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Inflation!! No wait...

I'm not an economist, but right from the top I know the difference between actual inflation, and prices going up due to environment (including taxes). Monetary policy is what inflation is most related to. The price movement of our fiat currency. To make this real simple: things like gasoline price hiking shortages can happen just as well in low-inflation environment. If we suddenly found our water supply poisoned due to a terrorist attack, natural disaster, or something in between, we would see dramatic change in our cost of living but it would not automatically mean that the dollar would be worth less.
 
Muldur said:
And of course Playstations are the true measure of inflation... :rolleyes:

I just went to the store yesterday for a couple of things I forgot earlier in the week and lo and behold prices on two different items on my list had gone significantly higher (one by 15% and one by 5%).
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so get a better job or work harder.
 
Muldur said:
Would those be the same economists that predicted the "end of the business cycle", the "new economy", etc?

Here's how the books are cooked:
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Or you just dont understand finance, jubilee and all that.
 
mikeyx said:
so get a better job or work harder.
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So they can turn around and raise prices more, meaning everyone works even harder, rinse, repeat again and again and again.

And when the current crop of workers is all used up just toss them away like burned out lightbulbs...

Assuming they can even FIND jobs.

And assuming they can work in the first place.

What is your proposed solution for the elderly and the disabled? Or do you even care about them?
 
mikeyx said:
Or you just dont understand finance, jubilee and all that.
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I think I know finance quite well. I know when unregulated markets shaft just about everybody but the financiers and banksters. I knew well before 08 that there was and is no such thing as the "new economy". Boom and bust are part of the business cycle and always will be.

You vaunted "economists" kept saying otherwise, right up to the bubble burst. And even now they are too busy making excuses to deal with economics as it really is, not as their theories would like it to be.
 
Muldur said:
I just went to the store yesterday for a couple of things I forgot earlier in the week and lo and behold prices on two different items on my list had gone significantly higher (one by 15% and one by 5%).
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So now you're claiming a yearly inflation rate of 500% - 1,500%? You'd think someone would notice!
 
WildCat said:
Evidence?
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Since I'm on a fixed portions food plan for my diabetes I buy the same amounts of the same foods every week. I'm already buying as many store brands as possible, and I'm brand loyal on the couple of "branded" items on my list. So this is a true "apples to apples" comparison.

My average weekly grocery bill a year ago, allowing for the occasional sale or coupon was ~$18. My latest one was ~$24. Difference ~$6. 6 is 1/3 of 18.

So I should have said ~33%.
 
WildCat said:
So now you're claiming a yearly inflation rate of 500% - 1,500%? You'd think someone would notice!
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No, I said the prices on two individual ITEMS had increased, one by ~15% and the other by ~5%.
 
not_so_new said:
And yet there are no replies about this link?
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Im not subscribed, nor would I for such groundbreaking analysis as this

-Comex December gold settles down $7.90 at $1,774.30 a troy ounce

--Tame U.S. consumer price index curbs demand for gold as inflation hedge
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gold dropped $7 because of low inflation? :rolleyes:

what does the full article say?
 
daenku32 said:
Here's a free one.
http://www.businessweek.com/news/20...lly-curbs-demand-inflation-cools-in-u-s-.html
And another.
http://www.forbes.com/sites/kitcone...-weaker-as-investors-seek-cash-as-safe-haven/

The take-home message is that inflation is low and the dollar is strong.
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Ok, I have a few problems with very basic analysis like this.

Firstly how the dollar can be described as "strong" when basically it's languishing towards multi-year lows, and unable to rally significantly even against another currency that could very well be in it's death throes?

granted, it has bounced slightly off the very bottom, but "strong" is just not very realistic is it?

and trying to assert that standard daily machinations in the gold market are anything to do with inflation is a bit of a stretch of the imagination IMO, especially when even after the latest correction gold is up 20 something% YTD.

but secondly and more importantly, I really don't think the "inflation rate" reflects reality very well.

the situation (or perception of many many people) that we have is food and energy rising faster than the stated rates, and (leveraged) asset prices still falling, housing being the main one for most people, and probably with a considerable way to go yet in lots of places.

so add the 2 parts of this together and you may be able to come up with a figure that sounds ok, 4 or 5% or whatever, but that doesn't really reflect the situation the 99% are in, does it?

If you've lost most or all of the equity in your house and life is getting more expensive all the time, "it's only 4%" doesn't really help much does it?
 
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kevsta said:
Ok, I have a few problems with very basic analysis like this.

Firstly how the dollar can be described as "strong" when basically it's languishing towards multi-year lows, and unable to rally significantly even against another currency that could very well be in it's death throes?

granted, it has bounced slightly off the very bottom, but "strong" is just not very realistic is it?

and trying to assert that standard daily machinations in the gold market are anything to do with inflation is a bit of a stretch of the imagination IMO, especially when even after the latest correction gold is up 20 something% YTD.

but secondly and more importantly, I really don't think the "inflation rate" reflects reality very well.

the situation (or perception of many many people) that we have is food and energy rising faster than the stated rates, and (leveraged) asset prices still falling, housing being the main one for most people, and probably with a considerable way to go yet in lots of places.

so add the 2 parts of this together and you may be able to come up with a figure that sounds ok, 4 or 5% or whatever, but that doesn't really reflect the situation the 99% are in, does it?

If you've lost most or all of the equity in your house and life is getting more expensive all the time, "it's only 4%" doesn't really help much does it?
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OK, so you don't like what the market pundits say. I guess that's good to know.

All I can tell you is that most people live off their wages, not their assets. If gold is up 20% YTD, I think it's time to cash in on it and realize the profits.
 
daenku32 said:
OK, so you don't like what the market pundits say. I guess that's good to know.
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which market pundits? if i want news about gold or silver, I would read those who understand gold and silver?

I dont pay much attention to those who clearly don't and make random connections about $7 movements.

daenku32 said:
All I can tell you is that most people live off their wages, not their assets. If gold is up 20% YTD, I think it's time to cash in on it and realize the profits.
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well when would I stop though?

I bought my first gold at just under $1000 (£606GBP actually) in 2009 so it's currently up 70% ish in $ terms having been as high as $1900, and 81% measured in GBP.

I firmly believe we will cruise through $2000, then $2500, then $3000 etc on into the future, so why on earth would I want to get out now? it wont be a straight line, it will correct violently at times, because that's what it does, but "what" am I going to cash it in for?

FIAT that will continue devaluing? this argument makes zero sense to me.

when the ratios are right I will think about swapping for property, but frankly I see no sign of an end to the world's financial problems, and the actions politicians will take in the meantime to avoid collapse are massively gold positive?

say you were me, would you have cashed in at the first 20% up and missed the next 50%? the point is that there is NO other sound form of money to save in.

maybe if Ron Paul gets elected as president I might sell quickly, but I gather that's not very likely, the Americans will elect some bankster stooge or wrestling clown or something, that's what they do.
 
So, I was reading this article:
The ECB’s Reverse FDR
And Prof Krugman typed:
FDR created an expectation of rising prices that had a salutary effect on demand.
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So since we are facing a demand problem today, perhaps Kevstra's doomsday scenarios of high inflation and weakening dollar is an incentive for people to spend money rather than hoard it, therefore boosting the economy.

A silver lining around the cloud, as they say.

The darkness of the cloud is of course the small number of people left these days with the luxury of deciding whether to hoard or save dollars.
 


"Fuzzy numbers", Chris Martenson explains exactly how every administration since JFK have incrementally "adjusted" the procedures (curiously, always towards more flattering stats) to the point where the numbers have very little to do with reality any more.
 
this is interesting..

so ZIRP4EVA and the new (stated) mandate for 2% annual inflation has a new benchmark. they've dropped CPI and are using "PCE" instead as the target

This paper examines a number of alternative PCE price inflation measures including overall PCE inflation, PCE inflation excluding food and energy, trimmed mean PCE inflation, component-smoothed inflation, variance-weighted inflation, inflation with weights based on disaggregated regressions, and survey measures of inflation expectations.
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http://www.federalreserve.gov/pubs/feds/2011/201156/201156abs.html

http://www.federalreserve.gov/pubs/feds/2011/201156/201156pap.pdf

only there appears to be a problem with this study, it cuts off at 2009, after which the correlation / conclusion seems to break down.

http://brucekrasting.blogspot.com/2012/01/bernanke-goes-all-in.html

There’s just one teeny problem with Alan’s work. He did all of that comparing and studying using data from pre-2010. Using that information, CPCE lines up very well as a consistent barometer of inflation. But the analysis falls to **** when you look beyond 2009. CPCE took a nose-dive after 2009 (versus CPI and Core CPI):
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Inflation.png


Information on CPCE and the other measures of inflation is available monthly. There’s no reason (that I can think of) why the Fed chose to deliberately omit two years of data that would conflict with the “desired’ conclusion. To me, it looks like the authors manipulated the report.
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daenku32 said:
Yeah. And I'm sure it will be addressed, since the paper still uses 19 continuous years of real data so it's not pulled out of thin air.
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addressed by whom? it was in fact ignored and not addressed.

If you had a casino gambling system that worked fantastically well for 19 years then the last 2 it stopped working and you lost all your money, would you use it as the basis of all future theorizing ?

daenku32 said:
In the mean time the experts are still seeing very low inflation:
http://www.reuters.com/article/2012/01/27/us-usa-fed-inflation-idUSTRE80Q28J20120127
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these "experts" ?

from your link.

It has only been a few days since the Federal Reserve adopted a formal goal for inflation, [and a new way of measuring it] and already policymakers are missing their target :rolleyes:

Growth in the government's personal consumption expenditure index, which the Fed now targets at 2.0 percent, dropped to a 0.7 percent annual rate, about a third of its pace during the previous three months.

Of course, the Fed aims to hit its target over the longer run and will be willing to look through often volatile food and energy prices. [because whats a little peasant suffering when we have an imploding banking system to prop up?]

With unemployment still at an elevated 8.5 percent, Friday's data could buttress the case within the central bank for taking new action to boost the economy.

"Clearly, much work remains to achieve the Fed's dual mandate of maximum sustainable employment in the context of price stability," said New York Fed President William Dudley, who has hinted he supports doing more to lower borrowing costs.

"Inflation has retreated and may be headed down further," Dudley told reporters on Friday.
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translation:

"oh look! the new improved inflation figure we adopted yesterday (leaving out the last 2 years information) says we have to print money!!

well who'da thunk it?

Benny, where's your marble? "
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