{"id":399336,"date":"2019-03-13T17:38:48","date_gmt":"2019-03-13T16:38:48","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/newswire\/the-source-of-killer-inflation\/"},"modified":"2019-03-13T17:38:48","modified_gmt":"2019-03-13T16:38:48","slug":"the-source-of-killer-inflation","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/newswire\/the-source-of-killer-inflation\/","title":{"rendered":"The Source of Killer Inflation"},"content":{"rendered":"
\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

The soaring cost of services is driven by a number of factors.<\/i><\/p>\n

What will the future bring: fire (inflation) or ice (deflation)? The short answer: both, but in very different doses.<\/b>\u00a0Goods that are\u00a0tradeable<\/i>\u00a0and exposed to technologically driven commodification will decline in price (deflation) while\u00a0untradeable\u00a0<\/i>services that are difficult to commoditize will increase in price (inflation), generating a self-reinforcing feedback loop of wage-price inflation.<\/p>\n

Gordon Long and I discuss these trends in our latest program\u00a0The Supply-Demand Services Problem<\/a>\u00a0(YouTube).<\/p>\n

The big difference between goods that drop in price (TVs, etc.) and services that are exploding higher (healthcare, childcare, elderly care, higher education, local taxes and fees, etc.) is the relative size each occupies in the household budget:<\/b>\u00a0a new TV is a couple hundred bucks and a once-every-few-years purchase, while all the services cost thousands of dollars annually\u2013 or even tens of thousands of dollars.<\/p>\n

A new TV or electronic gew-gaw is signal noise in the household budget while services consume the most of what\u2019s left after paying for housing and transport.
\n\"\"<\/a><\/span><\/span>
\nMoney and Work Unchained<\/a><\/span><\/span>
\nCharles Hugh Smith<\/span>
\nBest Price: <\/span>$14.48<\/span><\/span>
\nBuy New <\/span>$14.54<\/span><\/span>
\n(as of 11:10 EDT – Details<\/span>)<\/span><\/span>
\n<\/a><\/span>
\n<\/span><\/p>\n

A 10% decline in the cost of a new TV is $25, while a 10% increase in annual tuition and college fees is $2,500.<\/b>\u00a0Add in thousands more for childcare, elderly care, local taxes and fees and healthcare, and the deflationary impact of tradeable goods is trivial compared to the increases in untradeable services.<\/p>\n

Not all goods are declining in sticker price.<\/b>\u00a0vehicles are rising sharply in price, a fact that\u2019s erased by\u00a0hedonic adjustments<\/i>\u00a0in official inflation (the new car is supposedly so much…<\/p>\n<\/div>\n

Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The soaring cost of services is driven by a number of factors. What will the future bring: fire (inflation) or ice (deflation)? The short answer: both, but in very different doses.\u00a0Goods that are\u00a0tradeable\u00a0and exposed to technologically driven commodification will decline in price (deflation) while\u00a0untradeable\u00a0services that are difficult to commoditize will increase in price (inflation), generating […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[519],"tags":[],"class_list":{"0":"post-399336","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-newswire"},"_links":{"self":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/399336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=399336"}],"version-history":[{"count":0,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/399336\/revisions"}],"wp:attachment":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=399336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=399336"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=399336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}