Just so no question of graph bias for ending where it did, 2009-2014 adj. CPI-U still avg 2.08% annually. Over ten years, would be ~23% inflation, which is pretty reasonable looking at the past. I'm sure I'm not understanding how inflation works after seeing lack of effect on CPI from QE. I always figured CPI was tied to M2 and that CPI growth lagged a bit behind M2, but doesn't seem to be the case or we're on the verge of hyperinflation, but I'm not sure how long I can buy "we're on the verge of hyperinflation" without seeing it.
At the grocery store, beef & pork's prohibitively expensive, but it doesn't really translate elsewhere from my unscientific observations. Looks in line with BLS CPI-U numbers. Milk, grain, and soy products are all still reasonably priced. Chicken a bit high, but reasonable. Rice and potatoes still about as cheap as topsoil. Fruits haven't exploded in price, but are somewhat expensive-seeming. Packaged foods and restaurants have become terribly expensive, but "real food" hasn't exploded in price even though rented acreage out for farming here at near-record prices. High prices for pre-made food maybe a result of skyrocketing minimum wages throughout the states, where farms don't necessarily need to pay it.
(Bold) That's not the case. According to monetary equation M*V=P*Q, the price level P is one of four variables, so it doesn't make any sense to imply it correlates only with money quantity M.At the grocery store, beef & pork's prohibitively expensive, but it doesn't really translate elsewhere from my unscientific observations. Looks in line with BLS CPI-U numbers. Milk, grain, and soy products are all still reasonably priced. Chicken a bit high, but reasonable. Rice and potatoes still about as cheap as topsoil. Fruits haven't exploded in price, but are somewhat expensive-seeming. Packaged foods and restaurants have become terribly expensive, but "real food" hasn't exploded in price even though rented acreage out for farming here at near-record prices. High prices for pre-made food maybe a result of skyrocketing minimum wages throughout the states, where farms don't necessarily need to pay it.
On the left side of the equation there's a very volatile variable called money velocity (V), that also greatly influences price level.
I'm not calling this equation as the only true, but even this one doesn't let you equate monetary inflation with price inflation.
Otherwise phrased, if M increases dramatically while V is low, isn't "realized inflation" (or P*Q) severely understated and demanding a harsh, "multiplied" correction when V picks up to pre-'08 levels?
Was also wondering what the implications of another HELOC/mortgage crisis within the next two years would bring. US banks are beefing up their reserves across the board in preparation. When a large portion of those reserves are wiped by forgiving debt, what is the inflationary impact of that, if any? Does it effectively become a deflationary force since money which the end-user doesn't have is basically erased, but which only existed from QE/TARP/etc and was ultra-low-velocity "money"? It's almost like a correction for systemic bad lending practices, isn't it? Nobody really wins or loses since banks were only artificially being allowed to limp on with ultra-low interest rates and intentionally bad Fed purchases, anyway. Those presumptions and assumptions off-base?
