[Rhodes22-list] Economics - More Good News

[Brad Haslett]

Ok Stan,

I'm bored and that's a big juicy lure you just tossed in the water.  Where
do you see inflation other than raw materials and energy?  The market just
passed the 14,000 mark briefly today, partly because of the good inflation
news.  Rising home prices (that bubble is over for now) and rising stock
prices are not part of the CPI because rents, or equivalent rents, do not
directly follow market values for real estate and equity prices have no
effect on the cost of living.  A lot of folks disagree with the methodology
of CPI measurement, but the BLS (folks who produce the number) is a huge
bureaucracy with career employees (meaning Democrats) who have no interest
in fudging the numbers for the current administration.  Ok, jerk the line
now!

Brad

On 7/17/07, stan <stan at rhodes22.com> wrote:
>
> Brad,
>
> I have not been as fortunate in having a chance to learn economics - that
> may be a disadvantage as to the "Why",  but I am not disadvantaged as to
> the
> facts:  The Inflation of the past 2 or 3 years has not been this bad since
> the Carter administration.
>
> Thanks Ed, but I am busy and these breaks are just for comic relief.
>
> ss
>
> ----- Original Message -----
> From: "Brad Haslett" <flybrad at gmail.com>
> To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
> Sent: Monday, July 16, 2007 5:13 PM
> Subject: Re: [Rhodes22-list] Economics - More Good News
>
>
> > Dave,
> >
> > You are starting to bore me with your "there's a government boogieman"
> > approach to every issue.  I hated studying economics in undergrad and
> grad
> > school and I'll be damned if I'm going to teach it.  Have a nice day!
> >
> > Brad
> >
> > On 7/16/07, DCLewis1 at aol.com <DCLewis1 at aol.com> wrote:
> >>
> >>
> >> In a message dated 7/16/2007 6:21:34 A.M. Eastern Daylight Time,
> >> flybrad at gmail.com writes:
> >>
> >> The  prime result of 'printing' money is inflation.  Inflation is low.
> >> Show
> >> me the money!
> >>
> >> Brad
> >>
> >>
> >>
> >>
> >>
> >> Brad,
> >>
> >> Inflation is low?  The price of my house, and probably your
> >> house,  doubled
> >> in the last 6 years.  That's more than 12%/yr compounded  appreciation.
> >> I
> >> believe housing is about 1/3 of the CPI, so if the price  of nothing
> else
> >> at all
> >> increased over the last 6 years you have minimum of  4% inflation per
> >> year
> >> -
> >> the Feds have been claiming 2.5% to 3% growth in the CPI  this year and
> >> less in
> >> earlier years.  But in addition we know the price of  gas has more than
> >> doubled in that time frame, again that's more than 12%/yr; gas  won't
> >> have
> >> nearly
> >> the same weighting in the CPI as housing, but it will  add.  And
> >> virtually
> >> every other component in the CPI will add as well,  except for
> underwear
> >> made in
> >> China.  There is absolutely no way inflation  is even roughly what the
> >> Feds are
> >> claiming.  They distinguish between  "core" inflation and "non-core"
> >> inflation, it's BS - from your and my  perspective there is only
> >> inflation
> >> and the
> >> number they report should have the  qualifier "would you
> believe?".  They
> >> tell
> >> you inflation is "contained" -  what in the world does that mean?  My
> >> guess
> >> is that inflation is at least  5%, maybe more - actually, in
> Greenspan's
> >> last
> >> years I think inflation  approached 10%, because of housing inflation.
> >> If
> >> your income and the price  of all your goods and chattels have not
> >> increased
> >> dramatically over the past 6  years, you've fallen behind.
> >>
> >> Your government does very well when they under report inflation.   The
> >> leadership looks good.  At least as important as looking good,
> it  allows
> >> them to
> >> inflate out of the fiscal mess they have created.  Example:  income tax
> >> receipts
> >> are intrinsically indexed to inflation (unless the $ is  moving
> abroad),
> >> but
> >> by understating inflation they can provide a reduced COLA to  all those
> >> military and government pensions they have to fund - over time
> >> the  government will
> >> do all right, and the retirees will be impoverished.  It  works!
> >> Example:
> >> if
> >> the gap between real inflation and the CPI were 2% to  3% (the Fed is
> >> currently reporting inflation of 2% to 3%, I claim it's at least  5%,
> the
> >> gap is 2% to
> >> 3%) the value of a military retirees pension would decrease  by 16% to
> >> 24%
> >> in
> >> constant dollars after 8 years.  The military retirement  system looks
> >> extremely generous, but the Feds have figured out how to inflate  the
> >> burden away.
> >> Of course people with private pensions have similar, and  generally
> >> worse,
> >> problems.
> >>
> >> Seriously, we need a independent organization that will
> track  inflation.
> >> The government has a massive vested interest in reporting low  numbers
> >> and
> >> it
> >> has been a lot less than straightforward with the
> American  people.  You
> >> can't
> >> believe their CPI numbers.  Don't believe me do  your own due
> diligence,
> >> dig
> >> out some medical bills, or gas receipts, check out  your home
> assessment,
> >> property tax, etc from 5 or 6 years ago, and compare  against your
> >> current
> >> costs, you
> >> 'll see that I'm not making this stuff up.
> >>
> >> One down side to reporting accurate inflation numbers might be that the
> >> general public would see how bad the situation really is and they might
> >> bail out
> >> of the US dollar.  That could really kill the economy.
> >>
> >> Ed's claim is the inflation is a result of competition from China and
> >> India
> >> for commodities, there is  measure of truth in that.  But it also
> >> appears
> >> your government has been running it's printing presses
> >> overtime,  increasing the
> >> money supply - perhaps to help fund the war in Iraq etc and  still have
> a
> >> tax
> >> cut - that's a guaranteed way to generate inflation (and kill  the
> >> foreign
> >> exchange rate, which is being killed) - of course, if they tell
> >> you  there's no
> >> inflation, there's no inflation, right?.  Finally, we have  started to
> >> import
> >> inflation from China, India, etc - early on the impact of  China, India
> >> etc was
> >> deflationary (i.e. cheap goods) but now wages are going up  as those
> >> countries develop - wages are still cheap, but not as cheap - and
> >> we're  seeing that
> >> inflation as we import those goods and services.  I think this  last
> >> effect is
> >> particularly obvious in the Indian based software and software  support
> >> service sector.  Part of the "joy" associated with the development  of
> a
> >> complex
> >> global economy is that the US becomes vulnerable to events
> >> and  circumstances we
> >> can't control - importing inflation from India and  China is an
> example.
> >>
> >> As for giving the president line item veto authority - I once thought
> >> that
> >> would work, but Mr Bush is a case study showing it won't work.  If it's
> >> not  a
> >> faith based issue or about the war in Iraq there's no suggestion he'd
> >> veto
> >> anything.  I can't think of a single thing he's done to try to
> >> control  spending
> >> or balance the budget,  that's why he's called a  new-conservative.
> >>
> >> Finally, as for the US debt/GNP being no worse than France - I'm
> >> perplexed
> >> that you would make that comparison.  I never thought you'd hold
> up  the
> >> pseudo-Socialist government of France as a benchmark.   I remember  the
> >> day in my
> >> youth that the government of France declared bankruptcy.  We  should do
> >> better.
> >>
> >> Dave
> >>
> >>
> >>
> >> ************************************** Get a sneak peak of the all-new
> >> AOL
> >> at
> >> http://discover.aol.com/memed/aolcom30tour
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