No serious budget cutting will take place unless entitlement programs are put on the table...No wait, entitlement programs ARE the table!

The Economist

 

Add together Medicare, Medicaid, Social Security and Net Interest and you see our problem.

In one photo we can see the "problem" in manufacturing in the US...Output is up but employment is down in that sector...

This is a photo that accompanies an article about a Hyundai plant in Alabama.  In the battle for the "soul" of manufacturing, it seems technology has won---At least in the auto industry.  I can spot only one worker! The graph below shows that while manufacturing output is increasing, employment in manufacturing is declining.  Not enough attention is paid to this issue.  How much of the manufacturing job loss is for this reason and not off-shoring? Is it much different for a person to lose a job to a machine than to some "foreign worker"? On the one hand we want to tax/punish businesses for sending production line jobs overseas but, on the other hand, we give tax CREDITS to domestic businesses to purchase technology that will, well, eliminate jobs on the production line...Hmm...That is two postings from me today on Irony...

Source NY TIMES



Do you think gas prices are high? Nice graphic showing what other rich countries pay for gas...

This graphic shows the difference in gasoline prices among various "rich" countries. It is measured in dollars per litre. One litre is a little more than 1/4 of a gallon, hence there are a little less than 4 litres in a gallon.  Ignore the actual scale.  It is only important to look at the US cost of gasoline on the bar graph RELATIVE to the other countries.   Look at the bars. The gray-ish part of the bar represents the amount of the tax as a proportion of the price of gasoline. I am assuming the lighter blue bar represents the actual cost of gasoline.Notice the blue bars are mostly the same length, which means in most places the actual cost of gasoline is about the same.  The big difference in the total price is the tax that is levied.   Gas in the US is taxed at a much lower rate.  Gas is taxed at the state level and the Federal level in the US. The Federal portion is $18.4 cents and the State (Texas) is $.20 cents.  Some States it is less, most it is more.  So Texans pay $38.4 cents for every gallon pumped.  Are you surprised how much other countries pay in gas taxes?  It make the price very expensive in many European countries.  Why do you suppose that is so?  Good answers earn extra credit!!

The Federal Budget buy the numbers....and what does a Trillion Dollars look like??

 



WSJ

 The number "trillions" is the new norm. Whether it is revenues, spending or worse--budget deficits.  The graphic below represents ONE Trillion dollars ($1,000,000,000,000)  in $10,000 bundles each containing one hundred $100 dollar bills. This years budget deficit is projected to be $1.1 Trillion (probably going to be much more). Notice the average size man in the lower left hand corner.

Source HERE

I guess it makes sense...They have so many pieces of green paper with several presidents pictures on them, who better to make the statues?

At Smithsonian, Americana 'Made in China'

Tens of millions flock to the Smithsonian museums in Washington each year to see Americana -- everything from Abraham Lincoln's top hat to Archie Bunker's chair.

Take the miniature sculptures of presidents sold at the National Museum of American History, located right on the Mall in the nation's capital.

From the busts of George Washington to Barack Obama, they were made in China.

Last month Sen. Bernie Sanders, I-VT, was so outraged by the situation that he fired off a letter demanding that the museum sell products made in the USA.

We have our own bonds of oppression that we need to break...

Pres. Clinton makes the right call on Ethanol, but does it get him in trouble with Mrs Clinton???

President Clinton makes a statement that, I assume, is none too pleasing to corn farmers and the ethanol lobby.  Considering the road to the White House starts in Iowa, a major corn growing state, I wonder if he cleared this through Mrs. Clinton or gave much thought to her future political career...Guessin' not...However, it IS encouraging to see a politician come out against this awful policy (although it was lukewarm).  When you don't have much at stake, it is much easier to be honest, I suppose.

Clinton: Too Much Ethanol Could Lead to Food Riots

Former President Bill Clinton on Thursday warned farmers that using too much corn for ethanol fuel could lead to higher food prices and riots in poor countries.


Clinton told farmers and Agriculture Department employees that he believes producing biofuels such as corn-based ethanol is important for reducing U.S. dependence on foreign oil. But, he said, farmers should look beyond domestic production and consider the needs of developing countries.


"We know that the way we produce and consume energy has to change, yet for farmers there are no simple answers," he said. "There is a way for us to do this and to do it right."

Clinton's foundation has worked to develop agribusiness in African countries such as Malawi and Rwanda. He said the United States needs to look at the long term, global effects of its farm policy.


"I think the best thing to say is we have to become energy independent, but we don't want to do it at the cost of food riots," Clinton said.

Vinyl records making a comeback! Can 8-Track Tapes be far behind??

Can 8-Track Tapes be far behind? Some things just need to remain Creatively Destroyed...The first 8-Tracks I bought were Kiss Live and Peter Frampton Live...So long ago...

Vinyl records spin back into vogue

According to recent Nielsen SoundScan numbers, vinyl was the fastest-growing musical format in 2010, with 2.8 million units sold, the format's best year since SoundScan began tracking sales in 1991.

Vinyl's increase in popularity is providing a beacon of hope for independent record stores — an industry that has suffered with the increase of digital downloads this past decade.

When Cretsinger moved his business from Keiser, Ore., to Cedar City in 2000 there were two other record stores in the college town of about 28,000. Now, the closest independent record store is in Las Vegas, 175 miles away.

"Vinyl seems to be the light at the end of the tunnel for those of us who have hung in there," he says. "It's kind of a surprising light at the end of the tunnel. It's incredibly exciting."

Not only have vinyl album sales picked up, but the interest in record players has increased as well. Cretsinger said he got tired of directing his customers to other businesses where they could purchase turntables, so he began offering a small selection at his store in January.

The United Nations should NOT have voted to impose sanctions on Libya until...

...they vote to kick Libya off the UN HUMAN RIGHTS COUNCIL FIRST!!  Who thought THIS was a good idea in the first place? So much for trying to create kinder, gentler, dictators by being more inclusive in hopes they will change. Nice job, UN. Please save your outrage and condemnations for a time AFTER you clean up your own house. Thank you in advance for doing so...

Here is list of the other members of the Human Rights Council.  Any of the other names sound familiar and have been in the news lately? Why do you think they WANT to be on the Human Rights Committee?  Foxes guarding the henhouse?

Angola Argentina

Bahrain
Bangladesh
Belgium
Brazil
Burkina Faso
Cameroon
Chile
China
Cuba
Djibouti
Ecuador
France
Gabon
Ghana
Guatemala
Hungary
Japan
Jordan
Kyrgyzstan
Libyan Arab Jamahiriya
Malaysia
Mauritania
Mauritius
Mexico
Nigeria
Norway
Pakistan
Poland
Qatar
Republic of Korea
Republic of Moldova
Russian Federation
Saudi Arabia
Senegal
Slovakia
Spain
Switzerland
Thailand
Uganda
Ukraine
United Kingdom of Great Britain and Northern Ireland
United States of America
Uruguay
Zambia

Warning: Economics Humor involving the Phillips Curve is enclosed---It is funny...it REALLY is!!

The Phillips Curve is a Macroeconomic model that illustrates the trade-off between Inflation and Unemployment that occurs as Aggregate Demand increases or decreases along the Short-Run Aggregate Supply Curve.  In AP Macro, we show the trade-off results in an inverse relationship between the two varibles.  Japan, with its never-ending  bout with deflation, appears to be an exception to the rule.  It is just a coincidence, but the graph matches the shape of the country.  This is funny to economists---it really is!  :)

Japan's Phillips Curve Looks Like Japan

This is what a traditional Phillips Curve looks like...NOW do you get the joke??? :)

Look at US Exports to China! Looks like Pres Obama is going to achieve the goal of doubling US exports. The sooner the better.

And why not? This is good for the US.  A nice trend in US exports to China.  As China develops a middle class they will seek more US goods and services.  Some people see low wage jobs and low-skilled production going to China as a bad thing.  I see low wage jobs for no-wage people as a way to develop and move up the economic ladder so they can buy goods produced by high-skilled, high wage US workers. Seems like a good trade-off to me.  It is not something that happens overnight, but by the trend line you see here, it happens none-the-less. 

Source: Business Insider

The Information Age Revolution in the Middle East could NOT have happened without the Information Age Revolution in the Middle Ages--- GREAT map showing why....

 (HT: Carpe Diem)...As we marvel at how the viral spread of social media, driven by internet technology, has spurred revolution in the Middle East, perhaps we should pay hommage to the original viral information age---the Middle Ages and the invention of the printing press...Graph below shows the "viral spread" of the printing press in a relatively short period of time, 50 years (well, a short time in the 1400's!!)...Amazing...



Source: This STUDY HERE
It is a VERY short analysis that is very informative

The Price of Labor is less than the Price of Capital...Nothing can go wrong in this picture...



Workers checked electric wires above an intercity high-speed railway in China's Jiangxi Province. NYTIMES photo



Prison Economics: Money can be whatever Prisoners say it is---who am I to disagree!

Prison Economics: How Fish and Coffee Become Cash

""Nothing makes you more powerful inside the joint than a strong grounding in currency arbitrage. Inmates in federal penitentiaries aren’t allowed to have actual money; family members can load up prison commissary accounts, which usually max out at about $300 a month, but the money’s not transferable and can be redeemed only at the commissary. And cigarettes, the former gold standard for securing everything from a bodyguard to starched laundry, have all but disappeared since tobacco was banned at federal pens in 2004. So inmates have to rely on other forms of currency. All of which means the prison economy runs much like a commodities market: Money in a commissary account can’t be traded, but goods sold at the commissary can be. And since the amounts in circulation are tightly regulated, their value can far surpass their price in dollars. So if you’re sent away to, say, the US Penitentiary in Lewisburg, Pennsylvania, for “mistakes” you made in the run-up to the Great Recession, here’s how to get the best return on your next investment.


1. Mackerel
Cost $1.40 per 3.5-ounce pouch
Limit 14 per week
Use Tipping for laundry service, cell cleanup, or a haircut.
Value If you don’t open the pouch, it never spoils … which means the fish retains its close-to-a-dollar value.
2. Instant Coffee
Cost $3.35 per 4-ounce bag
Limit 3 per week
Use Getting buzzed cheaply.
Value Prisons just say no to drugs, so caffeine is the licit stimulant of choice.
 3. Postage Stamps
Cost $8.80 for 20 stamps
Limit 3 books per week
Use Paying off large gambling debts or buying protection quickly.
Value High price-to-size ratio; easy to conceal. Without email access, snail mail is king.
4. Combination Lock
Cost $6.50 and up
Limit 1
Use Keeping stuff secure. Plus, you can put it inside a sock to make a weapon.
Value Let’s just say it’s worth a heck of a lot more than a pack of cigarettes if someone needs one in a pinch.

HT: Carpe Diem

London Coffee Shop has higher prices for drinks to go than to drink on premise (see photo). Why is this so? Anyone have an answer

Why do you suppose this Coffee Shop in London prices the drinks where is cost MORE to get a drink to go than to drink it in the shop?  I honestly don't know...I am sure there is a Microeconomics lesson in here somewhere.



I am keepin the source a secret for now...



This sports complex in the UK gives new meaning to the term "Dead Heat"...Yikes!

The borough of Redditch in the UK estimates it can save $23,000 per year by heating a community sports complex with excess heat from a near-by CREMATORIUM...I am all for saving energy, but the creep out-give-me-the-willys-factor is too high for my taste...Sorry, but I would have to cut expenses elsewhere...

(Source: Wall Street Journal print edition---not on their website)

What does the Sun rising everyday, Lindsey Lohan getting in trouble, North Korea asking for food aid, all have in common?

What does the Sun rising everyday, Lindsey Lohan getting in trouble, North Korea asking for food aid, all have in common?

All are predictable and occur right on schedule...

North Korea appeals to foreign governments for food aid
""North Korea has ordered all its embassies to appeal to foreign governments for food aid in a sign of growing desperation in Pyongyang, according to diplomatic sources.

This direct approach to foreign capitals, launched in December, is highly unusual for the insular and totalitarian regime, which normally negotiates deliveries of food assistance with international organisations such as the World Food Programme (WFP).

The WFP and the Food and Agriculture Organisation (FAO) has begun a food needs assessment in North Korea, but the WFP said that last year it managed to raise only a fifth of the budget it needed for its North Korean aid programme.
That shortfall may be one of the reasons Pyongyang is trying a direct approach this year, observers said.

"This year, all 40 North Korean embassies have been ordered by Pyongyang to ask governments for food. They have each been given a quota," an Asian diplomat said....""

Procrastination Flowchart---If you look at this please note the irony.... :)

rocrastination Flowchart---If you look at this please note the irony.... :)

Source HERE (HT: Chartporn)

See how my poll numbers differ from Republicans poll numbers on Federal Budget issues. I am a man without a Party...

See how my poll numbers differ from Republicans poll numbers on Federal Budget issues. I am a man without a Party...

In a poll of Conservative Republicans on spending and tax priorities, these were the results when asked about the relative importance of these goals---their poll numbers are on theLEFT.  In my opinion, the numbers on the RIGHT in red are what they SHOULD BE.  Too extreme? The elephant in the House (pardon the pun) not being addressed are these two entitlement programs.  Everything else is small change.

56% - cut spending across the board (1%)
27% - cut spending from all government budgets except the military(1%)
10% - pass a balanced budget amendment (1%)
3% - cut taxes  (1%)
3% - fix Social Security/Medicare so they don’t pay out more than they take in (94%) 
1% - raise taxes on the wealthy (1%)
1% - cut spending primarily from the defense budget (1%)

Look at US Exports to China! Looks like Pres Obama is going to achieve the goal of doubling US exports. The sooner the better

Look at US Exports to China! Looks like Pres Obama is going to achieve the goal of doubling US exports. The sooner the better.

And why not? This is good for the US.  A nice trend in US exports to China.  As China develops a middle class they will seek more US goods and services.  Some people see low wage jobs and low-skilled production going to China as a bad thing.  I see low wage jobs for no-wage people as a way to develop and move up the economic ladder so they can buy goods produced by high-skilled, high wage US workers. Seems like a good trade-off to me.  It is not something that happens overnight, but by the trend line you see here, it happens none-the-less. 

Source: Business Insider

How are economists, witches, and weathermen similar?

Witches to Be Held Accountable for Bad Predictions; Why Only Them?

By STEPHEN J. DUBNER

In Romania, life has gotten even harder for practicing witches, as spelled out in a recent A.P. article:

A month after Romanian authorities began taxing them for their trade, the country’s soothsayers and fortune tellers are cursing a new bill that threatens fines or even prison if their predictions don’t come true.

Read This Today!!!

http://www.working-minds.com/galtmini.htm

Demand For Cap'n Crunch Has Doubled?!!? Something's Fishy...

I have a sneaky suspicion that there could be a direct link to the Presidents encouragement to produce more ethonal.

Get ready for higher food prices

By David Hendee
WORLD-HERALD STAFF WRITER

 

Warnings of higher food prices headed for American supermarkets and restaurants were swallowed easily across much of farm country Wednesday.
The big gulp came when the U.S. Department of Agriculture reported that global demand had pushed U.S. corn supplies to their lowest point in 15 years.
The price of corn, which has doubled over the past six months, affects most food products in supermarkets. It's used to feed the cattle, hogs and chickens that fill the meat aisles.
It is the main ingredient in Cap'n Crunch and Doritos. Turned into syrup, it sweetens most soft drinks and many foods.
Corn also is part of the agricultural blend that fuels the economies of Nebraska, Iowa and other farming states. Iowa is the nation's top corn-producing state; Nebraska is third.

http://www.omaha.com/article/20110210/NEWS01/702109884/0#get-ready-for-higher-food-prices

I'm Sensing a PPF Shift!

SCIENTISTS have created a real-life thinking cap which works by zapping electricity through the brain.

The device, which uses two electricity conductors, significantly boosted results in a simple maths test.
Out of a sample of 60 participants, THREE TIMES as many people who wore the cap were able to complete it, compared to those who tried it without.

http://www.thesun.co.uk/sol/homepage/news/3404056/Thinking-cap-zaps-brain-to-make-people-more-creative.html

Sam Was Right!!! And Now She Gets To Say "I Told You So"

Diet Soda: Fewer Calories, Greater Stroke Risk?

Controversial Study Linking Diet Soda to Heightened Stroke Risk Draws Skepticism

 By KATIE MOISSE ABC News Medical Unit

Feb. 9, 2011

According to a study of more than 2,500 people presented today as a poster at the American Stroke Association International Stroke Conference in Los Angeles, people who drank diet soda daily had a 61 percent increased risk of cardiovascular events compared to those who drank no soda, even when accounting for smoking, physical activity, alcohol consumption and calories consumed per day.

How is Egypt like Zimbabwe? Egypt just printed money to increase the pay of its Government workers...This did not end well when Zimbabwe did it...Why do we study history again?

Is Egypt heading down the same path as Zimbabwe has for the past decade?   When an Authoritarian starts to print money to pay government employees and/or the military to essentially buy their loyalty, it is a path to monetary destruction.  It becomes a rob Peter (citizens through debasing the currency) to pay Paul (above mentioned bureaucrats/military). This may not end well...

Today:   BBC: Egypt unrest: Public-sector pay rise but protests go on

""The government put up $2.2bn of short-term debt up for auction to inject money into the battered economy....""

2001- 2007: BBC: Zimbabwe inflation rockets higher

""High money supplies have also been fuelling hyperinflation. Critics have accused President Robert Mugabe's government of printing money to finance his election campaign and prop up the economy. Month-on-month inflation in the country accelerated to 839.3% from 433.4%."

"Nothing is Made in the USA anymore!"--oh, really? Don't let evidence get in the way of a good Protectionist argument...



Graph---Relationship between Education and Employment---Any Questions?

Stock-piling ammunition---Egyptian Style....



"Nothing is Made in the USA anymore!"--oh, really? Don't let evidence get in the way of a good Protectionist argument...

 

Carpe Diem



Is US manufacturing in decline?..."Nothing is made in America anymore!" If you look at the graph above, you will see that we have dips in manufacturing output but the historical trend suggests that manufacturing in the US is relatively healthy. SAY WHAT?  But China makes everything, right? I suggest you go on over to the source of this graph and read what Carpe Diem has to say--a short, concise explanation is provide there...I have an additional observation.

Look at the early to mid-1990's.  This is the era of the implementation of NAFTA and the rise of China as a manufacturer, otherwise known as "Doom and Gloom" to trade protectionists.  Notice what happens to the slope of the lines for BOTH the US and China. Both are increasing at an increasing rate--getting steeper.

Granted China's trend line is steeper, but they were starting from a lower base number.  The only anomaly is that in 2010 we took a dip and China did not. I have to assume when our recovery ramps up, our trend line will also head up. 

What do I see out of this?  Manufacturing does not appear to be a "zero-sum game"---their gain does not have to be our loss.  As discussed at Carpe Diem, we are not manufacuting the low tech, low skill, low wage paying stuff we see at Wal-mart but higher tech, higher skilled, knowlege-based, higher wage paying goods/services.  Isn't that what really should matter?

(The source of Prof. Perry's blog entry is this article in the Boston Globe)

Forget the Super Bowl---Farmers are making an Allocative Efficiency decision that will affect the snacks you are eating right now!

Well, not RIGHT NOW, but in the near future...

WSJ: Cotton Farmers Jump on Rising Crop Prices

—The amount of land in the U.S. dedicated to planting cotton this spring is expected to surge 14%, according to a closely watched forecaster.

The National Cotton Council of America, an industry group, said on Saturday it estimates farmers will plant 12.5 million acres of cotton. As a result, the fall harvest is pegged at 19.2 million bales, an increase of 900,000 from the 2010 harvest. The amount of cotton in one bale is enough for about 1,200 T-shirts, according to the council.

Farmers are making an "Allocative Efficiency" decision to produce more cotton than---(fill in the blank).  Assuming there is not that amount of idle acerage, to produce more cotton is going to necessarily mean less of something else. This is illustrated in the graph below.

 The bundle of Cotton and Food produced is going to move from Cotton* and Food* to Cotton 1 and Food 1.  The opportunity cost for the farmer is somewhat minimal---the land, equipment and know-how to produce cotton is about the same as corn, wheat, soybean, etc.  They are looking for the most revenue per acre and cotton is the choice commodity at this time. 

Where the real opportunity cost is incurred in the domestic and international food supply.  We can't eat cotton, so domestic food production will be impacted in some negative way...Won't it??

Graphic--Carbon Emissions by Nation AND Per Capita---VERY different results...

In one easy chart: The problem of US Aid to Egypt, and I suspect other authoritarian governments "friendly" to the US.

Public Sector Aid means money that flows through the recipient government, in this case Egypt, for projects administered by the Egyptian governmnent to help people in a variety of ways. If the government is as corrupt as the people believe, then I would suspect the ACTUAL amount of US aid money that reaches the intended recipients is probably about the same that goes to Private Aid groups (i.e. NGO's). I will leave it to your imagination to figure out where the rest goes...(Note: I don't know where the other 1% is--I suspect it is a rounding error)...

Dilberts view on the Unemployment Report that came out today...Most concise I have seen thus far..



Mainland = Wimps When Compared to the Chicago Public School System. Why?

Midwest buckles under major winter storm

""In Chicago, airlines canceled more than 2,200 flights at O'Hare International Airport, and 400 flights at Midway International Airport. Public schools closed for the first time in 12 years and almost 80,000 ComEd customers in northern Illinois were without power.""

Nostradamus was not an Economist, but he could have been---Inflation is a Self-fulfilling Prophecy...

Inflation is not a problem in the US...now.  The question amongst economists is what is the root cause of current inflationary trends around the world.  Is it demand driven because of scarcity of resources? Are price increases in one area off-set by price decreases somewhere else in the economy, rendering the overall effect neutral? Or is it "too much money chasing too few goods", the classic explanation of inflation?  My opinion is it is a combination of the first and second reasons, with the first one taking precedent.  I have read too many articles lately about the world-wide demand for resources to not give it credence.  Here is another one excerpted below. What do you think?

WSJ: Companies Stock Up as Commodities Prices Rise

""Companies contending with rising commodity prices are stockpiling rubber tires, cotton clothing and other goods, a maneuver that is aimed at insulating them from inflation but also could contribute to it.""

""Purchases made more because of perceived inflationary pressures than a response to demand are important because they signal that inflation expectations are climbing. Economists often focus on inflation expectations, because they can spur people to speed up their purchases, in turn driving prices higher.""

"The price increase then becomes a self-fulfilling prophecy," said Zach Pandl, an economist at Nomura Securities. Once the cycle ends, prices can collapse, he said.""

Nice Food Commodity Price Index Graph here. Price Index? What is that? Well, let me explain...

Source: Business Insider

This chart gives an opportunity to explain how a "Price Index" is calculated.  Price Indexes are useful in that allows you to compare the change in prices over time of similar goods/services OR completely different categories of goods/services. Price Indexes are in the form of a base 100 format.  I am going to skip the complicated math formula(s) that is(are) actually used to compile a price index and use a simple version. 

The first step is to establish a base year for comparison. This chart uses a span of time from 2002-2004.  Let's say the average price of sugar in that time was $1.00 per pound (completely made up price!). This is our base year price. To calculate the Base Year Price Index:

Current Year Price/Base Year Price X 100.  Mulitplying by 100 puts the number in base 100 form.

$1.00 (current year price) / $1.00 (base year price) X 100 = 100. 

In the base year, the current year price and the base year price are the same, so the base year Price Index will always be 100. 

Assume after 1 year the price of sugar is $1.50 per pound.  We use the same formula above and plug in the values:

$1.50 /$1.00 X 100 = 150.  150 is our Price Index for year 2.  In subsequent years we do the same thing: take the current year price of our good/service and dividing it by the base year price then X 100.

Now you are informed enough to read the chart above.  Sugar has a current price index of approx 425. So how much, in percentage terms, has the price of sugar increased? Is it 425%? The simple formula for calculating percentage change:

""Current Year Index - Base Year Index / Base Year Index X 100""

425 - 100 = 325. 325 divided by 100 = 3.25. 3.25 mulitlplied by 100 = 325%.

(Note: Yes, In this example you could have skip a math step after the first calculation. Using the base year of 100 make this easy.  However, if you were asked to calculate the percentage change between two years OTHER then the base year, this formula is necessary to work all the way through)

Quick short-cut: When you see a price index number (other than the base year one), subtract 100 from it and that will give you the percentage change in the price of the measured good/service since its base year. 

Using this information, look at the graph again...Does it not look MUCH easier to read? A quick glance and you can see how the price changes of one good compares to the price changes of the others...Don't you feel smarter now? Well, you ARE!!!

Price of a LaQuinta Hotel room THIS weekend (Super Bowl) versus NEXT weekend in Arlington, Texas...

H'bout Dem Cowboys!!

 

Prices of a LaQuinta Hotel in Arlington, Texas for THIS weekend versus NEXT weekend...Is this a case of capturing Consumer Surplus or simply Quantity Demanded is greater than Quantity Supplied? :)

Enter your birth year and see how prices have changed compared to then---Man, I am OLD!!!

Go HERE to enter your birth year to see how much several staple items cost in your birth year compared to today...Not an exact measurement but interesting...

100,000,000 JOBS!!!! Or They'll Do What???

http://www.youtube.com/watch?v=566r4_3fQqM

Need a reason to personally fret about the situation in Egypt? Check gas prices in the next few days...

WSJ: Crude Jumps 4.3% on Egypt Protests

 ""Egypt produces roughly 673,000 barrels a day, according to the Joint Oil Data Initiative, a global oil database, ranking it 21st among the world's oil producers. Still, the country is home to two of the world's key energy supply routes: the Suez canal, a transit point for oil and fuel shipments from the Persian Gulf to the Western Hemisphere, and the 200-mile-long Sumed pipeline, an alternative transit route to the canal. About one million barrels of oil per day was shipped through each route in 2009, according to the U.S. Energy Information Administration.""

""The Suez Canal is located in Egypt, and connects the Red Sea and Gulf of Suez with the Mediterranean Sea, covering 120 miles. Petroleum (both crude oil and refined products) accounted for 16 percent of Suez cargos, measured by cargo tonnage, in 2009. An estimated 1.0 million bbl/d of crude oil and refined petroleum products flowed northbound through the Suez Canal to the Mediterranean Sea in 2009, while 0.8 million bbl/d travelled southbound into the Red Sea. This represents a decline from 2008, when 1.6 million bbl/d of oil transited northbound to Europe and other developed economies.""Source HERE

Inflation in China reduces our trade deficit with them and brings jobs back to the US, right? I REALLY hope not!!

The other day in class I referred to Inflation as a thief in the night that takes money out of your pocket.  Not literally, but it does reduce the purchasing power of the money you possess, so you are in some measure being robbed.  It not only robs individuals, but whole countries. You might be surprised by which country, in my opinion, will be hurt the MOST by inflation in China---The US!

This article in the NYTIMES: Inflation in China May Curb U.S. Trade Deficit suggests that inflation in China will help reduce our trade deficit with them and that this might be a good thing. Yes, with higher prices for Chinese goods we will buy less (the Law of Demand) from them.

I. am. waiting. for. the. good. news...

This means the "stuff" we do buy from them, and will continue to buy from them, will be more expensive.

Inflation in China does not benefit us. It makes us pay more for staple items that meet our "needs" and we have less to buy things we "want". How is that a good thing?

Many of the consumer goods mentioned in the article produced in China are goods that are low tech in nature and have reached a routine manufacturing stage where it does not take a lot of skill or resources to produce them. THOSE JOBS ARE GONE FROM THE US AND WILL NOT COME BACK.  No amount of hand-wringing and politicking will change that.  Nor should we covet them.  Rather, we must invest in and prepare for the jobs of the future, not invest current resouces in trying to recover the jobs of the past.  I don't teach so you can re-gress. I teach so you can pro-gress.

Convenient chart on how much the average Egyptian spends on Food...You will hear more and more about the link between food and upheaval...

Convenient chart on how much the average Egyptian spends on Food...You will hear more and more about the link between food and upheaval...

This is a chart of roughly how much the average Egyptian spends on needs and wants.  I assume this is typical of a citizen in a relatively low income country.  Food is a very large part of their budget and when prices increase it imposes a disproportionate burden on the family budget.