Financial topics

[John]

** 11-Aug-2021 World View: Computing inflation

> Do you realize that the government has changed and constantly
> changes the CPI? It has also happened more frequently, for
> whatever reason, during the last 40 years.

Let me try this a different way that should (if there's any sense left
in the world) end the argument.

The Consumer Price Index (CPI) is a data series that has been
published for a long time by the Labor Department.

I am applying the Law of Reversion of the Mean to this series,
combined with observations about public debt, the velocity of money,
and generational era. This is pretty much a mathematical,
non-ideological, completely mechanical calculation. I actually have
no dog in this fight other than to use these mathematical tools and
report the result. If the CPI were to jump to hyperinflationary
levels, then my tools would be wrong and I'd have to reexamine the
tools, but so far that hasn't been necessary.

I agree that changes to the CPI are relevant to the methodology I use,
but so far this hasn't been a problem. In particular, if the Labor
Dept "miscomputes" the CPI in the same way every month, then the Law
of Reversion of the Mean should still apply. To put it another way,
if the Labor Dept uses a mathematical, non-ideological, completely
mechanical method for computing the CPI each month, and the CPI is
wrong in the same way each month, then the methology that I use should
still work.

Questions like whether I personally have ever had a decrease in living
expenses are perhaps interesting (though invasive), but irrelevant.
The methodology that I use is not affected by my personal living
expenses.

So my point is that you may have a completely different way of
computing inflation. Your way of computing inflation may include
measuring your own living expenses, or the living expenses of others.
That's fine, but irrelevant to my computation. If, by chance, you've
compiled the values of your version of inflation each month for the
last few decades, then post the results and I'll try applying the Law
of the Reversion of the Mean to your data series, and see what we come
up with.

[Cool Breeze]

Ok. The point has always been that "CPI" to state this again, is a measure of something; it's just not a particular good measurement of what inflation means to the average person, which is "cost of living" in total. Of course, for most people, this has far exceeded CPI, which is why the back and forth here occurs. You go with CPI in order to (like the government) support the conclusion you want, which is that inflation isn't really happening all that much, or that it won't last, etc.

Notice that the government never wants to tell you that things are inflating, because then they will influence behavior that will cause more a feedback loop on even more inflation (prices will go up so I better buy now while the Feds don't crush my purchasing power).

Does that finally make sense, in summary? It's pretty basic. Watch a Rick Rule video, or check out several financial experts such as Rob Arnott on Kitco recently. There are many very smart people who make this case, but it's not because they are smart that it most accurately fits reality, it's because their logic (and mine) are sound in explaining what is going on as a matter of the facts on the ground. It's our ideas that are accurate; it doesn't have to do with us being messengers - but yes people should listen to people who frequently get things right because that shows that they are solid in critical thinking and assessing reality.

[aeden]

https://nworeport.files.wordpress.com/2 ... ge-534.png
LCS in full attack mode.

Pierre-Alain Eltschinger, a spokesman for the Swiss Department of Foreign Affairs, said the comments were
“wrongly presented as coming from a Swiss biologist”.

“Several Chinese newspapers have since pulled down those comments,” he said in an email, without specifying.

Meanwhile, the biggest "crusader" against fake news - the propaganda central that is Facebook.

According to the SCMP, several Chinese newspaper websites removed comments about the coronavirus pandemic that were “wrongly presented” as coming from a Swiss biologist who does not appear to exist, Switzerland ’s foreign ministry said Wednesday.

The guy does not even exist. These damn fools pump a system impossible to separate from the LCS insanity also.
No sack exists in the swamp. Zero.

[Tom Mazanec]

Well, if 5.4% a year is the “regression to the mean” then in a few decades we will be a nation of poor millionaires.

[aeden]

Samuel Shen and Kane Wu agree on obscure.

Roughly speaking, it's the gap between the rates of growth in money supply and
gross domestic product, an indicator known to eco-geeks as Marshallian K. It just turned
negative for the first time since 2018, 8h ago. Benzinga.

https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp696.pdf 2006

This paper endeavours to provide a comprehensive analysis of the nature and the possible
importance of “global excess liquidity”, a concept which has attracted considerable attention
in recent years. The contribution of this paper is threefold. First, we present some conceptual
discussion on the meaning of excess liquidity in advanced countries with developed financial
markets. Second, we report some descriptive analysis on the degree of co-movement of
several possible measures of excess liquidity and spill-overs between them for a relatively
large sample of industrialised and developing countries. Third, we estimate a VAR model for
an aggregate of the major industrialised countries and analyse the transmission of shocks to
global excess liquidity to the global economy, including possible cross-border spill-over
effects to a number of domestic variables in the world’s three largest economies (the US, the
euro area and Japan).
Keywords: Global excess liquidity, monetary policy, open economy, international
economics.

Capex secured but I took a week of since we have many souls in need elsewhere.
I will check l8ter next week if we made the cut for country 25 for goods and services unmolested.

Working Paper Series No 696 November 2006
JEL classification codes: E52, F42

https://www.nasdaq.com/market-activity/commodities/lbs <-------- shall we beat them all with a 2 x4 for
regression analysis we noted clearly for regression to the mean.

I will create some fiat from credit since I will build as indicated soon.
Last time Antifa was going to eat Turtle but we discussed that also about this window as such here.

water wheat weather

They lie to you every day.

If it was me I would focus on treatments that are real and not producing golden calf variants.

"When I shut up the heavens so that there is no rain, or command locusts to devour the land or send a plague among my people,
if my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways,
then I will hear from heaven, and I will forgive their sin and will heal their land."

https://www.youtube.com/watch?v=diTmxxmSf1Q

[vincecate]

"The numbers: U.S. wholesale prices rose sharply in July for the sixth month in a row and offered little evidence that a big wave of inflation is on the verge of cresting.

The producer price index jumped 1% last month, the government said Thursday. Economists polled by The Wall Street Journal had forecast a 0.6% advance.

Most of the increase was concentrated in services such as passenger fares and hotel rooms amid a surge in travel this summer. Wholesale auto prices have also risen sharply due to strong demand and carmakers not being able to produce enough vehicles.

The pace of wholesale inflation over the past 12 months moved up to 7.8% from 7.3%. That’s the highest level since the index was reconfigured in 2010, and likely one of the highest readings since the early 1980s."

https://www.marketwatch.com/story/u-s-w ... 1628772476

[vincecate]

I made a log scale plot of the PPI. On this scale the PPI went up about 0.8 in the 10 years of the 1970s. It has gone up about 0.2 in the last 16 months, and about 0.3 in the last 3 years. The 0.2 or 0.3 is roughly comparable to each of the 4 decades since 1980.

https://fred.stlouisfed.org/graph/?g=G4HC

[FullMoon]

Steel prices have doubled this year according to some friends who manufacture domestically with the cheapest available steel which is imported. While they may pass along the price increase, their sales are reduced. I'm selling 19' inventory without increase and sales are up a lot. People will gravitate to the affordable goods, whatever they can get. They're consumers and addicted to spending. But their income is flat regardless. I'm betting they'll cut consumption with the next leg down.

[vincecate]

Steel prices have doubled this year according to some friends who manufacture domestically with the cheapest available steel which is imported.

Yes, about about a factor of 2 in just 1 year:
https://fred.stlouisfed.org/graph/?g=G4PW

Note that in the whole of the 1970s steel went up about a factor of 2.6.

[aeden]

2024 Speculation

Unfortunately this is nothing but a distraction from the harsh reality that voting will do nothing to rectify the corrupt system that exists now.

Controlled opposition.

Smith-Mundt Modernization Act

1. x, y and z have property P.
2. x, y, and z belong to group G.
3. x, y, and z account for all the members of group G.
C. All members of group G have property P.
The conclusion of this statement is predicated on the third premise just as strongly as the other two premises.
Without it, the argument constitutes a fallacy of proof by example.

https://www.youtube.com/watch?v=-bHvk2hQXoY