Bernanke led economy proving critics clueless

[sjay]

Government dependents, workers & contractors will reap the benefits again.
How so? Agree with everything before that last sentence.

 

[Paulie]

Meanwhile, prices appear under control, according to Deutsche Bank’s Hooper. So-called core inflation, stripped of energy and food costs, climbed 1.8 percent in the 12 months ending in December, the personal-consumption-expenditures price index shows.

“It just doesn’t look like there’s any evidence right now” of an inflation surge, Hooper said. “There are no alarm bells going off in terms of the current picture.”


Bernanke-Led Economy Proving Critics Clueless About Federal Reserve Policy - Bloomberg

Yeah, sure, strip out energy and food, you know, those things people need to SURVIVE, and everything is great!!

Who cares that every time I got the grocery store I'm paying more than I did last time, and likewise with gas.

Actually, why didn't I think of this? I'm stripping food and energy from my budget from here on out. That's saving me about a G per month. I can go on vacation now!

 

[FireFly]

Yeah, sure, strip out energy and food, you know, those things people need to SURVIVE, and everything is great!!

Who cares that every time I got the grocery store I'm paying more than I did last time, and likewise with gas.

Actually, why didn't I think of this? I'm stripping food and energy from my budget from here on out. That's saving me about a G per month. I can go on vacation now!

The CPI strips out Taxes, Food, Energy & Housing. As you said those things people need to SURVIVE.

 

[Paulie]

Yeah, sure, strip out energy and food, you know, those things people need to SURVIVE, and everything is great!!

Who cares that every time I got the grocery store I'm paying more than I did last time, and likewise with gas.

Actually, why didn't I think of this? I'm stripping food and energy from my budget from here on out. That's saving me about a G per month. I can go on vacation now!

The CPI strips out Taxes, Food, Energy & Housing. As you said those things people need to SURVIVE.

Well it strips them out for the purpose of showing a more rosy number as the "core" statistic. But you know what they say, lies, damned lies, and then statistics.

 

[DSGE]

Yeah, sure, strip out energy and food, you know, those things people need to SURVIVE, and everything is great!!

Who cares that every time I got the grocery store I'm paying more than I did last time, and likewise with gas.

Actually, why didn't I think of this? I'm stripping food and energy from my budget from here on out. That's saving me about a G per month. I can go on vacation now!

The CPI strips out Taxes, Food, Energy & Housing. As you said those things people need to SURVIVE.

Well that's not true. Food, housing and energy make up about 60% of the CPI. Obviously taxes aren't included because it's a price index, not a standard of living index.

 

[EdwardBaiamonte]

Being on a gold standard but not following the rules of the gold standard in place at the time caused the Great Depression. When libertarians say they want a gold standard they presumably mean one in which the rules are followed.

A gold standard is, "A monetary standard under which the basic unit of currency is equal in value to and exchangeable for a specified amount of gold."

of course that is childishly simplistic particularly when you run a gold standard and a central bank. In the language or our time Milton Friedman said, a failure to follow the rules of the gold standard in the face of bank runs caused the Great Depression.

 

[DSGE]

Yeah, sure, strip out energy and food, you know, those things people need to SURVIVE, and everything is great!!

Who cares that every time I got the grocery store I'm paying more than I did last time, and likewise with gas.

Actually, why didn't I think of this? I'm stripping food and energy from my budget from here on out. That's saving me about a G per month. I can go on vacation now!

The CPI strips out Taxes, Food, Energy & Housing. As you said those things people need to SURVIVE.

Well it strips them out for the purpose of showing a more rosy number as the "core" statistic. But you know what they say, lies, damned lies, and then statistics.

Core isn't for "showing a more rosy number". It's looked at because food and energy prices undergo volatile swings for reasons other than monetary policy. We want to look at "underlying inflation". The inflation that monetary policy is causing. Obviously what we all care about is headline inflation. And that's the one that gets reported in the news. However, the central bank shouldn't be reacting transitory swings in headline inflation. Even if it did react, those shocks would have disappeared by the time the monetary reaction has taken effect. So to filter out the non-monetary reasons for changing prices - that is, to filter out the shit the central bank can't control anyway - the central bank looks at things like "core", or "trimmed mean" or "weighted median". It's not deception.

 

[itfitzme]

Meanwhile, prices appear under control, according to Deutsche Bank’s Hooper. So-called core inflation, stripped of energy and food costs, climbed 1.8 percent in the 12 months ending in December, the personal-consumption-expenditures price index shows.

“It just doesn’t look like there’s any evidence right now” of an inflation surge, Hooper said. “There are no alarm bells going off in terms of the current picture.”


Bernanke-Led Economy Proving Critics Clueless About Federal Reserve Policy - Bloomberg

Yeah, sure, strip out energy and food, you know, those things people need to SURVIVE, and everything is great!!

Who cares that every time I got the grocery store I'm paying more than I did last time, and likewise with gas.

Actually, why didn't I think of this? I'm stripping food and energy from my budget from here on out. That's saving me about a G per month. I can go on vacation now!

It took me a while to figure out where the problem is. I find this quote on the BEA website, "the "core" CPI, is closely watched by many economic analysts and policymakers under the belief that food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy."

Here is the problem; the article is about the Federal Reserve monetary policy, and long term inflation stability. It's not about you or your short term inflation experience. The headline does not read, "Bernanke proved clueless about Truthmatters' personal budget experience." It isn't about national inflation. It is about the Federal Reserve monetary policy. See the difference?

While it is certainly interesting that your personal budget experience in your region is different than the national average, you might consider publishing detailed data. There is a website where people enter local gasoline prices. That is useful. And if your in a region of particularly high local industry growth and low unemployment, it wouldn't be surprising if prices are climbing higher than the national average.

The BEA publishes hundreds of indices, including the CPI-U, CPI-W, and CPI-U less energy and food. The also publish the PCE. They also publish them in seasonally adjusted and non-seasonally adjusted form. The Dallas Fed publishes the PCE indices.

National inflation indices also don't track the inflation of specific regions. Inflation in your area may differ from those presented as the national average.

There is no CPI-Truthmatters or a PCE-Truthmatters. I can't even find a CPI-itfitzme, and if there would be anything, there would be a CPI-itfitzme before there would be a CPI-Truthmatters. I know, your mommy told you that you were special. She lied to make you feel good. I heard her talking to my mommy on the phone and she agreed that I am more special than you are.

The only real question is if it is true that "food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy"

What is obvious, without inspection, is that short of population outstripping growth of food and energy production, all inflation indexes will track together in the long run. where is no index that can under estimate inflation in the long run.

There is no index that can under estimate inflation in the long run. As an example the plot at U.S. Monthly CPI and PCE Chart shows the CPI and the PCE.

As an example the plot at U.S. Monthly CPI and PCE Chart shows the CPI and the PCE.

In fact, if you read my earlier comment, you would now know that it isn't necessary to examine the PCE less food and energy to reasonably determine if the 208% increase in the monetary base has caused price inflation. It hasn't. And, given the track record of Bernanke and the monetary policy targeting inflation, there is no reason to conclude that it will.

So, it remains that the only real question is if it is true that "food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy". My first impression is that the PCE index less food and energy does exactly this as it is calculated and published by the professional economists that are in charge of tracking the effects of monetary policy. You would have to be a complete dolt to think that you know more than the professionals that do it for a living.

Still, the question remains if it is true that "food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy".

Can you think of any ways to use the data available on the web, like from the Federal Reserve and the BEA to answer this question?

 

[itfitzme]

Being on a gold standard but not following the rules of the gold standard in place at the time caused the Great Depression. When libertarians say they want a gold standard they presumably mean one in which the rules are followed.

A gold standard is, "A monetary standard under which the basic unit of currency is equal in value to and exchangeable for a specified amount of gold."

of course that is childishly simplistic particularly when you run a gold standard and a central bank. In the language or our time Milton Friedman said, a failure to follow the rules of the gold standard in the face of bank runs caused the Great Depression.

Is there anyone that knows what your talking about except you?

 

[FireFly]

Yeah, sure, strip out energy and food, you know, those things people need to SURVIVE, and everything is great!!

Who cares that every time I got the grocery store I'm paying more than I did last time, and likewise with gas.

Actually, why didn't I think of this? I'm stripping food and energy from my budget from here on out. That's saving me about a G per month. I can go on vacation now!

The CPI strips out Taxes, Food, Energy & Housing. As you said those things people need to SURVIVE.

Well that's not true. Food, housing and energy make up about 60% of the CPI. Obviously taxes aren't included because it's a price index, not a standard of living index.

Bottom line is the true cost of living inflation has been over 8.5% since we went off of the gold standard in 1971. The fake ass CPI uses substitution, tricks & lies claiming there is only 2.2% inflation.

 

[itfitzme]

The CPI strips out Taxes, Food, Energy & Housing. As you said those things people need to SURVIVE.

Well that's not true. Food, housing and energy make up about 60% of the CPI. Obviously taxes aren't included because it's a price index, not a standard of living index.

Bottom line is the true cost of living inflation has been over 8.5% since we went off of the gold standard in 1971. The fake ass CPI uses substitution, tricks & lies claiming there is only 2.2% inflation.

Now this is one of the most ridiculous statements I've ever read.

If, in fact, the "real" cost of living has been 8.5% a year since 1977, then it would be 1638% over the total 35 years.

Gasoline was $0.62 a gallon in 1977. That would put it at $10.15 at the pump today.

Milk was $1.68 a gallon and would now cost $27 a gallon.

Gasoline doesn't cost $10.15 and milk doesn't cost $27.

Good god man, you should move to a different area.

 

[itfitzme]

Of course, inflation isn't the only concern. If income doesn't keep up then it is effectivley higher. I prefer something more like a spending power index. The wage data for unskilled labor or minimum wage divided by CPI works because it gives the hourly rate in real dollars. It doesn't, though, consider things like medical and dental benefits or the fact that some professions will see six months of unemployment or more between 4 year contracts. And six months of unemployment can burn through a heck of a lot of savings.

 

[FireFly]

Well that's not true. Food, housing and energy make up about 60% of the CPI. Obviously taxes aren't included because it's a price index, not a standard of living index.

Bottom line is the true cost of living inflation has been over 8.5% since we went off of the gold standard in 1971. The fake ass CPI uses substitution, tricks & lies claiming there is only 2.2% inflation.

Now this is one of the most ridiculous statements I've ever read.

If, in fact, the "real" cost of living has been 8.5% a year since 1977, then it would be 1638% over the total 35 years.

Gasoline was $0.62 a gallon in 1977. That would put it at $10.15 at the pump today.

Milk was $1.68 a gallon and would now cost $27 a gallon.

Gasoline doesn't cost $10.15 and milk doesn't cost $27.

Good god man, you should move to a different area.

The CPI only showed 2.2% inflation from 2002 to 2008 when these basics of civilization & life tripled in price. Oil, Gas, Fertilizer, Farm Land, Raw Land, Corn, Soybeans, Wheat, Hamburger, Houses, Electricity, Water, Trash, Sewer, Property Taxes, Copper, Silver, Steel, Concrete, Asphalt, Rubber, etc. Over this same period Healthcare rose 9.5% annually & Education rose 6% annually.

 

[samjones]

Being on a gold standard but not following the rules of the gold standard in place at the time caused the Great Depression. When libertarians say they want a gold standard they presumably mean one in which the rules are followed.

A gold standard is, "A monetary standard under which the basic unit of currency is equal in value to and exchangeable for a specified amount of gold."

of course that is childishly simplistic particularly when you run a gold standard and a central bank. In the language or our time Milton Friedman said, a failure to follow the rules of the gold standard in the face of bank runs caused the Great Depression.

Is there anyone that knows what your talking about except you?

All the Ron Paul Whackjobs seem to understand each other perfectly, somehow.

 

[itfitzme]

These basics of civilization & life tripled in price.

In order for "2002 to 2008 .... tripled in price" to be correct, at 300% for 2008-2001 = 7 years, the CPI would be 21.9% per year. To get there, we use (1+r)^(1/i) -1 = yearly rate.

Your own graph doesn't show "tripled in price" or 22% per year.

As your basic standard is that because the CPI-U doesn't reflect your preferred measure as shown in the graph, the BEA is therefore lying.

By this standard, you are also lying. By extention, you are lying about the BEA lying. Ergo, the BEA is being honest.

So what good are you?

 

[itfitzme]

..Bottom line is the true cost of living inflation has been over 8.5% since we went off of the gold standard in 1971.

-----------------------------------------------------------------
The bottom line is that the cost of living hasn't been 8.5% since we went of the gold standard in 1971.

 

[EdwardBaiamonte]

Is there anyone that knows what your talking about except you?

you said we had a gold standard and a Depression so a gold standard did not work.

I explained to you that we had a gold standard in name only so you could blame the Depression only on a gold standard in name only, not on a genuine gold standard.

Easy enough for you?

 

[itfitzme]

Is there anyone that knows what your talking about except you?

you said we had a gold standard and a Depression so a gold standard did not work.

I explained to you that we had a gold standard in name only so you could blame the Depression only on a gold standard in name only, not on a genuine gold standard.

Easy enough for you?

And I proved that the dollar and gold were pegged together. I proved that it wasn't in name only, but was actually in effect.

Easy enough for you?

 

[EdwardBaiamonte]

Is there anyone that knows what your talking about except you?

you said we had a gold standard and a Depression so a gold standard did not work.

I explained to you that we had a gold standard in name only so you could blame the Depression only on a gold standard in name only, not on a genuine gold standard.

Easy enough for you?

And I proved that the dollar and gold were pegged together. I proved that it wasn't in name only, but was actually in effect.

Easy enough for you?

if they were "pegged" together how could you have a massive loss of money?

 

[itfitzme]

Is there anyone that knows what your talking about except you?

you said we had a gold standard and a Depression so a gold standard did not work.

I explained to you that we had a gold standard in name only so you could blame the Depression only on a gold standard in name only, not on a genuine gold standard.

Easy enough for you?

Your saying that a gold standard guarantees no business cycle. So, because there was the Great Depression proves that there was no gold standard.

Your hypothesis: A gold standard guarantees no business cycle.
Your facts: There was a business cycle.
Conclusion: There was no gold standard.

The problem is that you haven't proven that "A gold standard guarantees no business cycle." You are assuming that a gold standard guarantees no business cycle.

Here is what I am saying;

My hypothesis: There was a gold standard
Fact: The price of gold was pegged to the dollar
Conclusion: There was a gold standard.

Second hypothesis

My hypothesis: A gold standard guarantees no business cycles
Fact: There was a gold standard and there was a Great Depression
Conclusion: A gold standard doesn't guarantee no business cycles

See what I did? I proved that 1) there was a gold standard then 2) that it doesn't guarantee no business cycles.

See how that works or is that too complicated for you?