True inflation figures?

[Original_Intent]

If inflation was truly over 10% we'd be in extreme recession right now. Bit of an overstatement.

No, inflation as measured by M3 is almost certainly at 10% if not higher.

The reasons much of that inflation has not shown up are:

a) many of the new dollars are exported, and therefore prices have not risen accordingly YET (when all those dollars come home we get many years of accumulated inflation at one shot)

b) By manipulating the CPI numbers - do you honestly believe that your cost of living (housing, food, fuel, EVERYTHING) has really only been going up at 3% per year? The CPI is so prone to manipulation it's sickening. They can arbitrarily exclude certain portions if they are "unusually high" during that period.

M3 numbers could not be manipulated and therefore the measure was changed to the CPI.

Also, over time with no inflation, prices DROP due to economies of scale and higher productivity. You know how US productivity goes up 5% every year? That should be reflected in a 5% drop in prices which we are robbed of due to inflation.

Switching the measure of inflation from M3 to CPI was a con job.

 

[truelies]

housing, food, fuel, EVERYTHING) has really only been going up at 3% per year? The CPI is so prone to manipulation it's sickening. .

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

From the analysis I have been able to do IF your spending is similar to the goods basket used by the CPI then the CPI is quite accurate. For me over 3 years motor fuel is up$50/month (I drive about 12000 miles/year) but rent & utilities have not budged. Food at home is up but rstaurant meals not much change. The place I am renting now in CPI adjusted dollars is markedly superior to the digs I lived in in this town 30 years ago AND CHEAPER in constant dollars. New housing??? The place I will move to shortly is a bargain compared to what I purchased 30 years ago.

Certainly if a person has a long commute to work and a couple three kids on $20K/yr thefuel and food costs are painful...........BUT those price jumps are coming mostly from an insane energy polcy NOT general inflation of the currency.

 

[Mahkato]

I strongly recommend the book The Politically Incorrect Guide to Capitalism by Robert Murphy. It's an excellent primer on this and relate subjects.

 

[davver]

Hmmmm, conditions 1871 - 1896 were rather harsh for the working/small farmer vast majority of Americans with frequent Panics that again for the little guy caused grief worse than the Great Depression. BTW what you are calling DEFLATION was if I am not mistakem merely a decline in what we now call CPI NOT a decline in Money Supply. One of the things that made the Great Depression so painful was the real decline in the Money Supply. No good comes from reducing the MS be it based on Gold or electrons in a computer entry. Fiat money is not a problem if the MS growth is geared to the economy's growth in output of Goods/Services.

1871-1896 was considered a time of great prosperity. Real GDP growth was phenominal and standards of living went up dramatically. For those that got themselves into debt (farmers buying land on credit) it was rough. But for a vast majority of the population, especially those living and working in the city. Under a full gold standard recessions are harsh but short and malinvestment is severely punished and disencouraged. The long run economic gains are undeniable, and the possibility to really devestating great depression scenerios is low.

And yes I used CPI to refer to deflation because that is what the post I was responding to did. Obviously the real money supply during that time didn't decrease (excluding the significant greenback issue form the civil war). Decreases in the money supply are devestating, but they are only possible under fractional reserve and fiat banking.

Fiat money is not a problem if the MS growth is geared to the economy's growth in output of Goods/Services.

This is true, but it requires central bankers to be omniscient. To know exactely what the growth rate should be, the interest rate should be, etc. This seems extremely unlikely if not impossible, and certainly prone to manipulation. Gold may not be perfect at creating stable prices, but it is the best thing we have.

 

[davver]

From the analysis I have been able to do IF your spending is similar to the goods basket used by the CPI then the CPI is quite accurate. For me over 3 years motor fuel is up$50/month (I drive about 12000 miles/year) but rent & utilities have not budged. Food at home is up but rstaurant meals not much change. The place I am renting now in CPI adjusted dollars is markedly superior to the digs I lived in in this town 30 years ago AND CHEAPER in constant dollars. New housing??? The place I will move to shortly is a bargain compared to what I purchased 30 years ago.

Certainly if a person has a long commute to work and a couple three kids on $20K/yr thefuel and food costs are painful...........BUT those price jumps are coming mostly from an insane energy polcy NOT general inflation of the currency.

If you follow the links I provided there are people who have done some really good work at putting togethor the CPI piece by piece. If you really think inflation in 3Q '07 was 0.8%, the lowest since Eisenhower, I think your a little of your rocker.

What is the price of gas compared to a few years ago?
What is the price of groceries compared to a few years ago?
Housing?
Education?
Health Care?

If you follow those links you can get some good data for each of those things.

 

[kylejack]

From the analysis I have been able to do IF your spending is similar to the goods basket used by the CPI then the CPI is quite accurate. For me over 3 years motor fuel is up$50/month (I drive about 12000 miles/year) but rent & utilities have not budged. Food at home is up but rstaurant meals not much change. The place I am renting now in CPI adjusted dollars is markedly superior to the digs I lived in in this town 30 years ago AND CHEAPER in constant dollars. New housing??? The place I will move to shortly is a bargain compared to what I purchased 30 years ago.

Certainly if a person has a long commute to work and a couple three kids on $20K/yr thefuel and food costs are painful...........BUT those price jumps are coming mostly from an insane energy polcy NOT general inflation of the currency.

You're new to the forums, so I'll give you some time to get acclimated before jumping all over your conclusions. When you are ready to receive it, the red pill is waiting. Your eyes are open. When your mind is as well and you've disarmed the defenses it has constructed, it will all make sense.

 

[kylejack]

If you follow the links I provided there are people who have done some really good work at putting togethor the CPI piece by piece. If you really think inflation in 3Q '07 was 0.8%, the lowest since Eisenhower, I think your a little of your rocker.

You're on the right track, but that last comment is slightly off, because to get the annual rate, you have to multiply that quarterly rate by 4, i.e. 3.2%. Still fallacious, but just to keep things straight.

 

[davver]

You're on the right track, but that last comment is slightly off, because to get the annual rate, you have to multiply that quarterly rate by 4, i.e. 3.2%. Still fallacious, but just to keep things straight.

No, they actually said 0.8% was YoY.

 

[MoneyWhereMyMouthIs2]

No, they actually said 0.8% was YoY.

That's like saying the sky isn't up. There's no way I can believe that.

 

[Original_Intent]

The real question is WHY did M3 become a secret and why did the Congress allow it? The printing presses have been going like mad for 20 years and most of it has gone overseas. When the world dumps the dollar we will see the true inflation of 10%+ per year x 20 years in a very short period of time.

 

[davver]

The Fed said they weren't going to publish M3 anymore. Congress did nothing. That's all folks.

If Paul gets into national debates and people wake up about the Fed we could get a real movement going.

 

[truelies]

You're new to the forums, so I'll give you some time to get acclimated before jumping all over your conclusions. When you are ready to receive it, the red pill is waiting. Your eyes are open. When your mind is as well and you've disarmed the defenses it has constructed, it will all make sense.

Well thanks for the forebearance, but ya know I was probably defending Liberty before your Momma met your Papa so give it your best shot.

 

[truelies]

If you follow the links I provided ...........

Now what LINKS would those be?