It's really dollar destruction. Silver hasn't rallied to $44, the dollar fell to .0227 oz. of silver. If everything were priced in this manner, Americans would be going Cairo on Ben and Tim.
Yes, a "stealth" devaluation. Painfully slow, although in recent weeks, it seems more people have picked up on it and are putting in their vote of no confidence. I'm convinced that if these hacks did not have to answer to the plebs and their outcry over $5.00 gasoline, nothing would stop this onslaught. Even idiots who can't finish a thought comprehend gas prices more than doubling in two years while their houses are still sinking in value. I expect more Fed "hawkish" jawboning very shortly. The usual three ring circus of "good cop, bad cop" on a daily, if not hourly frequency.
You've found an inherent contradiction. If what was happening was really the devaluation of the dollar, dollars would be dropping whether priced in houses or oil or yen. That isn't happening. Clearly your theory need a bit more thinking.
House prices are only falling because government efforts to prop them up prevented them from collapsing to their true value 2 years ago. Instead, they are slowly finding their true bottom. Rents, a better indicator of purchasing power, are on the rise.
Problem is, there are a lot more asset classes than just real estate falling. Current examples - sugar, yen, natural gas, electricity, lumber, uranium. Many others, including most USD/X pairs, are holding relatively constant. Hence why inflation is measured against a basket of goods, and core inflation excludes the most volatile ones.
of course, most professional money managers are probably short silver. academia will always teach you- normal distribution rules like a king! mean reversion and relative value- this is what you should trade. the prices tend not to deviate.
Sure, one can take a snapshot at a moment in time and argue that the dollar isn't being actively devalued, but that's a bit disingenuous. This flawed concept of permanently excluding certain commodities from core inflation is causing riots around the world. It's one thing for the price of commodities to blow off due to a summer drought, but when they PERMANENTLY re-price, then were the f'ing hell does that leave us with this "excluding from core inflation" academic argument?
Except Oil and the grains DIDN'T permanently re-price. Oil has been at 150 and at 30 in recent memory. Wheat's 40% off its 2007 highs. The picture is simply not as you're describing.
No, core inflation is used because it looks better for politicians and the Fed. Almost all the volatility has been on the upside. For the last 11 years, CPI has been higher than "core" more than 80% of the time. Also, many of the hedonic adjustments aren't realistic. I'm not going to start making chicken burgers if beef prices start rising faster than chicken. Look at the history of CPI and how it's been modified in the past. CPI today should never be compared to CPI from past decades, although it's done over and over again. Moreover, look at "prices paid" in the various surveys (ISM Manufacturing, ISM Services, etc.). They've been skyrocketing, but getting little attention.
Thats the problem, housing prices are still overvalued by 40%, some may laugh but the only reason why they arent down as much is because of the efforts and trillions of dollars to prop them up. Housing prices still need to find their "true value" without doing so it will just linger on for many more years. I guess its okay when prices of houses are jumping 20% a year, but when they are falling of course they have to take immediate action to intervene and prop them up, its a complete fucking joke what has happened in housing, prices are still out of control and taxes are still moving higher.