Inflation!! No wait...

[lomiller]

Originally Posted by Aepervius

Played rift with a cleric until Lv36 or something then I gave up. I dunno, somehow I felt too lonely, there was never anybody playing on. I have a blast with Skyrim through, going on a quest for a daedric weapon this night, while holding on the dark brotehrhood first tier quest, thief guild first tier, first tier mage quest. And various assorted crazy quest I am only starting.

Levelling was fun in Rift for the first 8 weeks or so when there were always people running around doing rifts/invasions but now you pretty much quest grind to 50 before there are many groups available. Unfortunately this it’s how pretty much all MMO’s go these days.

Originally Posted by Aepervius

Main Story ? Oh that ? I have only gotten the one

asking me to meet the greybeard

and not yet done it. I am pretty sure I am at the start of the main story.

You should go, you get a new shout. If you haven’t found out by accident already, they also show you that each shout has 3 tiers and give you all three tiers of the shout they teach you.

Originally Posted by Aepervius

Main
Oh dear, oh dear, what a greeeeat game.

I like it better than Oblivion so far, but I still which they had left some of the flexibility they had back in Morrowind.

[kevsta]

Originally Posted by Sceptic-PK

The fact that it's a no-name website maintained by a nobody (who doesn't even have a relevant bachelors) which has exactly little impact on markets, policies, the real world etc is enough for me. There is plenty of criticism available online re SS, but I don't care enough to hunt all the way through it just yet. I must go play Skyrim. I doubt you'd be too interested in the criticism anyway, your worldview is far too invested in SS being accurate.

http://blog.jparsons.net/2011/06/sha...d-part-ii.html

Lots more where that came from it seems, but my Dark Elf needs to get his murder on.

there are actually some interesting charts on that site, one of which has challenged my assumptions and views enough that i need to work through it.

am going to contact John and see what he has to say about it as well.

back when i know more. (and thanks)

[Sceptic-PK]

Originally Posted by psionl0

I would have expected that you’d notice that I wasn’t referring to a lone individual’s statistics, but the comparison between 2 (3 if you count the Google measurements) current measurements of inflation which you can easily verify if you wish. So once again you’re way off base with one of your childish retorts.

[Sceptic-PK]

Originally Posted by lomiller

AFAIK they are producing what they say, but as people have already pointed out there is no reason to believe the formula for calculating inflation that was used back in the 80’s is superior to the one in use today and a lot of reason to believe it’s inferior.

Well, the guy I quoted earlier also made a point of illustrating the questionable methodology of shadowstats, by pointing out that according to SS, there was no housing bubble. With SS alleging real inflation of ~10%, housing prices were merely keeping pace with inflation. He goes into more depth here, and I find his analysis reasonable:

http://blog.jparsons.net/2011/03/sha...ed-part-i.html

Originally Posted by lomiller

My Breton is out looking to join up with the Dark Brotherhood right now. Unfortunately tonight is one of the days for my static group in Rift, and I have a big project at work that will take up most of Fri/Sat so I doubt I will get to play much Skyrim until Sunday.

Today is my last day of work for 2 weeks!! So next week is almost exclusively Skyrim before my holiday

[Sceptic-PK]

Originally Posted by kevsta

I don't have a Batchelors either, and I saw the debt collapse coming when Bernanke Greenspan and 99.9% of your MIT numpties either didnt appear to, (or lied to us) so that holds exactly zero credibility with me either I'm afraid.

No you didn’t You may have anticipated the mortgage crisis but nobody that I am aware of put all the ducks in a row as far as the contributors to the financial crisis. Everyone seemed to have a piece or two, but never the entire pie.

[psionl0]

Originally Posted by Sceptic-PK

I wasn’t referring to a lone individual’s statistics, but the comparison between 2 (3 if you count the Google measurements) current measurements of inflation which you can easily verify if you wish.

[kevsta]

Originally Posted by Sceptic-PK

No you didn’t You may have anticipated the mortgage crisis but nobody that I am aware of put all the ducks in a row as far as the contributors to the financial crisis. Everyone seemed to have a piece or two, but never the entire pie.

I bolded the important part for you.

yes I did, I knew from 02 that we were due a big recession (UK) that was being can-kicked, and by 05 was selling up and getting out of Dodge(y) property ownership in the UK (06) because I didn't want to get stuck there with dwindling equity.

I was early, but i was correct, too much debt, everybody remortgaging for lame-ass SLKs and new kitchens, there's only one way this can go. early, but correct.

I am not saying I forecast US subprime or the derivatives blowup, but I knew housing was a bubble, whilst the Bernanke and Greenspan didn't or claimed not to anyway)

[Sceptic-PK]

Originally Posted by psionl0

Another top-shelf response from JREF's resident Freeloader on the Land!

[Sceptic-PK]

Originally Posted by kevsta

I bolded the important part for you.

The point being that I have paid a lot of attention to all the snakeoil salesman that have claimed that they “predicted the crisis”. None of them did. They predicted certain aspects sure, but nobody identified all parts of “the perfect storm”.

[kevsta]

lol, well of course not every part of it, how could they? we can say Europe is blowing up right now, but there's always going to be surprises in the mix.

anybody who could predict it perfectly, should be very, very rich.

[The Central Scrutinizer]

Originally Posted by kevsta

lol, well of course not every part of it, how could they? we can say Europe is blowing up right now, but there's always going to be surprises in the mix.

anybody who could predict it perfectly, should be very, very rich.

Or anyone who ignored it. See: Buffett, Warren E.

[daenku32]

So is the prediction of the bubble a benchmark for understanding inflation? Just wondering.

[kevsta]

Originally Posted by The Central Scrutinizer

Or anyone who ignored it. See: Buffett, Warren E.

you should stick to commenting on things you have a clue about really. crony capitalists who are only still solvent because of taxpayer bailouts dont deserve quite as much man-love as you have for him, did you once sit on his knee or something?

http://blogs.reuters.com/rolfe-winkl...etts-betrayal/

Quote:

A good chunk of his fortune is dependent on taxpayer largess. Were it not for government bailouts, for which Buffett lobbied hard, many of his company’s stock holdings would have been wiped out.

Berkshire Hathaway, in which Buffett owns 27 percent, according to a recent proxy filing, has more than $26 billion invested in eight financial companies that have received bailout money. The TARP at one point had nearly $100 billion invested in these companies and, according to new data released by Thomson Reuters, FDIC backs more than $130 billion of their debt.

To put that in perspective, 75 percent of the debt these companies have issued since late November has come with a federal guarantee

Without FDIC’s debt guarantee program, even impregnable Goldman would have collapsed.

And this excludes the emergency, opaque lending facilities from the Federal Reserve that also helped rescue the big banks. Without all these bailouts, the financial system would have been forced to recapitalize itself.

Banks that couldn’t finance their balance sheets would have sold toxic assets at market prices, and the losses would have wiped out their shareholder’s equity. With $7 billion at stake, Buffett is one of the biggest of these shareholders.

He even traded the bailout, seeking morally hazardous profits in preferred stock and warrants of Goldman and GE because he had “confidence in Congress to do the right thing” — to rescue shareholders in too-big-to-fail financials from the losses that were rightfully theirs to absorb.

ignoring it left him virtually broke, getting bailed out made him rich again.

http://fundmanagernews.com/buffett-bailout

Quote:

In perpetrating the greatest illegal transfer of wealth in the history of the world, you have lowered the capitalistic bar to an all-time historic low. This much I know: Despite your charitable efforts and investing acumen, history will not be kind to you for these repugnant actions, and your true legacy is:THE FATHER OF ALL MORAL HAZARD AND THE U.S. ZOMBIE ECONOMY Is Buffett’s legacy at stake? It will be interesting to see if 50 years of competence and a sterling reputation is wiped out because Buffett endorsed the bailouts. Maybe now it’s time to hand over the keys to the Berkshire empire to another manager.

wow, what a man the best part is that this isn't even over yet

lets how it all looks after Europe takes down the US banking system for the second time, we shouldnt have very long to wait.

[kevsta]

Originally Posted by daenku32

So is the prediction of the bubble a benchmark for understanding inflation? Just wondering.

yes apologies, this was your inflation thread wasn't it. lets talk about inflation some more.

http://www.marketoracle.co.uk/Article31032.html

Quote:

UK CPI Inflation smashed through the 5% barrier by rising to 5.2% for September (4.5%), which is now approaching near triple the Bank of England's 2% target that continues to make a mockery of the central bank whose primary remit is supposedly price stability, where 3% was supposed to have been the maximum level a break above which was supposedly to trigger a series of panic measures to bring inflation under control.

Instead of which the Bank of England has instead opted to print money as it recently announced another £75 billion of electronic money printing that the fractional reserve banking system would eventually leverage to over £1 trillion, for the primary objective for the monetization of government debt, i.e. the same policy that the Weimar republic had been engaged in on its path towards hyperinflation.

UK public debt is probably being monetized at the rate of 15% per annum with approx 30% monetized to date, only the deflation fools and the vested interest academic economists cannot or choose not to realise the highly inflationary consequences of governments monetizing their debt.

http://blogs.telegraph.co.uk/finance...worse-to-come/

Quote:

The Bank of England has frozen interest rates since earl 2009
Savers have been stealthily robbed of £43bn of the real value of their savings since the Bank of England froze interest rates at 0.5pc nearly 32 months ago but there could be worse to come.

That's the total shrinkage of bank and building society depositors' purchasing power caused by inflation, according to the pressure group Save Our Savers , following last month’s calculations by Yorkshire Building Society that the average saver has lost £2,500 in real terms since the credit crisis began. Pensioners have suffered even more because higher than average proportions of their fixed incomes are spent on food and fuel.

They are the largely silent victims of the Bank of England's policy of running negative real interest rates. Now, as if that slow motion bank robbery does not seem bad enough, independent experts say history suggests the crisis in the eurozone could cause inflation to rise much more rapidly in future as governments take desperate steps to avoid a global slump.

interesting that in the midst of Mish's absolute definite deflation, even the reported inflation figures are 3% higher than the BoE's target, and have been a steady 1-2% above the 2% target, for the last 2 years.

anecdotally, I have family in the UK and was discussing this with them in August, we ended up digging out food shopping receipts from 2009 and comparing to 2011.

the same basket of things from the same supermarket costs a mere 34% more, 2 years later. energy costs have also risen in 09, 10 and this year from between 4.8% to 9% dependent on supplier.

I suspect that it is a similar situation in the US, but don't have the specific information to back that up, however I definitely struggle to see any relevance whatsoever between the UK CPI and reality on the street, for most people.

it can be used for working out the *theoretical* losses to inflation theft from savers, but in reality they have likely lost much more than the Govt figures imply assuming they want to buy anything they need, rather than discretionary goods.

Behold the reality of financial repression. So am I a full-blown CTer for distrusting the Govt figures?

PS I have also emailed John Williams @ ShadowStats - hopefully will hear something back from him soon.

[Sceptic-PK]

Quote:

UK CPI Inflation smashed through the 5% barrier by rising to 5.2% for September (4.5%), which is now approaching near triple the Bank of England's 2% target that continues to make a mockery of the central bank whose primary remit is supposedly price stability, where 3% was supposed to have been the maximum level a break above which was supposedly to trigger a series of panic measures to bring inflation under control.

Instead of which the Bank of England has instead opted to print money as it recently announced another £75 billion of electronic money printing that the fractional reserve banking system would eventually leverage to over £1 trillion, for the primary objective for the monetization of government debt, i.e. the same policy that the Weimar republic had been engaged in on its path towards hyperinflation.

UK public debt is probably being monetized at the rate of 15% per annum with approx 30% monetized to date, only the deflation fools and the vested interest academic economists cannot or choose not to realise the highly inflationary consequences of governments monetizing their debt.

Any reason you're quoting from September when October figures have just been released that indicate a small fall in the inflation rate to 5%? "Price stability" /= "value of money stays the same" either.

I'm not stating the view as quoted is wrong but it is awfully one-sided and does not discuss any mitigating factors (real or imagined) the BoE might be dealing with or considering.

Quote:

15 Nov 2011

Excluding food, energy and some other volatile items, the annual inflation rate rose in October to 3.4% from 3.3%, primarily as a consequence of higher clothing prices, the ONS official said.

Despite the improvement in the overall rate inflation remains well above the Bank of England's 2% annual target. Governor Mervyn King on Tuesday reiterated the BOE's long-held view that inflation will fall sharply next year, as the influence of temporary factors wanes and weakness in the economy bears down on wages and prices. Economists at Capital Economics said the annual rate of inflation has probably now passed its peak.

Indeed, the central bank in October revived a program of asset purchases in order to prevent inflation plunging below its 2% target within the next couple of years, such are its fears for the U.K.'s economic health. Investors expect the BOE to signal that further stimulus is likely when its it publishes its latest forecasts for inflation and economic growth Wednesday.

http://online.wsj.com/article/SB1000...googlenews_wsj

[kevsta]

Originally Posted by Sceptic-PK

Any reason you're quoting from September when October figures have just been released that indicate a small fall in the inflation rate to 5%? "Price stability" /= "value of money stays the same" either.

I'm not stating the view as quoted is wrong but it is awfully one-sided and does not discuss any mitigating factors (real or imagined) the BoE might be dealing with or considering.

only because the Sept article was the last one I saw, 5.2, 5, whatever.

no relation whatsoever to reality on the streets is the point.

[lomiller]

Originally Posted by kevsta

you should stick to commenting on things you have a clue about really. crony capitalists who are only still solvent because of taxpayer bailouts dont deserve quite as much man-love as you have for him, did you once sit on his knee or something?

http://blogs.reuters.com/rolfe-winkl...etts-betrayal/



http://blogs.reuters.com/rolfe-winkl...t-bailout2.jpg

ignoring it left him virtually broke, getting bailed out made him rich again.

http://fundmanagernews.com/buffett-bailout



wow, what a man the best part is that this isn't even over yet

lets how it all looks after Europe takes down the US banking system for the second time, we shouldnt have very long to wait.

The US government made money from the TARP bailouts given to banks. AIG is different story, but the banks loaned money under TARP paid it back with interest.

You also need to remember that banks were not given a choice in taking TARP funds, the Fed didn’t want to point out which banks were in the most trouble. Since in many cases it didn’t matter that much where the money was injected into the banking system went they forced all the major banks to accept TARP money even those that didn’t want any.

[kevsta]

Originally Posted by lomiller

The US government made money from the TARP bailouts given to banks. AIG is different story, but the banks loaned money under TARP paid it back with interest.

I wasn't so much commenting on TARP itself as the fact that without it, a certain idol around here would have been facing a much bleaker financial future and a little less adoration.

also I think it's (most of) the bigger banks that have repaid, many smaller ones haven't, and Citi repaid using stock instead?

Originally Posted by lomiller

You also need to remember that banks were not given a choice in taking TARP funds, the Fed didn’t want to point out which banks were in the most trouble. Since in many cases it didn’t matter that much where the money was injected into the banking system went they forced all the major banks to accept TARP money even those that didn’t want any.

so the story goes...

Goldman were saying that they didnt need it all along weren't they, hiding the fact that if AIG didn't get bailed out they were toast too as I remember?

[Muldur]

Originally Posted by Puppycow

You are incorrect, Sir.

The cost of a new Playstation is less than it was last year.

And of course Playstations are the true measure of inflation...

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%).

[Muldur]

Originally Posted by daenku32

You are doing more than that. Because even if shadowstats' numbers are correct, it doesn't mean that '80s numbers are the ones you even want to use to get a true feel to the inflation going on.

Main reason why you should trust the official numbers, if you aren't going to dig deep, is that prominent economists all around trust them.

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:

Quote:

Let Them Eat Hamburger

In the early 1990s, press reports began surfacing as to how the CPI really was significantly overstating inflation. If only the CPI inflation rate could be reduced, it was argued, then entitlements, such as social security, would not increase as much each year, and that would help to bring the budget deficit under control. Behind this movement were financial luminaries Michael Boskin, then chief economist to the first Bush Administration, and Alan Greenspan, Chairman of the Board of Governors of the Federal Reserve System.

Although the ensuing political furor killed consideration of Congressionally mandated changes in the CPI, the BLS quietly stepped forward and began changing the system, anyway, early in the Clinton Administration.

Up until the Boskin/Greenspan agendum surfaced, the CPI was measured using the costs of a fixed basket of goods, a fairly simple and straightforward concept. The identical basket of goods would be priced at prevailing market costs for each period, and the period-to-period change in the cost of that market basket represented the rate of inflation in terms of maintaining a constant standard of living.

The Boskin/Greenspan argument was that when steak got too expensive, the consumer would substitute hamburger for the steak, and that the inflation measure should reflect the costs tied to buying hamburger versus steak, instead of steak versus steak. Of course, replacing hamburger for steak in the calculations would reduce the inflation rate, but it represented the rate of inflation in terms of maintaining a declining standard of living. Cost of living was being replaced by the cost of survival. The old system told you how much you had to increase your income in order to keep buying steak. The new system promised you hamburger, and then dog food, perhaps, after that.

The Boskin/Greenspan concept violated the intent and common usage of the inflation index. The CPI was considered sacrosanct within the Department of Labor, given the number of contractual relationships that were anchored to it. The CPI was one number that never was to be revised, given its widespread usage.

Shortly after Clinton took control of the White House, however, attitudes changed. The BLS initially did not institute a new CPI measurement using a variable-basket of goods that allowed substitution of hamburger for steak, but rather tried to approximate the effect by changing the weighting of goods in the CPI fixed basket. Over a period of several years, straight arithmetic weighting of the CPI components was shifted to a geometric weighting. The Boskin/Greenspan benefit of a geometric weighting was that it automatically gave a lower weighting to CPI components that were rising in price, and a higher weighting to those items dropping in price.

Once the system had been shifted fully to geometric weighting, the net effect was to reduce reported CPI on an annual, or year-over-year basis, by 2.7% from what it would have been based on the traditional weighting methodology. The results have been dramatic. The compounding effect since the early-1990s has reduced annual cost of living adjustments in social security by more than a third.

...

There now are three major CPI measures published by the BLS, CPI for All Urban Consumers (CPI-U), CPI for Urban Wage Earners and Clerical Workers (CPI-W) and the Chained CPI-U (C-CPI-U). The CPI-U is the popularly followed inflation measure reported in the financial media. It was introduced in 1978 as a more-broadly-based version of the then existing CPI, which was renamed CPI-W. The CPI-W is used in calculating Social Security benefits. These two series tend to move together and are based on frequent price sampling, which is supposed to yield something close to an average monthly price measure by component.

The C-CPI-U was introduced during the second Bush Administration as an alternate CPI measure. Unlike the theoretical approximation of geometric weighting to a variable, substitution-prone market basket, the C-CPI-U is a direct measure of the substitution effect. The difference in reporting is that August 2006 year-to-year inflation rates for the CPI-U and the C-CPI-U were 3.8% and 3.4%, respectively. Hence current inflation still has a 0.4% notch to be taken out of it through methodological manipulation. The C-CPI-U would not have been introduced unless there were plans to replace the current series, eventually.

Aside from the changed weighting, the average person also tends to sense higher inflation than is reported by the BLS, because of hedonics, as in hedonism. Hedonics adjusts the prices of goods for the increased pleasure the consumer derives from them. That new washing machine you bought did not cost you 20% more than it would have cost you last year, because you got an offsetting 20% increase in the pleasure you derive from pushing its new electronic control buttons instead of turning that old noisy dial, according to the BLS.

When gasoline rises 10 cents per gallon because of a federally mandated gasoline additive, the increased gasoline cost does not contribute to inflation. Instead, the 10 cents is eliminated from the CPI because of the offsetting hedonic thrills the consumer gets from breathing cleaner air. The same principle applies to federally mandated safety features in automobiles. I have not attempted to quantify the effects of questionable quality adjustments to the CPI, but they are substantial.

Then there is "intervention analysis" in the seasonal adjustment process, when a commodity, like gasoline, goes through violent price swings. Intervention analysis is done to tone down the volatility. As a result, somehow, rising gasoline prices never seem to get fully reflected in the CPI, but the declining prices sure do.


How Can So Many Financial Pundits Live Without Consuming Food and Energy?

The Pollyannas on Wall Street like to play games with the CPI, too. The concept of looking at the "core" rate of inflation-net of food and energy-was developed as a way of removing short-term (as in a month or two) volatility from inflation when energy and/or food prices turned volatile. Since food and energy account for about 23% of consumer spending (as weighted in the CPI), however, related inflation cannot be ignored for long. Nonetheless, it is common to hear financial pundits cite annual "core" inflation as a way of showing how contained inflation is. Such comments are moronic and such commentators are due the appropriate respect.

http://www.shadowstats.com/article/consumer_price_index

[daenku32]

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.

[mikeyx]

Originally Posted by Muldur

And of course Playstations are the true measure of inflation...

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%).

so get a better job or work harder.

[mikeyx]

Originally Posted by Muldur

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:

Or you just dont understand finance, jubilee and all that.

[Muldur]

Originally Posted by mikeyx

so get a better job or work harder.

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?

[Muldur]

Originally Posted by mikeyx

Or you just dont understand finance, jubilee and all that.

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.

[WildCat]

Originally Posted by Muldur

My grocery bill alone is up over 30% from a year ago (for the same basket of goods).

Evidence?

[WildCat]

Originally Posted by Muldur

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%).

So now you're claiming a yearly inflation rate of 500% - 1,500%? You'd think someone would notice!

[Muldur]

Originally Posted by WildCat

Evidence?

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%.

[Muldur]

Originally Posted by WildCat

So now you're claiming a yearly inflation rate of 500% - 1,500%? You'd think someone would notice!

No, I said the prices on two individual ITEMS had increased, one by ~15% and the other by ~5%.

[not_so_new]

And yet there are no replies about this link?

Originally Posted by daenku32

If you don't trust the government, will you trust the markets?
http://online.wsj.com/article/BT-CO-...16-712864.html

[kevsta]

Originally Posted by not_so_new

And yet there are no replies about this link?

Im not subscribed, nor would I for such groundbreaking analysis as this

Quote:

-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

gold dropped $7 because of low inflation?

what does the full article say?

[daenku32]

Originally Posted by kevsta

Im not subscribed, nor would I for such groundbreaking analysis as this



gold dropped $7 because of low inflation?

what does the full article say?

Here's a free one.
http://www.businessweek.com/news/201...s-in-u-s-.html
And another.
http://www.forbes.com/sites/kitconew...as-safe-haven/

The take-home message is that inflation is low and the dollar is strong.

[kevsta]

Originally Posted by daenku32

Here's a free one.
http://www.businessweek.com/news/201...s-in-u-s-.html
And another.
http://www.forbes.com/sites/kitconew...as-safe-haven/

The take-home message is that inflation is low and the dollar is strong.

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?

[daenku32]

Originally Posted by kevsta

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?

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.

[kevsta]

Originally Posted by daenku32

OK, so you don't like what the market pundits say. I guess that's good to know.

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.

Originally Posted by daenku32

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.

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.

[daenku32]

So, I was reading this article:
The ECB’s Reverse FDR
And Prof Krugman typed:

Quote:

FDR created an expectation of rising prices that had a salutary effect on demand.

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.

[kevsta]

YouTube Video This video is not hosted by the JREF. The JREF can not be held responsible for the suitability or legality of this material. By clicking the link below you agree to view content from an external website.

I AGREE

"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.

[kevsta]

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

Quote:

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.

http://www.federalreserve.gov/pubs/f...201156abs.html

http://www.federalreserve.gov/pubs/f.../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/20...es-all-in.html

Quote:

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):

Quote:

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.

[daenku32]

Originally Posted by kevsta

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

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.

In the mean time the experts are still seeing very low inflation:
http://www.reuters.com/article/2012/...80Q28J20120127

[kevsta]

Originally Posted by daenku32

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.

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 ?

Originally Posted by daenku32

In the mean time the experts are still seeing very low inflation:
http://www.reuters.com/article/2012/...80Q28J20120127

these "experts" ?

from your link.

Quote:

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

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.

translation:

Quote:

"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? "