overall even from 1914 if we take the average... Even through some year had deflation.
So...I don't get you point? You want to deny the observed inflation rate? You want to deny many central bank have and objective to maintain a low but positive inflation rate ?
I mean there was some idea that prices decreased over time for most things... Still there proof it was not the case recently in the US... Was not the case in France neither.
Even through I'am engineer and with quite good salary I saw the price of meat incresing and buy less of it than before. I remember that 17 years one precise house was brought for 200 000€... Now it is estimated 600 000€. Still it is 17 years older. When I was youg a small new car was worth something like 1200€... Now it is 8000€. You'd say the new car is better blablabla... Mostly it is still a car, a little safer... but 6 time more expensive. Does it consume far less gazoline? No. Do we drive significantly faster? Well there lowered speed limit now. No real difference in service, 6 time the price. And where I live the toll to use the highway take 10 cent every years, price of restaurant tend to get easily 1 euro per year for a lunch...
Another story... My grand father paid many year for retirement before the second world war. Something like 10 year of paying a lot from hissalary... It was before social security in France. When he finally retired after 40 years, thoses 10 years, not go from social security... There where not worth anything valuable anymore. he could have buy a flat through a mortage he is placed the money that way... But he saved for retirement and got nothing for 10 years worth of savings.
To me doesn't look like on what I obverse prices decreases. The officials conclude the same...
Don't want to argue more on this. If you want to conclude on general decrease of prices and deny the official statistics or the observations you can make (outside or cameras) that your right. If you want to say you don't like this, that's also your rights... Go to an economical forum to argue that deflation is better than inflation... You may have had times. Anyway, no point wasting more anyone time on Pentax forum on this.