So, Bernanke wants inflation to rise? Give me a break.

[Paper Roses]

As a Senior, living on one SS check a month, things are bad enough. With his hopes for a rise in inflation, this SS check will go even quicker. As it is, I'm sure most SS recipients without other assets are struggling too.

I wish someone would make these DC idiots take a trip to the local grocery store, the fuel delivery service, the utilities companies and all those businesses that provide us with 'paid for by us' goods and services. There is plenty of inflation here. It may not show up in the categories that count as integral parts of their figures but it is sure damn well there.

An addition warning to those of us who are Seniors with Reverse Mortgages(the spawn of Satan), your monthly deduction will go up. We used our principal on the reverse mortgage once to reside the house. The lien on my house, which was mortgage free is now through the roof. Month after month it grows. It is based on Prime. If inflation goes up, so does Prime, therefore, up goes the monthly toll they take from you.

BTW, any of you with Reverse Mortgages know who really owns the Mortgage? I tried to reach the company that holds my RM. Always a machine, never a callback. Makes you wonder.

Hey, uncle Sam, I was informed yesterday that the supplemental policy for Medicare I manage to buy will be going up in cost for 2011. I may have to drop a level of coverage. At an age when things go wrong, it is quite a feeling to have to lower your health care coverage.

And to you, Boehner, a pox on your 'work until you are 70'. I would love to transfer my aches and pains to you and see what you would say then. I, and millions like me worked all our lives, note this: a revelation for you, things wear out. And...where are the jobs we could do anyway. I looked for 2 years after being laid off in 2008. Guess what, no-one wants you if you are anywhere my age. Thanks, you idiot.

Phooey, back to my at home project. Got to do a few things to winterize this place or I'll never make it until spring.
PR

[LiberalLoner]

1. I'm sorry :( I really think a lot of us would be wise to do whatever gardening

we can. I really think we are going to continue to see a resurgence in the popularity of home gardening and canning. I think very wise people right now are storing up rice and beans, spices and vitamins, cooking oils, etc.

Hard times are here already and I have a bad feeling even harder times are still to come.

[LiberalLoner]

2. I just don't understand why those geniuses can't figure out what a dummy like me figured out long

ago - if people don't have any money, they can't spend it. And the economy will founder.

Give people enough money to live on plus a little extra for some fun stuff, and the economy will go gangbusters again.


If even a big dummy like me can figure that out, why can't the genius wall-streeters and economists and politicians?

[BeFree]

5. Write on!

Here's what I figure.... if it wasn't for SS and other government handled money disbursements, we'd be in a deep depression.

The only thing floating the boat is the mass disbursements of cash to the people.

[Hannah Bell]

7. +100.

[elleng]

3. I guess I missed something. Bernanke WANTS inflation to rise?

[BzaDem]

10. Yes. Inflation is at historically low levels, and that is a very bad thing in this economic climate.

Inflation would be the result of people spending money, causing demand and prices to rise. This is required for any economic recovery.

[elleng]

11. My question, about OP: Did Bernanke SAY something about 'wanting' inflation?

[BzaDem]

14. He said inflation is too low (much lower than their target of 2%). n/t

[Better Believe It]

4. According to the government prices haven't gone up for two years in a row!

So Social Security recipients will not be receiving a cost-of-living increase and won't get one until 2012 at the earliest.

There is a proposal for a one-time $250 COLA payment to be voted on by Congress.

It will only be passed by the Senate if they can get 60 votes to defeat Republicans who might pretend to be filibustering it (the dreaded "phantom filibuster") .

[TonyMontana]

6. Anybody who knows ANYTHING about economics agrees with him

Inflation is a sign of a healthy and growing economy. We WANT inflation.

[rucky]

8. Contact an FHA counselor in your area:

http://www.hud.gov/offices/hsg/sfh/hecm/hecmhome.cfm

I thought your balance was tied to the appraised value of your home, not inflation. Not like that's any better right now.

[BzaDem]

9. YES, inflation needs to rise above what it is now. It is essential for any economic recovery.

Inflation in the current situation means prices are going up due to increased demand. Increased demand is absolutely essential to ever have an economic recovery. Furthermore, inflation lowers the real value of debt, which is also essential to the economic recovery.

I'm not talking about abnormally high inflation. But right now, we have extremely low inflation, bordering on deflation (which would be an absolute disaster). We need to have inflation rise back to normal. Assuming inflation does rise back to normal, that would be reflected in the SS check.

[elleng]

13. An increase would be a 'symptom' of recovery, right, not a cause?

[BzaDem]

15. It's complicated, but future expectations of inflation will cause people to spend now

which is a cause (not just a symptom). For example, if Bernanke says that they will make up for lower-than-normal inflation with slightly-higher-than-normal inflation once interest rates go above 0, that will eventually make people think that they should spend now (helping the economy).

[Kurt_and_Hunter]

20. No, a direct CAUSE

[Statistical]

22. Both. Inflation forces companies to act. Inaction is killing the economy right now.

Lets say you are a company and you KNOW that next year a new WIDGET is going to cost 5% more, then 5% more the year after that, and 5% more the year after that.

It would make sense to buy the widget NOW when your money has more buying power right? If you do (and thousand other companies do) then the widget company may need to hire more workers and those workers go out and buy stuff which leads to more workers etc.

Now on the other hand if you KNOW it will be the same price or lower price (deflation) next year you might as well wait right?

Very low inflation <2% historically has flipped into deflation. If you think hiring is anemic now wait until we get into a deflationary cycle.

Most economist would rather see 2%-4% inflation for a couple reasons
a) it is a symptom that economy is improving
b) it takes the risk/fear of deflation away
c) it encourages consumption now (not just for individuals but for companies to) which is a self fulfilling cycle.

[ThomWV]

12. What you are calling Inflation and what he calls inflation are not the same thing

You see inflation as a rise in prices, which is an effect of inflation but its not the inflation he's talking about. What he means is an increase in the money supply, which over time has the effect of increasing prices but they are not the same thing.

[BzaDem]

16. Well, he wants to increase the money supply, but he also wants to specifically raise expectations

of future inflation, so that people spend money now.

[Tierra_y_Libertad]

17. Brilliant! Now all he has to do is convince people without money to buy more expensive stuff.

[pansypoo53219]

18. TECHNICALLY greenspan should have hiked it during georgee, but,

he was trying to pump up gorgee's ANEMIC economy.
and now we are paying for his craptology economic polocies. READ kevin phillips american theocracy. part 1 + 3. ignor part 2.
part 3 is ESSENTIAL READING.

[Kurt_and_Hunter]

19. Bernanke is 100% right

The economic competence of the populace is becoming a serious danger to our nation.

The only thing that can possibly rescue our nation is a rise in the inflation rate, so of course it is denounced as a terrible idea.

And systemic inflation is cited as a particular threat the seniors... seniors who have not gotten a COLA increase in two years even as three key commodities have risen (oil, food, health care) and who would thus be the most direct beneficiaries of an increase in broad CI and thus a COLA increase.

When I read posts like this I realize we truly are doomed... even on DU the 100% mandatory rights answers are met with wholly erroneous "common sense" objections.

[Statistical]

21. If inflation rises then you will get COLA next year.

Of course that doesn't mean you are getting "ahead" either.
Your checks are tied to inflation so regardless of the changing nominal amount every check has the same buying power as the first.

[OHdem10]

23. Here is the truth and the Irony. Bernanke wanted another Stimulus

and so did Geithner.

Congress would not pass a stimulus. So they are forced
to use whatever they can at the Fed. They both have
publicly said Stimulus would be better. Bernanke made
the reccommendation to Congress at the last time he
had to give a Report to Congress. Geithner explained
this on Charley Rose this week.

Of course, the GOP will attack them.

[Statistical]

24. bingo.

fiscal policy would be a "nicer" way to shock the economy into action however monetary policy can do it to.

By forcing inflation the FED can do a couple things.

a) cause a negative real rate of return on treasuries (forcing banks to put money into riskier loans like business loans, consumer loans, etc)
b) force companies to buy expensive capital expenditures now because they will get more expensive in future
c) reduce the true value of national debts (and other debt loads) as inflation favors the debtor
d) cause indirectly a rise in wages which is desperately needed.