[kabar]

So gas and food prices will decline? What about unprecedented peacetime government spending injecting trillions into the economy and increasing debt servicing costs? What happens with the real estate bubble?

It appears we are going to have significant COLA increases for SS and federal pensions. The budget deficit will only increase.

[rbg81]

It appears we are going to have significant COLA increases for SS and federal pensions. The budget deficit will only increase.

---

The decline in interest rates, starting in the late 1980s, never made a lot of sense to me. The amount of debt, especially Government debt, has exploded. And not just in the US.

I have asserted for some time that interest rates are being kept artificially low. Why? Simply because they cannot be allowed to go up. If they do, the deficit will become unaffordable and the Entitlement State will grind to a halt. If that happened, then you would see riots like we’ve never seen in our history. Effectively, a Civil War 2.0 That can’t be allowed to happen, so we are keeping about 1/3 of the population on the dole.

The rub is that the situation is not improving. Labor force participation is going down. Intuitively people know something is up and many would rather suck on the Government teat than work. That will eventually cause some kind of collapse. Before then, however, the “productive” people will start charging a lot more for their services. Kind of like what we are seeing now.

[Oatka]

It appears we are going to have significant COLA increases for SS and federal pensions.

I suspect that when that time comes, there will be yet another "revision" to the index** to show that we had only a 1% inflation rate. Going by the 10 year average shown below, we are overdue for an update.

**
The 1940 CPI revision: the first comprehensive revision
The 1953 CPI revision: the second comprehensive revision
The 1964 CPI revision: the third comprehensive revision
The 1978 CPI revision: the fourth comprehensive revision
The 1987 CPI revision: the fifth comprehensive revision
The 1998 CPI revision: the sixth comprehensive revision

[Sidebar] From MSNBC no less:
Inflation Actually Near 10% Using Older Measure

[griswold3]

Lumber prices have fallen. So there’s that… The rest is yet to be seen. High price does affect consumer behavior. What will suppliers do with all that excess inventory? They’ll need to move it.