Ten years from now would you rather a $100 item today cost $87.58 or $139.43?

The US won't exist in ten years if the GOPe blows these for years and continues to turn a blind eye to election fraud.

The cool thing is, those that caused it will be literally eaten once it's all on the table.

I feel like the old man telling "back when I was a kid" stories, way too much these days. But here goes anyway...

I grew up in the 80s and 90s. I can remember being around 10 in 1988 and that was around the time I started being allowed to work for people around the neighborhood doing chores and other labor for a little coin of my own. I might only have made $5 a day, but I can distinctly remember being able to buy a 16oz. glass bottle of Coca Cola and a Butterfinger for well under a dollar after tax. In high school, I could walk to the store during lunch and pick up two pizza pockets, a can of Sprite and a pack of Marlboro reds for five bucks.

Can we go back to that please?

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This is a grossly oversimplified version of macroeconomics. There are hundreds if not thousands of factors that would be in play here.

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But can we agree on two overarching principles:

1. A static supply of currency is deflationary, and
2. An increasing supply of currency is inflationary.

?

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Would you pay $875.80 today for a TV that cost $1000 ten years ago, even in nominal dollars? Therein lies the falsity of inflation calculations.

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That's why I used the Last 10 year Total Factor Productivity numbers. It includes all income from all inputs, not just TVs. The TFP number for all goods the last 10 years is 9.5%. The TV number would be much higher.

The TV number is much higher because once a new TV model comes out the income from the inputs increase because these TV factories are automated and efficiencies are high. Most of the cost is the new tooling cost for the new models.

A currency that gains in value increases the incentive to save. The financial establishment hates the thought of deflation, because it allows people to save their way to prosperity and self-sufficiency, instead of depending on financiers and speculators and risk purveyors to manage their money in an attempt to outrun inflation. The economic spinmeisters will tell you that saving is bad, because we need people to consume, consume, consume, in order to keep our consumption based economy growing. They don't care that it's not sustainable growth and it's not affordable growth and it increases govt dependency. Just spend that paycheck and borrow some too.

There is one real problem with deflation as it pertains to our current economic state. Deflation makes outstanding debt harder to pay back. Those dollars you owe get more valuable over time. Deflation puts the US on a track to widespread defaults, including the US government. Of course the other track, the one we're on right now, is hyperinflation and that's a much more destructive outcome because it burns down the entire economy in a very short time period. That's the one you might need an underground bunker to survive.

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A currency that gains in value increases the incentive to save. The financial establishment hates the thought of deflation, because it allows people to save their way to prosperity and self-sufficiency, instead of depending on financiers and speculators and risk purveyors to manage their money in an attempt to outrun inflation. The economic spinmeisters will tell you that saving is bad, because we need people to consume, consume, consume, in order to keep our consumption based economy growing. They don't care that it's not sustainable growth and it's not affordable growth and it increases govt dependency. Just spend that paycheck and borrow some too.

There is one real problem with deflation as it pertains to our current economic state. Deflation makes outstanding debt harder to pay back. Those dollars you owe get more valuable over time. Deflation puts the US on a track to widespread defaults, including the US government.

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I agree with all of this.

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Of course the other track, the one we're on right now, is hyperinflation

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I disagree. We were on that track but the FR is burning cash right now. Literally taking money out of circulation. When bonds come to maturity on the balance sheet they take the proceeds and figuratively burn it (remove it digitally).

The FR is in a tightening phase right now.

LINK

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But let's make it more interesting. Would you pay $875.80 today for a TV that cost $1000 ten years ago, even in nominal dollars? Therein lies the falsity of inflation calculations.

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Assuming the TV has 10 years worth of tech improvements in it, absolutely

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Oh well. Even the Federal Reserve has their defenders.

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Mortgage holders

Buy the house in today money, pay it back in tomorrow money.

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Assuming the TV has 10 years worth of tech improvements in it, absolutely

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Then you'd be overpaying massively