Affordable Theatre Prices for Seattle
Deflation makes a night at the theatre more affordable:
The nonprofit operator of Seattle’s Moore and Paramount theaters is dropping Ticketmaster and signing with Tickets.com [...] the switch will reduce ticket surcharges an average of 20 percent and give buyers more options such as using their mobile phones as tickets and printing from home for free.
A 20% lower surcharge is great news for people struggling to pay the bills and still buy theatre tickets.
On the other hand, have you noticed gas prices at the pump increasing again? Did you notice restaurants — like Claim Jumper — remove many of their recently reduced menu items?
This is because the Federal Reserve and US Treasury are fighting hard to making things more expensive:
The Federal Reserve Bank of New York today [started] purchasing fixed-rate mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae.
[...]
Q: How will purchases under the agency MBS program [to buy Fannie/Freddie debt] be financed?
A: Purchases will be financed through the creation of additional bank reserves.
This means that prices are higher than people can afford to buy or repay. The logical solution is to lower prices to what people can.
The Fed’s solution? Create labor and credit shortages to support higher prices for favored firms:
propping up failed banks and extending them huge amounts of credit has made business more difficult for the people and companies that had nothing to do with creating the mess. Perfectly solvent companies are being squeezed out of business by their creditors precisely because they are not in the Treasury’s fold. With so much lending effectively federally guaranteed, lenders are fleeing anything that is not.
Do the Fed’s actions help JPMorgan and Goldman Sachs? Yes, but precious few others.