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sdholloway56
Senior Advisor

inflation?

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15 Replies
sdholloway56
Senior Advisor

Re: inflation?

While it is theoretically possible to produce inflation or even hyperinflation if the NY Fed hires a monkey to sit at a computer 8 hours a day and hold down on the 0 key, I remain a deflationist at heart.

$290K debt per capita globally, which includes undiscovered tribes in Borneo. Non-governmental debt is the larger protion, by far.

The only good argument for inflation- and I won't discount it- is that the consequences of letting a landslide start on that debt mountain are so terrifying that every effort can and will be made to stop it.

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erikjohnson61y
Veteran Advisor

Re: inflation?

It's that Menards permanent 11% Rebate that's keeping things in check.

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erikjohnson61y
Veteran Advisor

Re: inflation?

Seriously though, printing money and handing it out is a form of secret taxation.  Suppose you want to invest in a company that is worth 1 million dollars. The company issues 10,000 shares at $100 each, and you buy 100 shares, so you own 1% of the company. Then, the company issues another 1000 shares to be distributed among all the existing shareholders. You receive 10 more shares “for free” and feel richer.  But, you still own 110/11,000th’s of the company, or 1%.  You haven’t been enriched at all, because your 1100 shares are now worth $9.09 each. Now, think of Dollars as “shares” in the US economy. If you have 10,000 “shares” in the bank and the government issues you 1200 new “shares” that have no backing in a larger economy (the economy is worth the same (or less) than it was before), what do you think happens to the value of your “shares” in the bank?  If you spend your stimulus check, it is the same thing as taking money out of saving and spending it. 

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Hobbyfarmer
Honored Advisor

Re: inflation?

Still seeing farm equipment repair parts showing no signs of stagnation let alone deflation.

Heard New pu' s were getting picked over and not a good selection. 

Stopped in to see for myself... big mistake...been getting new one every year, this year will be no different.

20 minutes later and less money than last two years. Same bells and whistles. Only two left in 300 mi radius .

They had one in wrong color and one other several hrs away. Selection of E85 compliant vehicles is less every year.

We are doing terrible job promoting ethanol.

rickgthf
Senior Advisor

Re: You want to promote ethanol......

You want to promote ethanol?  Then get rid of that 15% oil depletion allowance that has no rational reason to exist.

You want to promote ethanol? Enact a modest carbon tax to help pay for this coronavirus fiasco. 

 You want to promote ethanol?  Every gallon of gasoline produces 20 lbs of carbon dioxide, diesel, 24 lbs.

You want to promote ethanol? Point out that even at our current mediocre technology, only 7.6 lbs of fossil carbon dioxide is produced per gallon of ethanol produced (& distributed).

You want to promote ethanol? Point out that the production of that gallon of ethanol provides the opportunity to sequester an equivalent weight in carbon dixoide.  If that 6.7 lbs of carbon dioxide was sequestered then the fossil carbon cost of ethanol would be (7.6-8.4) or (-) 0.8 lbs per gallon compared to the 20 lbs per gallon of gasoline.

You want to promote ethanol?  Point out that if all the carbon dioxide generated from the fermentation of fuel ethanol was sequestered it would amount to 50 million tons per year.  Corn ethanol has the potential to literally suck carbon dioxide right out of the atmosphere using readily available sunlight while producing  motor fuel.

Hobbyfarmer
Honored Advisor

Re: You want to promote ethanol......

Yea

So?

Preaching to the choir.

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rickgthf
Senior Advisor

Re: I'm not the one who's collecting the corn check off, If I was...

I'm not the one who's collecting the corn checkoff.  If I was, I'd know what to do with it. The problem is, the corn checkoff goes to people who are still under the influence of the Oil lobby.

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BA Deere
Honored Advisor

Re: inflation?

When we give up on the pipe dream of growing our way out of debt, making payments with cheaper dollars is the "plan B".  Might as well go directly to the real deal and give our creditors a haircut, but I suppose that shuts the door on living beyond our means...bye-bye free stuff.   No one wants to be Grinch and tell the kids Santa isn`t real, so we`ll have to exhaust the fruitless exercise in inflation.  

It`s funny though, Winnebago shutdown awhile because of Covid and I thought "The world`s on fire, who the hell is dumb enough to buy a motorhome??  They`re done"  But no, they can`t keep up with demand, overtime, Saturday shift.  And golf carts, there isn`t any new one`s available, sell as soon as they come in.  Boats (best day when you buy one and best day when you get rid of it) people got money for boats and campers and side by sides. 

It goes back to Peter Zeihan and the demographics, the US has a large number of young people in the prime consuming age bracket.  The Baby Boom kept us out of a depression and now the even larger Millennials are bailing us out, making it harder to wrap your head around this economy.

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rickgthf
Senior Advisor

Re: And $1200 stimulus checks and $600 per week unemployment didn't hurt, either.

And those $1200 stimulus checks and $600 per week unemployment checks didn't hurt, either.  Consumer spending was actually up nicely during June and July but you can bet it won't be so good now in Aug.

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