Core Inflation vs. headline inflation #

Discussion in 'Trading' started by Warrior4g, Oct 15, 2007.

  1. i always take the core number with a grain of salt because in order to survive,i need to use energy and food and not a new pair of Nike's. that said there is a reason the fed uses the core and i'm sure most of you realize why bit i will post my thought anyway. the fed feels food and energy cannot be controlled through menetary policy meaning it cannot control the weather or geoplitical the fed's interest in the core is a way to see how inflation is effecting consumer prices on various products
    if oil prices are at 85 bucks,the fed is more concerned as to whether or not oil prices were passed on to the consumer rather than oil prices themselves.i am still wondering if the fed is looking at healthcare and education. its seems easy to spin the inflation numbers but looking through the smoke and mirrors,the truth is seen. we have an inflation problem and a battered dollar is going to make it worse. also,it will get much worse if a democrat is elected.
    it semms as though the fed is artificially holding up the market and not letting true market forces prevail which is only putting a band aid on a bullet wound.the deficit is a problem as well but thats due to iraq and will get rectified in some way.
  2. All one need to do is look at USD, Oil, Gold, Commodities, and food to get an idea of real inflation (~10%).
  3. Its like we are living through a massive global hyperinflation. No one wants any currency honesty. Its oil going to go to 120?
  4. again,its all market spin. it is what it is.
  5. The interesting thing that most Nobel prizes for economics went to US
    And still we deliver problems like subprime

    So as I understand no nobel prize winner were able to warn subprime might cause problems?

    Do they see any problem now with account deficit and dollar devaluation? Or surging commodities? Or moral hazard aftermath? or being obssesed with consumer spending when consumer can spend just by taking new debt?

    We have brightest minds and still can't manage our finances properly
  6. There shouldnt be a nobel for economics. Look at the LTCM fiasco. Not only was the math wrong, it was dangerous. Yet we're in the same spot again.
  7. vansmarket

    vansmarket Guest

    The mathematical models miss out one important variable

    variable X humans

    X= fraud, lying, deception, sabotage, and inside information, cheating, market manipulation, front running.

  8. piezoe


    Thank you, Enforcer for that explanation. At least it is reasonable. I have been wondering why food and energy were being left out, other than the very obvious political reason that it improves the governments press and saves the Treasury many billions on entitlements.

    I don't want to get political here, but i don't understand the logic behind your statement " will get much worse if a democrat is elected " though i'm sure you have a reason to think that. It just seems to me that the "battered dollar" and the "inflation problem" have their root in our huge current deficit and the political expedient, if not the necessity, of monetizing our debt.

    It would seem that this isn't so much a democrat or a republican issue as it is a Bush thing coupled with irresponsibility on behalf of congress on both sides of the isle to carry out their legislative-branch duty. Had they done that properly, perhaps we would not be in Iraq now (saving at the very minimum a trillion dollars), and we might have been spared the most onerous aspects of the patriot act.

    Whether there is a democrat or a republican moving into the Whitehouse in 2009, isn't the election result virtually certain to result in an improvement over the present situation?
  9. G-Boa


    Also consider, as alluded to in the above post, the Treasury has to pay out on its TIPS according to what the CPI number it is saving itself a TON of cash by having that number low.

    Real inflation is way up there!! Imagine if it included FOOD and ENERGY!!
  10. Mvic


    Your definition of X left out the biggest variable of all, irrational behavior due to fear and greed of a completely legal nature and the difference between self interest and the coillective interest.
    #10     Oct 16, 2007