"There's no inflation."

[DFF]

I keep hearing this, but if it's true, then WHY is the DBA powershares agricultural fund (which is comprised of wheat, corn, oats, soy, coffee, oj, cattle, and hog futures) up 20% since Jan 1st?

 

[acptulsa]

I keep hearing this, but if it's true, then WHY is the DBA powershares agricultural fund (which is comprised of wheat, corn, oats, soy, coffee, oj, cattle, and hog futures) up 20% since Jan 1st?

Silly mundane. Rising food and energy prices aren't inflation. They may be a sign that the petrodollar is crashing and your standard of living is going with it, but so long as the fedgov says that's not inflation, then that's not inflation.

And they have lots of guns, so you ought not argue.

 

[Madison320]

I think the fact that the govt under reports price inflation is only a small part of the story. The much bigger story is that prices have yet to catch up with the massive money printing. I don't know how long that will take, but prices will catch up eventually. And the longer it takes the more dramatic the price increases will be.

 

[Dr. Dog]

Commodity futures aren't the same thing as consumer prices.

Right now inflation is very low, you can't deny it.

 

[Mini-Me]

Commodity futures aren't the same thing as consumer prices.

Right now inflation is very low, you can't deny it.

That's why the dollar menu is now the dollar-eighty menu, amiright?
The CPI has been redefined several times, and it lies. That's far from the best article I've seen on the subject, but it's the one I found fastest.
http://www.shadowstats.com/alternate_data/inflation-charts

As a side note, even when the inflation of prices appears to be zero, there is often still hidden inflation canceling out the gradual price deflation that should occur as production and economic output increase. (But OMG, what about the mythical deflationary spiral that assumes the average person's time preference is around zero?!? )

 

[DFF]

Commodity futures aren't the same thing as consumer prices.

Right now inflation is very low, you can't deny it.

Your right. Rising commodity prices are no big deal, and will only effect those who drink coffee and orange juice, eat beef and pork, eat cereal and oats, and who use sugar. Everyone else will be just fine.

 

[DamianTV]

Easy fix, just Export our Inflation to other countries! Oh, thats whats starting all these wars? Propping up the Petro Dollar? Maybe I was wrong...

 

[FindLiberty]

Rising prices are always caused by too much freedom and unlimited non-gov corporate greed.

More regulation and bailouts are the answer...

Take healthcare.gov, please

 

[Zippyjuan]

Since the average person spends about eleven percent of their income on food, food prices count as eleven percent of the CPI. Let's show how this works. The CPI index is 100 in our example. The prices of food doubles but all other prices stay the same. What is the overall inflation rate? 100%? No. The index will go from 100 to 111 (an increase of eleven in the food costs) or an overall price inflation rate of eleven percent. Food prices can move more than the overall price inflation rate unless all other prices are also going up by that same amount.

 

[Cabal]

Right now inflation is very low, you can't deny it.

 

[Cap]

Commodity futures aren't the same thing as consumer prices.

Right now inflation is very low, you can't deny it.

Who's sock puppet are you?

 

[erowe1]

I keep hearing this, but if it's true, then WHY is the DBA powershares agricultural fund (which is comprised of wheat, corn, oats, soy, coffee, oj, cattle, and hog futures) up 20% since Jan 1st?

Would you use the price of DBA to argue that there was deflation for the 3 years prior to Jan. 1st of this year, and that the inflation you're arguing for has not yet made up for even half of that deflation?

http://finance.yahoo.com/echarts?s=DBA+Interactive#symbol=DBA;range=5y

In fact, if you use a moving average on that chart to tone down the volatility, you can see that the recent uptick this year hardly mitigates the overall trend of deflation over the past several years at all.

 

[Carson]

"There's no inflation."

DFF,

Wise man. Nobody wants to rock the boat.



I've got a little secret though. Or I could be just full of it. Maybe better not tell.



Part of inflation isn't just the price your watching as you reach out to meet it. Part of the trouble is it is like we are standing on a rug that is being pulled in the other direction.

Say you have a candy bar that fifty years ago used to be 5¢ and now it's 10¢. That would be inflating at an average of 2% a year for fifty years.

Every year you stretch your budget. (Being an (ass). I'm thinking this is what 2% inflation looks like. Lots of people say that is what it is.) (/ass)


Now take a look at one other part of our dilemma.


"The estimated population of the United States is 317,869,734
so each citizen's share of this debt is $55,211.34."

Paying the debt on this is part of the inflation when you consider this is part of what is propelling the carpet in the other direction and adding to your inflation figure.

If your one of the people working and paying on such things it could be more like $165,634.02.


Another part of the dilemma is that whenever they fire up the fake money presses it inflates everything. Even the stuff you own!

Lots of people say for retirement buying stocks. I'm thinking they are the best indication of inflation. I used to think Robert Sahr's chart showing inflation was the best. After watching I now think the Dow Jones Industrial average is. It is a group of, I guess you'd call them blue chip stocks. I'm thinking that means they are solid stocks. Ones that are like gold or silver in the way they perform. Rock solid decade to decade. After watching, I think the very fact of what they are means they adjust to inflation like their reputation requires it.

Check out how this chart of Robert Sahr's looks. He based it on the Consumer Price Index.

Notice during times of war, even before we had central bank the government was introducing worth less currency and devaluing the real money. People were smarter back then before the Idiocracy. Lots of times people didn't want to get stiffed with it. Even smarter still back in Sir Isaac Newton's time. Sometimes they would draw a quarter you for it. I think they just got tired of trying to talk sense to them.

"As Warden, and afterwards Master, of the Royal Mint, Newton estimated that 20 percent of the coins taken in during The Great Recoinage of 1696 were counterfeit. Counterfeiting was high treason, punishable by the felon's being hanged, drawn and quartered."


Now compare Robert Sahr's chart with this one of the Dow Jones Industrial average.

Notice how the DOW goes from 500 to about 13,000 at about the same time Robert's chart goes from $5.00 to $130.00. It's proportional. If the DOW was one hundred stocks it would average dollar for dollar.

Anyway that also may be part of what is dragging you in the other direction and you might not be aware because you distracted looking at your candy bar inflating sort of harmless like.

That is just a small fraction of the dilemma. The counterfeiting is pushing and pulling at everything.

It's insidious.

Maybe this will help.

 

[Carson]

P.S. I thinking the Dow Jones Industrial average is so tight with inflation I can almost taste the future looking in to its gigantic crystal balls.

Check out this one and see if you can feel it too.

Maybe the other charts span to much time or just don't speak to some of you. This one clearly tells us just where we top out and can no longer function trying to make ends meet.

See the Dot Com bubble? See the Housing Market crash? With a trained eye you may be able to see others. Mind you every crash isn't isolated to Silicon Valley stuff or purely housing.

What I'm thinking happens is there are those that can fire up the fake money presses and print up what ever it takes to get their way. That socializes a lot of stuff. I'm thinking it acts as a form of back door stealth socialism that sucks the life out of the capital that capitalism needs to function. That is the top of those peaks.

The currency gets so devalued that people can no longer make ends meet. They quit. Well may not so much quit but it just know longer pays.

Loans get defaulted on. Money or debt crashes out of the system. That is the line dropping.


The line takes a free fall. The currency starts regaining its value. People say whoa! I can hire people and make money! Other say I can except you job and make money!

They go back to work. Morning traffic picks up.

Things might seem fine...


but Nooooooo...


The jackass's that made bad loans conspire with others and they bail themselves out. They shift their losses and make them your losses. The line going back up is the firing up of the fake money presses devaluing to currency again. Right back into the ceiling we go!

More lay offs.


I watched a mini crash cycle during Christmas this year. It would have been easy to have shorted stock if I'd have been up to speed. Then again ever being up to speed might not cut it. See how those lines top out? Each time a little higher. Perhaps only because the squeeze has burned off our fat. Maybe we've been squeezed and had so much fat burned off investing in the market may not play so well the next crash they hand us.


Hand???? Maybe the word is shove.

 

[Danke]

All the counties are printing money, so the dollar can actually be getting stronger (relatively) in the future. We then get deflation.

 

[Carson]

P.S.P.S.

If you understood what I was saying earlier about being able to see the future in the DOW chart, here is a link that should show an up to date chart from its original source.

http://www.barchart.com/chart.php?sym=%24DOWI&style=technical&template=&p=MO&d=X&sd=05%2F03%2F1970&ed=05%2F03%2F2013&size=L&log=0&t=CANDLE&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=&addindicator=&submitted=1&fpage=&txtDate=#jump

Off hand November 2014 people may be saying, Sorry Ron Paul. Now what was that you were saying?..Sir.

 

[DFF]

Since the average person spends about eleven percent of their income on food, food prices count as eleven percent of the CPI. Let's show how this works. The CPI index is 100 in our example. The prices of food doubles but all other prices stay the same. What is the overall inflation rate? 100%? No. The index will go from 100 to 111 (an increase of eleven in the food costs) or an overall price inflation rate of eleven percent. Food prices can move more than the overall price inflation rate unless all other prices are also going up by that same amount.

Which CPI are you referring to? Certainly not the governments, because it excludes food and energy costs.

http://moneymorning.com/2011/03/17/hidden-inflation-why-prices-are-rising-faster-than-you-think/#

 

[KCIndy]

Very, very, simple. The government CHEATS with the numbers.

Big surprise, eh?

From Bankrate.com:

http://www.bankrate.com/finance/personal-finance/is-inflation-higher-than-you-think-1.aspx

To measure the cost of living for consumers and come up with the Consumer Price Index, the Bureau of Labor Statistics prices everything consumers spend money on. Then all of the expenditures are categorized and weighted based on the amount that the average consumer spends on those categories. The percentage change from month to month is the rate of inflation, and it's usually expressed as an annualized number.

The all-items inflation rate represents everything people spend money on: haircuts, plane tickets, medical care, clothes -- you name it. But, that number is puffed up by the pesky necessities -- food and energy. So those two categories are discarded when calculating the core inflation rate.

Edit: doggone it, I step away from the keyboard long enough to make a sandwich and DFF beats me to the punch!

 

[Zippyjuan]

Which CPI are you referring to? Certainly not the governments, because it excludes food and energy costs.

http://moneymorning.com/2011/03/17/hidden-inflation-why-prices-are-rising-faster-than-you-think/#

There is more than one CPI. The most cited one includes food and energy. "Core" CPI leaves those out because they can be more seasonally volitile. If a source is using the Core CPI, they usually mention that it does not include food and energy. If they just say the CPI, they are usually refering to the broader measure. Many media stories may mention both.

http://stats.bls.gov/cpi/cpifaq.htm#Question_13

Which index is the "Official CPI" reported in the media?

Our broadest and most comprehensive CPI is called the All Items Consumer Price Index for All Urban Consumers (CPI-U) for the U.S. City Average, 1982-84 = 100.

In addition to the All Items CPI, BLS publishes thousands of other consumer price indexes. One such index is called "All items less food and energy". Some users of CPI data use this index because food and energy prices are relatively volatile, and these users want to focus on what they perceive to be the "core" or "underlying" rate of inflation.

Again, while we publish many indexes, our broadest measure of inflation includes all items consumers purchase, including food and energy. In addition, when CPI data are reported, these data can be reported on a not seasonally adjusted basis as well as a seasonally adjusted basis. Often, the media will report some, or all, of the following:

1.Index level, not seasonally adjusted. (for example, May 2008 = 216.632).
2.12-month percent change, not seasonally adjusted. (for example, May 2007 to May 2008 = 4.2 percent).
3.1-month percent change on a seasonally adjusted basis. (for example, from April 2008 to May 2008 = 0.6 percent).
4.Annual rate of percent change so far this year (for example, from December 2007 to May 2008 if the rate of increase over the first 5 months of the year continued for the full year, after the removal of seasonal influences, the rise would be 4.0 percent).
5.annual rate based on the latest seasonally adjusted 1-month change. For example, if the rate from April 2008 to May 2008 continued for a full 12 months, then the rise, compounded, would be 8.1 percent.

Example this week in a Reuter's Press Release:
http://www.reuters.com/article/2014/03/18/us-usa-economy-idUSBREA2C13J20140318

(Reuters) - U.S. inflation was muted in February and housing starts fell for a third straight month, giving the Federal Reserve plenty of room to keep interest rates low even as it scales back the amount of money it is pumping into the economy.

The data, which came as the Fed opened a two-day policy meeting, painted a picture of sluggish economic growth in the first quarter as unseasonably cold weather disrupted activity. A jump in building permits last month, however, also offered cautious optimism for an acceleration once the weather warms up.

"The economy is not too hot and not too cold. Winter was a difficult season for housing and there are no signs that inflation is about to pick up in a meaningful way," said Thomas Costerg, an economist at Standard Chartered Bank in New York.

The Labor Department said its Consumer Price Index nudged up 0.1 percent for the second month in a row as a drop in gasoline prices offset the largest rise in the cost of food in nearly 2-1/2 years.

In the 12 months through February, consumer prices were up only 1.1 percent, slowing from a 1.6 percent rise in January. The February increase was the smallest in four months.

Stripping out the volatile energy and food components, the so-called core CPI rose 0.1 percent for a third straight month. Its 12-month gain held steady at 1.6 percent.

The Fed targets 2 percent inflation and it tracks an index that is running even lower than the CPI. With inflation falling short of their target, Fed officials are likely to bide their time before raising benchmark overnight rates from zero.

Nevertheless, they have indicated they will press forward with plans to wind down a separate bond-buying stimulus program.

Here they showed both figures.

 

[DFF]

Ok, if the broad CPI includes food and energy prices (which have both increased by a lot over the past few years), then why does it say there's basically no inflation?