great article by jubak about inflation

Discussion in 'Economics' started by scriabinop23, Jun 27, 2006.

  1. Excellent article...thanks for sharing...here's hoping Mr B will read it!
     
  2. misha7

    misha7

    hahaha another guy who thinks he's somehow smarter and more knowledgeable than all the economists in the Fed and dept of labour.
     
  3. Jubak's full of it, IMO. The "real" inflation rate is probably close to 8%. But how can we tell for sure? The Powers lie about it for their own ends.

    If you've kept track of the rising cost of energy, insurance, food, housing, college tuition, movie tickets, etc... you'll see the cost of "everything except wages" is going up sharply while all along the Gummint claims "little or no inflation". We're not all stupid enough to buy their bilge.
     
  4. Quoting from article:

    China's wealth gap
    It's likely to produce even greater regional conflict in China between rich and poor provinces. And a failure to produce the goods undermines the ruling Communist government's only remaining foundation of legitimacy. If the Beijing government can't put a light bulb in every village house and the hope of a car in every city dweller's daydreams, then what exactly is the reward for toeing the line and not asking too many questions?


    -----------------------------

    The reward is not getting shot, sent to some gulag, or conscripted. Last time I checked, China isn't a democracy and doesn't have the same problems that we do with popular opinion. And there are frequent riots among the lower classes/poor in the periphery because of these issues Jubak raises - they just aren't commented on much in the press, partially because of China's press control.

    I don't think that equality is a particular concern with the Chinese government - avoiding revolution is.
     
  5. piezoe

    piezoe

    In response to:

    The "real" inflation rate is probably close to 8%. But how can we tell for sure? The Powers lie about it for their own ends.

    It's true actual inflation in prices exceeds the official figure. But not by nearly as much as you have claimed. The Fed target is 2 %. Actual inflation is probably 1 to 2 % higher than that. The government figure is lowered by the method of calculation that takes quality improvements into account (the calculation method was changed i think during the Reagan years). The Fed budget is benefitted greatly by calculating a lower than actual inflation rate because many entitlements are indexed to inflation. The misleading Government figure is also why you should think twice about buying TIPS.
     
  6. nevadan

    nevadan

    There are three kinds of lies:Lies, damned lies and statistics. (usually attributed to Mark Twain but probably from Benjamin Disraeli or L.H. Courtney)

    The link is to an interesting article on how the government determines the inflation rate. It is all smoke and mirrors.

    http://www.mises.org/story/1873
     
  7. Oil prices are in everything you do...and the multiplier effect of the increase in oil will be reflected as inflation at a higher rate than a simple oil price fractional percentage change...

    Also the first stop inflation created by monetary expansion is a certainty to be reflected in the economy as inflation....

    The family to family average consumption price basket is what matters...and all figures that are included in the government stats that wash this fraction down should not be included in the computations...

    ..................................................................................................

    Also in a $100/$700 real wage world...what must also be included is the inelastic fraction regarding basic consumption products which are largely inelastic...and every one of the inelastic products are affected by higher oil prices...

    In other words there is no where else to get the money..thus living standards fall...
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    The inelastic sensitivity points are of a particular concern...and is one of the main reasons that that the 4 fold increase in oil prices are a highly negative phenomena for the majority of the world´s population...
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    This is why cheap renewable energy should be on the front burner of the leading nations that have the capability to start the process...especially the US that is the father of capitalism...there is a phenomenal amount of money to be made....so then why not the US...and a phenomenal number of US jobs that would be evergreen and decent respectable work...

    For one thing there would be no US deficit had oil prices remained where they were when the Bush Administration began...

    The cheap renewable energy industry no doubt has the brightest growth future bar none...

    ....................................................................................

    The monetary management has been extremely effective in warding off the deflationary scare which was largely caused by the 2002 $7 Trillion meltdown...

    Now school is out on when the fight against deflationary forces becomes overkill...and rampart inflation rears its ugly head....

    Had there been no 2002 crash....inflation winds would be whipping around far more briskly...