Inflation Around the World

Certainly, inflation rates may be manipulated downward in all countries to hide the inflationary effects of money supply expansion. But comparing nations to one another does give us some idea of which nations have some semblance of price stability.

So, it’s more bad news for Britain and for David Cameron. Not only do we have lower GDP growth than America and higher unemployment, we also have higher inflation. And — if you can believe it — higher than Zimbabwe.

10 thoughts on “Inflation Around the World

  1. I think the biggest problem with Inflation has been caused by unrestrained wage increases, especially in powerful union sectors. Wage increases should be limited to the increase in the cost of living; that is basic food clothing and shelter.

    For example: If your wage is $100,000 and you spend only $10,000 on the basics, and they increase by 10% i.e. to $11,000, your wage only has to be adjusted up $1000 or 1%. When Unions demand 10% increase, the excess investable (Excess used for consumerism on non necessities) goes into excess wage demand inflation.

    Most unions occur in monopoly businesses. So in the end the overpaid unions worker and the monopoly business push these excess costs onto the public (Its a monopoly). If you are a low paid worker, you will see inflation in the goods you purchase from this monopoly, that exceed your wage increase.

    And when most of the unionists are employed in governemnt and are on the teat of a fiat funded government (Bureaucrats), these people use their fiat dollars to bid up the prices of everything. For example: If they went to a bank for a house loan, they would get a lower interest priced loan, and more to bid with, than you would. Why? Stable well pid employment. You end up becoming their tenant!

    So when someone you meet works for the government ask them to shout your lunch or drink at the pub. That will counter the inflation and your lower standard of living.

  2. Maybe not all currencies will go to their intrinsic value over the following years like some say. And even in the context of a global “Currency War” when all countries are forced to devalue in tandem, at least the countries with sound fundamentals will offer higher yields on the deposits in their currencies (as opposed to the countries without sound fundamentals where financial repression will take hold). CAD (& probably AUD) look good to me.

    @Buddy: I think the main cause of inflation right now is the debt overhang in the developed world. And the only solution that does not upset the established economic ideas/systems is a slow (or fast) implosion of the currencies’ values.

      • You are right about supply chain constriction (Weimar Republic) but in this day and age, with Global supply chains inflation is not a problem, except in situations like you mentioned in previous posts about China cutting off exports.

        • It makes a big difference in terms of regular inflation, not just hyperinflation. There are other kinds of “supply chain constriction” beyond just trade wars and trade shutdowns. Every cent spent on oil by China pushes the cost of global oil up for the American consumer. The “constriction” of the supply chain is that the oil goes to China, because they have bought it from under our noses. And energy inflation has a knock on effect throughout the entire economy (what Keynesians call “cost push”).

        • Cost push only applies when the demand from consumers is there. When there is no money, despite how inelastic demand is, demand drops off and rising commodity prices no longer apply.

          Notice how oil skyrocketed when there was a hint of a US recover?

          There will be no hyperinflation. Only if money is printed, like what happened in the Weimar. i.e. no production and international loans given to workers (Bond Purchases and Free Government Money) This is why Hitler complained about international financiers destroying Germany. Striking unionist (Communist) workers paid to strike using international money equals hyperinflation in hard goods. Non unionists not on the government teat saw their savings wiped out. Read Mein Kampf the unedited version, it really does give a new perspective on history and economics. Even Germans don’t know their history because it is taboo. Me, I am free to read everybodies arguments.

        • “There will be no hyperinflation.”

          Depends on what Bernanke says. It seems that everything he says, the opposite happens. Just like how he was clueless at every step of this crisis. First he says that house prices can’t go down across the entire country because history shows no bubbles ever popped (or something). Then he treats a solvency crisis like a liquidity crisis. Then he expects a normal recovery through Keynesian stimulus (which didn’t occur).

          Now I don’t know about the gold standard (I’m talking about Bernanke’s recent disparagement of gold), but while Bernanke was clueless almost at every step and seems to become more confident by the day (just like George Friedman who after getting it so wrong with a book predicting the last 20 years, doubled down with one predicting the next 100), all serious analysts that are more endearing towards gold have gotten it right at almost every step (James Grant, Bill Bonner come to mind).

          I’m watching Bernanke closely on this.

  3. Pingback: Inflation Around the World Read more http azizonomics… « zumoit

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