Inflation? Deflation? Hyperinflation? My Concern Is With Wages.

I’ve read quite a few out-of-the-way economics websites (and stuff that deals with economics) and everyone seems to think that the economy will enter into an inflationary period that will somehow magically destroy all debts along with the savings. They seem to think that, even if the prices shoot up, wages will also shoot up and make all loans worthless.

Here’s the issue: it ain’t necessarily so.

Consider this: If prices double and your wages stand still, what happens to your purchasing power? It drops by half; and whatever debts you have become more onerous even if they don’t increase.

Here’s the thing about I’m going to call wageless inflation: It happens. Suddenly prices for food and fuel and clothes and heat and water shoot up and you’re left with nothing to pay all the bills, never mind have fun and stuff.

And it’s not sure that prices won’t go up while wages stagnate or drop. Anyone Remember Thailand? A dynamic economy in the early nineties, but now known as a haven for men going around with a taste for girls young enough to get them in trouble at home.

Remember Iceland? Now most of the people there are bankrupt (although they’re busy getting food and stuff, they owe enough that they couldn’t pay the interest off on their loans). While I haven’t read up on Nordic Sex Tours yet (outside of a fictional book), I wouldn’t be surprised if there were suddenly a few more whore houses hidden around Reykjavik for “tourists” who know what they’re looking for and how to find it.

And considering that the unemployment rate has shot up by 3.6 million people. And that’s people who had jobs who can’t find them anymore; what about college students forced into the job market because they can’t continue their education (or find they’ve been stuck with “work-study” when they didn’t have it before) or people going from 2 jobs to 1 (or 3 jobs to 2) or people who suddenly can’t freelance as much as they used to? That, my friends, consists of downward pressure on wages.

And guess what: Prices have risen and stayed risen. I’ve seen milk double in price. Eggs which used to sell normally at 99 cents now are good sales at that price.various prices have risen and stayed risen, usually for good and decent foods (crap still sells cheaply and is on plenty of sales). And the prices have stayed up.

And people are buying less stuff even now, causing states and cities to lose services. States no longer pay their bills on time (not just Illinois with their psycho (now former) governor gumming up the works), and cities are cutting back on services. Sure there’s some downward  pressure on prices, but the downward pressure on wages is greater at this moment.

And in case you think what I’m talking about isn’t possible…it may be already happening.

Pleasant dreams….

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