Inflation has been suppressed for a never before encountered reason.
Computers, the internet and our accelerating technology are deflationary forces that have become more powerful than the current level of Ben's inflationary money printing.
My $700 Chinese computer is replacing $1100 Klipsch speakers and $500 per year of LP records and $500 per year in books and $300 of magazines and $4000 in miscellaneous entertainment and $3000 in avoided trips to the store and the repair shop and travel agency etc.
My small business has cut half the employees I previously needed to do bookkeeping, taxes, mailings through software, email and offshored customer service. Our road salesman and print advertising was replaced by Google.
I'm a died in the wool Ron Paul "End the Fed" guy, but I think EVERYBODY is obsessing about the Fed's inflationary printing press and ignoring the bigger more powerful deflationary effects of an increasingly efficient world. This completely, and correctly explains why inflation as it is commonly calculated, has not been experienced in a big way, and why Bernanke has been getting away with money murder.
~3 Major deflationary forces on the way~
1. A Chinese made compressed natural gas compressor mounted in your garage to fuel the family car totally kills 116,855 USA gas stations and hands pink slips to it's 910,000 employees. The $200 per month it will save your family allows Bernanke to print and distribute another 200 paper dollars without creating visible inflation.
2. Chinese made Home 3D printing and CNC machines. Toys. Tools. Replacement parts. Make whatever you want from a lump of whatever you have. If your little 3d printer makes the toy, you don’t have to drive a car to go buy it, it didn’t have to be trucked by a truck driver to a store for you to see it, it didn’t have to be packaged in a factory or sold by a retail worker regarding it.
3. Cheap Chinese made solar power systems will kill US power plants, power distribution companies and lay off 560,000 well compensated workers. Highly efficient Chinese LED lights lasting 25 years lay off light bulb changers and manufacturers and reduce the needed size and initial cost of the coming solar systems. The coming high efficiency multistage heat pumps will also reduce the needed size of the coming solar systems. American job killing Solar will be ubiquitous in ten years or less.
There are thousands of improved efficiencies I don't know about coming faster than any living person has experienced as a result of the exponentially expanding information available on the internet.
The workforce and government is not able to keep up, and it will just get worse.
"Timid men prefer the calm of despotism to the tempestuous sea of liberty" TJ