Oh no some corrupt private corporation says america is a bankrupt piece of garbage and should die! This is the worst thing ever! Wait! Facts are here to save the day: 1. Inflation and treasury yields are still at near record lows! Treasury returns decreased shortly after SP farted in America's face. 2. SP gave a AAA rating to credit default swaps of home loans to minorities that we all hate, while accepting consulting fees from the companies who sold those terrible, terrible financial instruments that are somehow related to our current depression. If anyone knows anyone who works at S&P, I recommend giving them a stern talking-to.
Inflation is running at 3.6%. That is far from 'at near record lows'. Actually, it is three times higher then a year ago. And, except for three months - between Jan. '92 and Aug. '05, inflation was never above 3.6%. http://www.usinflationcalculator.com/inflation/historical-inflation-rates/
Did you include food and oil? Their price went up because of droughts and mid east revolutions. that is why "core inflation" is calculated without those two items. Because we are trying to measure the negative effects of a high money supply. A high money supply did not cause food and oil prices to go up, I promise you. Core inflation is below 2%, has been for a while. Am I wrong?
I could care less what the 'core' is. Do you think most people eat or use gasoline on a regular basis? If the answer is yes - then they are part of inflation. 'The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in July on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.6 percent before seasonal adjustment.' http://www.bls.gov/news.release/cpi.nr0.htm
I am shocked that you deliberately deleted the only important part of my post, sir. I will type it again for you: That matters. Do you think monetary policy or printing money had a large effect on those prices increasing above 2%? If not (the answer is no), how would those numbers be used to give advice on monetary policy? I mean, printing money, combined with the money-hoarding effect of a low aggregate demand recession, has resulted in a net increase in prices of less than 2% COMBINE WITH THAT the effect of a decrease in the supply of food and a decrease in the supply of oil (caused by droughts and unrest) and you get some other number, like 3.whatever That new number is not related to monetary policy. That is what I am saying. Sure, it is a change in prices, but it has nothing to do with printing money. Solve the droughts and unrest and you will see more deflation than stopping government spending. Yes?
To you, not to me. I have zero interest in some long theoretical debate about the 'core' vs. the 'full' CPI. The full CPI is 3.6%. The 'core' version means almost nothing to me. Period.
Um, .... are we talking about monetary policy and the effect of printing money on prices? Or do you expect, nay- DEMAND, that the government forcefully cause deflation in order to counteract the inflationary effects of droughts and middle east unrest? Because droughts and middle east unrest will occasionally cause inflation. Please understand that it is not an opinion that "food and oil prices change for reasons other than printing money more than they change because of printing money" This is not an opinion. If you want to know about the negative effects of printing money, you have to "control for externalities." By that I mean, you need to remove "externalities" from your observation. Let's imagine that we are observing the trend in television prices over time. We see that when a new model comes out, all of the old models decrease in price. Looks like a solid way to interpret that "data" Then a hurricane destroys literally half of all televisions in the world. The price of televisions go up, because of you know, supply and demand, this is the economics forum, you know. If we are trying to measure the patterns that we can see in "television prices, as determined by changes in technology" should we include hurricane damage in that study? Hurricanes are to the natural changes in technology prices as Droughts and middle east unrest are to printing money Entirely unrelated. Please understand. Are we talking about printing money? I'm sorry if we aren't
Oh I am dreadfully sorry, I just happened to read this in the second post of the thread: I apologize for MY CONFUSION. I thought this statement was referring to how monetary policy will now change as a result of household spending. (edit- oops I assumed I must not have been in the S&P thread, based on your last statement but it turns out I am. Interesting.) I put forward the zany proposition, agreed upon by really all economists, that monetary policy will not help with food and oil when there is a drought and middle east unrest going on. Please continue whatever discussion you think you are having with the others. Also the title of the thread is in regards to treasury bonds and their value, as judged by one, single, corrupt private corporation. Am I just not welcome here?
Well that's interesting, because that's exactly what I am trying to say the opposite of. Question for you: What effect have recent and serious droughts had on inflation in America? What effect has the recent unrest in the middle east had on oil prices? Zero? Non zero? Take your answer and subtract it from headline inflation. Will you see that prices of food and oil increased anyway? Yes you will. The theory is that they will have increased at about the same rate as core inflation. In order for you two to sit here, arms crossed, and disagree with the establishment of tweed suit wearing (*)(*)(*)(*)(*)(*)bags like me, you need to describe how there is NOT a 1.6% increase in the price of food and oil caused by droughts and the middle easy. I mean, if QE caused headline inflation, why would it cause it to be so much higher for those two goods, food and oil, and not so much higher for the average of all other goods? Why would QE money printing focus so much on food and oil, and when food and oil are removed from the equation, the inflation number goes from 3.6% to under 2%~!??!?! Why would they inflate more!?!?
droughts and other such factors are always temporary...once the peoblem is resolved prices should come back to their former levels....not so with money printing....prices are bid up and they tend to stay up....as happened in the 70's and again is happening now!
YES EXACTLY LOL (-except the comparison to the 70s, I believe that was caused by an oil embargo, a situation much worse than what we have here) I am glad that we agree, and thank you for your honesty. Let's see what happens when the effects of middle east unrest and droughts go away. Or, alternatively, let's look at the effects of inflation on other goods which are not so quickly affected by "externalities" like that
Here's a new set of questions for you: Are houses more expensive? Are computers more expensive? Are goods besides food and oil more expensive (besides goldlol)?
uhmmmm in the 70's the price of oil mostly went up because the fed was monetizing the vietnam war.......after the embargo ended...did prices come back down? No they didn't.....but after the high interest rates of 1980 prices stabalized but did not come down much!
transit fares are up....so are air fares....so are university tuitions....I believe insurance costs more too.. along with utility bills....it seems the only thing that did not go up is electronics LOL nice try though
nice try to you as well Transportation/airplanes use oil. I believe that is actually the most important determinant of that price. Same with utilities of course. University is a funny thing, it does well during a recession because customers want to make sure their kids don't have to deal with this crap. I don't think that made the price rise in this case, though. The price of university has been skyrocketing for reasons that need another thread to describe. Insurance costs going up is interesting. One thing I will give republicans is that medical malpractice costs are too high and something should be done, like nationalizing the entire concept of insurance, since there is very little that the free market can do to make the concept of insurance better, besides make the bureaucracy more efficient I guess. Or whatever, tort reform fine. How about the cost of wood? Steel? S&P GLOBAL TIMBER & FORESTRY INDEX FUND - from my etrade account Peaked at about $47 per share in mid 2008. Now it is at about $36 MARKET VECTORS STEEL ETF Peaked at about $104 per share in mid 2008, now it is at about $55 I don't think you folks really know what inflation looks like. Don't you remember how much worse the 70s are than today?
What has Bernanke said that you would call "propaganda"? Do you have a statement you can quote from him which seems slightly incorrect? Do you have a chart indicating that his activity has caused prices to do.... some.... thing.... that you can describe? Do you know things? please view the following thread, which was made in direct response to a post from you, similar to the one you just gave me: http://www.politicalforum.com/economics-trade/190419-will-there-qe-3-a-34.html I embedded a chart into the post itself and also linked to another chart! Charts are so much fun! Yes I am serious.
