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Thread: Doing the math: what the FEDs 2% inflation goal and CPI fudging means for purchasing power

  1. #31

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    Quote Originally Posted by ababba View Post
    This is your attempt to have it both ways. Either calculating price inflation is a worthwhile endeavor and we can discuss it, or you disagree and we can go our separate ways.
    I'm helping someone right now with a budget. She is in pretty deep shit right now, living on a very small fixed income (pension). She's been on it for almost twenty years, and lived quite comfortably for the first ten. The last ten have been like living in a Star Wars trash compactor scene, as she is being squeezed and nibbled to death on all sides. We're waxing all kinds of creative now, working on substitutions, augmentations, etc., and I have already calculated her price inflation. You know, the ones that affect only her, that no fucking comfortably detached aggregate-thinker would even think to consider. I could feel just how real price inflation was (REGARDLESS OF ITS CAUSES) while grocery shopping with her last week--to the point where all I want to do is punch every price inflation obfuscationist in their daft little throats.

    So waddya think...should I take a copy of the CPI and a mountain of other manipulated obfuscating bullshit and talk to her about why her "true inflation signals" are fucked up, anomalous, in her imagination only, or somehow exceptional to some pointy-headed theoretical construct?

    So yes, I do remember that the point of this thread was that the OP wanted to say inflation is understated and IS destroying (NOT fucking "going to destroy") purchasing power of individuals. I do agree that there are ways of approximating it or getting a good sense of what it is. Why? Because I have felt it personally, firsthand, and have been fucking living it by proxy through others, practically all my life. What I REJECT are all the reality-disconnected and convoluted ways that government and academics call piss on everyone's heads rain (and with straight faces, no less).

    Every time I hear someone try to talk reality with those who are affected first, most, and most adversely by MONETARY INFLATION, I want to jump down their throats and rip everything that is daft and stupid out of them. If I could take them firsthand and show them firsthand--or better yet, live it firsthand--I picture them coming out like Lewis Winthorpe, Dan Aykroid's character in Trading Places, after spending a night in jail.

    Starting at 00:45



    "I mean, if this place is indicative of the state of correctional institutions in this country, they might as well let all the convicts out. It's far worse on the inside!"
    Last edited by Steven Douglas; 11-27-2012 at 06:40 PM.



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  3. #32

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    Buy silver and gold, stack stack stack!
    It's just an opinion... man...

  4. #33

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    Quote Originally Posted by Steven Douglas View Post
    I'm helping someone right now with a budget. She is in pretty deep shit right now, living on a very small fixed income (pension). She's been on it for almost twenty years, and lived quite comfortably for the first ten. The last ten have been like living in a Star Wars trash compactor scene, as she is being squeezed and nibbled to death on all sides. We're waxing all kinds of creative now, working on substitutions, augmentations, etc., and I have already calculated her price inflation. You know, the ones that affect only her, that no fucking comfortably detached aggregate-thinker would even think to consider. I could feel just how real price inflation was (REGARDLESS OF ITS CAUSES) while grocery shopping with her last week--to the point where all I want to do is punch every price inflation obfuscationist in their daft little throats.

    So waddya think...should I take a copy of the CPI and a mountain of other manipulated obfuscating bullshit and talk to her about why her "true inflation signals" are fucked up, anomalous, in her imagination only, or somehow exceptional to some pointy-headed theoretical construct?

    So yes, I do remember that the point of this thread was that the OP wanted to say inflation is understated and IS destroying (NOT fucking "going to destroy") purchasing power of individuals. I do agree that there are ways of approximating it or getting a good sense of what it is. Why? Because I have felt it personally, firsthand, and have been fucking living it by proxy through others, practically all my life. What I REJECT are all the reality-disconnected and convoluted ways that government and academics call piss on everyone's heads rain (and with straight faces, no less).
    We use aggregate data so we don't have to rely on an anecdote of a single person.

    On average, the CPI says that the standard of living has been decreasing but slowly. Now there are some prices that will increase more than others, and some people have a tendency to buy those goods which increase in price the most. This is bad luck but it would exist regardless of the level of increase in average prices. Even if the rate of money creation was zero, the prices of some goods would be going down a lot and the price of other goods could be going up a lot. There might be a lot of ladies out there that are made better off and some that are made worse off. The average over time tells us something about what portion of this comes from monetary policy, which changes the aggregate price level. We live in an economy where relative prices fluctuate around all the time and there are winners and losers.

    The appeal to emotion is the opposite of what we should be doing here. Your first reaction, it seems, is to reach for someone to blame and it seems like you always blame the same source for all problems regardless of whether that blame is well founded or not.

  5. #34

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    Quote Originally Posted by ababba View Post
    We use aggregate data so we don't have to rely on an anecdote of a single person.
    Or fifty million single persons taken individually, for that matter.

    The appeal to emotion is the opposite of what we should be doing here.
    No, it is precisely what we should be doing here.

    Your first reaction, it seems, is to reach for someone to blame and it seems like you always blame the same source for all problems regardless of whether that blame is well founded or not.
    No, it really was my last reaction. And the same core source IS always to blame, at the core of a "well founded" chain of causes and effects that really is easy to trace to a single source (by Any True Scotsman, or anyone with an ounce of common sense).

  6. #35

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    Quote Originally Posted by Steven Douglas View Post
    Or fifty million single persons taken individually, for that matter.

    No, it is precisely what we should be doing here.

    No, it really was my last reaction. And the same core source IS always to blame, at the core of a "well founded" chain of causes and effects that really is easy to trace to a single source (by Any True Scotsman, or anyone with an ounce of common sense).
    50 million people is getting close to the aggregate, the aggregate basket is just the average of what a bunch of different people buy.

    If corn went up 50% and wheat went down 50%, you would blame the Fed. I get it, you blame the Fed for everything including variance in individual prices, as if there weren't millions of other things that affect individual prices. We clearly both understand the Fed affects the overall price level, but you seem to think that they pin down every individual price with their actions and any harm done to any person is automatically caused by the Fed. It just defies common sense.

  7. #36

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    Quote Originally Posted by ababba View Post
    50 million people is getting close to the aggregate, the aggregate basket is just the average of what a bunch of different people buy.
    ...and then jumbling them into an homogenous, meaningless blob.

    If corn went up 50% and wheat went down 50%, you would blame the Fed.
    Fucking-A I would. You might enjoy batting at the leaves, and ignoring the roots, but I don't like to waste time. The Fed is exactly where I would start, for all the market distortions that originated with the Fed. Think it's hard to draw a meaningful connection between the Fed and agriculture? It's so easy that anyone with a pair of working eyes and half a brain stem can see it.

    I'll provide the dots. You draw the six degrees of Kevin "Fed" Bacon separation lines between them. And if you can't do it, don't worry, there are plenty here who can.

    1) Nixon Shock
    2) Petro dollars
    3) Wars in Iraq and the rest of the Middle East
    4) Ethanol
    5) Corn

    I get it, you blame the Fed for everything including variance in individual prices...
    No, that's your obfuscating fingers, trying to get everything framed so that they can point in so many directions, at so many possible causes (and there are many, most of which are minor) that the Fed just gets lost in the jumbled up, obfuscated heap, as one "possible" effect (probably minor, doncha know -- ya just never know!).

    TO WIT: (didn't even read this before posting the above, but it's a predictable script, and proves my point)

    Quote Originally Posted by ababba View Post
    ...as if there weren't millions of other things that affect individual prices.
    Game, set, match. Now I'll repeat myself:

    ...trying to get everything framed so that they can point in so many directions, at so many possible causes (and there are many, most of which are minor) that the Fed just gets lost in the jumbled up, obfuscated heap, as one "possible" effect (probably minor, doncha know -- ya just never know!).

    FYI, the Fed's role in everything monetary does not EVER get lost in a "millions of other things" heap for me. The Fed not only causes monetary and price inflation, it FACILITATES every other kind of distortion in the market, making big things out of "millions of other[wise little] things". End the currency debauchery, THEN look at the size of those "millions of other things" that affect prices, both naturally and artificially. What you DON'T do, is work your way backwards, batting at MILLIONS of leaves, most of which could be consequences, unintentional or otherwise, while pretending to address things in a meaningful way.

    When Copernicus finally did successfully place the Sun in the center of the solar system (not universe), that was not the end of Ptolemaic epicycles (perfect circles and circles within circles) and equants and such, because he used all of them. We would need a Kepler and others follow after and shake out the cobwebs. But Copernicus had at least put us on the right track, because it did not matter what anyone worked on, so long as the Earth was assumed to be the center of the universe. Likewise, it does not matter how many "price influences" you look at; so long as you leave the Fed as the accepted center of the known monetary universe, EVERYTHING will be incredibly overly-complicated, and completely fucked up.
    Last edited by Steven Douglas; 11-27-2012 at 08:11 PM.

  8. #37

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    Quote Originally Posted by Steven Douglas View Post
    ...and then jumbling them into an homogenous, meaningless blob.



    Fucking-A I would. You might enjoy batting at the leaves, and ignoring the roots, but I don't like to waste time. The Fed is exactly where I would start, for all the market distortions that originated with the Fed. Think it's hard to draw a meaningful connection between the Fed and agriculture? It's so easy that anyone with a pair of working eyes and half a brain stem can see it.

    I'll provide the dots. You draw the six degrees of Kevin "Fed" Bacon separation lines between them. And if you can't do it, don't worry, there are plenty here who can.

    1) Nixon Shock
    2) Petro dollars
    3) Wars in Iraq and the rest of the Middle East
    4) Ethanol
    5) Corn



    No, that's your obfuscating fingers, trying to get everything framed so that they can point in so many directions, at so many possible causes (and there are many, most of which are minor) that the Fed just gets lost in the jumbled up, obfuscated heap, as one "possible" effect (probably minor, doncha know -- ya just never know!).

    TO WIT: (didn't even read this before posting the above, but it's a predictable script, and proves my point)



    Game, set, match. Now I'll repeat myself:

    ...trying to get everything framed so that they can point in so many directions, at so many possible causes (and there are many, most of which are minor) that the Fed just gets lost in the jumbled up, obfuscated heap, as one "possible" effect (probably minor, doncha know -- ya just never know!).

    FYI, the Fed's role in everything monetary does not EVER get lost in a "millions of other things" heap for me. The Fed not only causes monetary and price inflation, it FACILITATES every other kind of distortion in the market, making big things out of "millions of other[wise little] things". End the currency debauchery, THEN look at the size of those "millions of other things" that affect prices, both naturally and artificially. What you DON'T do, is work your way backwards, batting at MILLIONS of leaves, most of which could be consequences, unintentional or otherwise, while pretending to address things in a meaningful way.

    When Copernicus finally did successfully place the Sun in the center of the solar system (not universe), that was not the end of Ptolemaic epicycles (perfect circles and circles within circles) and equants and such, because he used all of them. We would need a Kepler and others follow after and shake out the cobwebs. But Copernicus had at least put us on the right track, because it did not matter what anyone worked on, so long as the Earth was assumed to be the center of the universe. Likewise, it does not matter how many "price influences" you look at; so long as you leave the Fed as the accepted center of the known monetary universe, EVERYTHING will be incredibly overly-complicated, and completely fucked up.
    I hope someone else out there realizes how stupid this is. You've blamed the Fed for everything.

    I blame the Fed for two things. The money supply and the rate of increase in the aggregate price level. The money supply they control directly and over time that affects the level of average prices. You think they control everything and everything that's bad is caused by the Fed. Your argument about pointing the blame somewhere else is mind blowing idiocy because that's not what I'm doing. I am blaming the Fed for what they actually control, not for the billion things they don't control.

  9. #38

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    Quote Originally Posted by ababba View Post
    I blame the Fed for two things. The money supply and the rate of increase in the aggregate price level.
    Oh. Tha's all, tha's it? Just those two little ol' things, all nicely sterilized, benign and contained in a vacuum, with no repercussions, and nothing else that results from that? Does the Fed defy the laws of logic and physics, as it produces no ripples or other effects? I hope someone else out there realizes how stupid this is, that you've blamed the Fed for two things only, and nothing else that happened as a result.

    Your argument about pointing the blame somewhere else is mind blowing idiocy because that's not what I'm doing. I am blaming the Fed for what they actually control, not for the billion things they don't control.
    I see the Fed as more like Jigsaw, who just wants to play a game. In a very controlled arena, of course. Everything else that happens in his game--well, that's on everyone else's head, I guess we could say, because they have choices too, doncha know.



    The mind blowing idiocy is in not understanding the difference between indirect but powerful influence from a position of near-absolute control (over EVERYONE'S CURRENCY), and actual direct puppet-like micro-control over individuals which is ludicrous and not claimed at all. And you know it. Like the "players" in Jigsaw's macabre game, individuals are having normal human reactions to abnormal "demigod-like" influences that are completely beyond their control.

  10. #39

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    Quote Originally Posted by Steven Douglas View Post
    Oh. Tha's all, tha's it? Just those two little ol' things, all nicely sterilized, benign and contained in a vacuum, with no repercussions, and nothing else that results from that? Does the Fed defy the laws of logic and physics, as it produces no ripples or other effects? I hope someone else out there realizes how stupid this is, that you've blamed the Fed for two things only, and nothing else that happened as a result.



    I see the Fed as more like Jigsaw, who just wants to play a game. In a very controlled arena, of course. Everything else that happens in his game--well, that's on everyone else's head, I guess we could say, because they have choices too, doncha know.



    The mind blowing idiocy is in not understanding the difference between indirect but powerful influence from a position of near-absolute control (over EVERYONE'S CURRENCY), and actual direct puppet-like micro-control over individuals which is ludicrous and not claimed at all. And you know it. Like the "players" in Jigsaw's macabre game, individuals are having normal human reactions to abnormal "demigod-like" influences that are completely beyond their control.
    Hey its clear we both think the other is the equivalent of a theist in an atheistic world. I'm not sure where we can go after that.

    Obviously everything effects everything else in our world. Unfortunately, this also means that the Fed isn't the sole cause of all our problems. The Fed has an indirect effect on everything. But its not like you say, find the bad things in the world and state that they are caused by the Fed. What I meant by the statements that they control money and indirectly aggregate prices is that I believe any follow on effects need to be traced to these two things.

    It seems a lot like the underpants gnomes to be where you seem to be saying

    1. Print money
    2. ????
    3. Everything bad that has ever occurred but none of the good stuff


    My logic is something like

    1. Print money
    2. Too much money chasing too few goods
    3. Average prices go up

    Which I don't think anyone would argue with as a mechanism. If we want to go beyond this we need some logic instead of assertions.

  11. #40

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    Right now, U.S. treasury bonds are the most affordable and safest investment you can buy.
    "Unless someone like you cares a whole awful lot,
    nothing is going to get better. It's not." - Dr. Seuss, from The Lorax

  12. #41

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    Quote Originally Posted by ababba View Post
    http://www.ssa.gov/policy/docs/ssb/v69n3/v69n3p1.html

    I know its from the devil, but here are some details.
    So 20% of the entire private work force seems insignificant to you?
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  13. #42

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    Quote Originally Posted by Acala View Post
    So 20% of the entire private work force seems insignificant to you?
    20% is the percentage that have a defined benefit pension plan, not the percentage that relies largely on the defined benefit plan to survive. Most if not all have other assets like social security, stocks, bonds, family to help them etc. I would feel bad for those that have only a defined benefit plan if I believed inflation was really above 2%, which I don't.

  14. #43

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    Quote Originally Posted by ababba View Post
    20% is the percentage that have a defined benefit pension plan, not the percentage that relies largely on the defined benefit plan to survive. Most if not all have other assets like social security, stocks, bonds, family to help them etc. I would feel bad for those that have only a defined benefit plan if I believed inflation was really above 2%, which I don't.
    It is easy to wave your hand at this problem and pretend it is no big deal. You might think differently when millions of old people lose the income they worked their whole lives for. Or maybe you won't. But don't think a few million hungry and angry people will not have something to say about it, your hand waving notwithstanding.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  15. #44

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    Quote Originally Posted by Acala View Post
    It is easy to wave your hand at this problem and pretend it is no big deal. You might think differently when millions of old people lose the income they worked their whole lives for. Or maybe you won't. But don't think a few million hungry and angry people will not have something to say about it, your hand waving notwithstanding.
    I don't know, I thought maybe a group of libertarians might believe in personal responsibility. So if a group of people screws themselves over hardcore by denominating all their assets in nominal terms, well they should have known better. You act as if these people had no control over their own lives.

    But in all seriousness, I believe inflation is 2% and the Fed wants to keep inflation low. I would prefer a higher inflation target personally, but that's not coming anytime soon.

  16. #45

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    I don't know, I thought maybe a group of libertarians might believe in personal responsibility.
    Sounds trollishly reasonable to me.

    Quote Originally Posted by ababba View Post
    But in all seriousness, I believe inflation is 2% and the Fed wants to keep inflation low. I would prefer a higher inflation target personally.
    What target rate would you prefer, and why, specifically?

    I would prefer a higher target rate as well - something with a doubling rate of, oh, say, every 3 to 6 months? My reason for that, of course, is so that the festering boil can be brought to head and lanced all the faster, but I'm curious about your reasons for wanting an increase in the value-dilution rate of the currency.
    Last edited by Steven Douglas; 11-28-2012 at 01:31 PM.

  17. #46

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    Quote Originally Posted by ababba View Post
    I don't know, I thought maybe a group of libertarians might believe in personal responsibility. So if a group of people screws themselves over hardcore by denominating all their assets in nominal terms, well they should have known better. You act as if these people had no control over their own lives.

    But in all seriousness, I believe inflation is 2% and the Fed wants to keep inflation low. I would prefer a higher inflation target personally, but that's not coming anytime soon.
    Oh man. So it isn't the fault of the self-appointed guardians of the currency (which people are forced to use) that the currency has lost most of its value, it is the fault of the idiots who saved their money!
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  18. #47

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    Quote Originally Posted by Steven Douglas View Post
    Sounds trollishly reasonable to me.



    What target rate would you prefer, and why, specifically?

    I would prefer a higher target rate as well - something with a doubling rate of, oh, say, every 3 to 6 months? My reason for that, of course, is so that the festering boil can be brought to head and lanced all the faster, but I'm curious about your reasons for wanting an increase in the value-dilution rate of the currency.
    4% would be better for a variety of reasons. Sticky wages, debt deflation and monetary policy flexibility near the zero lower bound.

  19. #48

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    Quote Originally Posted by Acala View Post
    Oh man. So it isn't the fault of the self-appointed guardians of the currency (which people are forced to use) that the currency has lost most of its value, it is the fault of the idiots who saved their money!
    No, its the fault of people that denominated all their savings in assets that aren't hedged against inflation. But again, inflation is around 2%, so it doesn't matter that much.

    Actually the funny thing is that we are talking about people which have all their assets in a defined benefit pension plan. Its funny because these people really don't exist, since they get indexed social security. Its also funny because these people, by definition, didn't actually save any money on their own. So instead I'm blaming the people that just thought, oh well my company will take care of everything, I don't need to think about my future and take my life into my own hands.

  20. #49
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    Quote Originally Posted by ababba View Post
    No, its the fault of people that denominated all their savings in assets that aren't hedged against inflation. But again, inflation is around 2%, so it doesn't matter that much.

    Actually the funny thing is that we are talking about people which have all their assets in a defined benefit pension plan. Its funny because these people really don't exist, since they get indexed social security. Its also funny because these people, by definition, didn't actually save any money on their own. So instead I'm blaming the people that just thought, oh well my company will take care of everything, I don't need to think about my future and take my life into my own hands.
    If everything is indexed to inflation it will only push inflation higher. One cannot always stay ahead of it. It is impossible to guarantee that any investment or hedging will always beat inflation. No matter what the rate of price inflation is, there will be some people who come out ahead and some who lose.
    I am Zippy and I approve of this message. But you don't have to.

  21. #50

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    Quote Originally Posted by ababba View Post
    No, its the fault of people that denominated all their savings in assets that aren't hedged against inflation. But again, inflation is around 2%, so it doesn't matter that much.
    Around 2%? Where did you get that number? Did the government tell you so?

    I would be more inclined to stick with the BLS' broader, more "real world" straight reporting pre-1980-methodology-based estimates (just the straight-reporting facts, ma'am), as published by shadowstats, which would put inflation closer to 10% (and climbing), and not so "Hey, Piss In Your Face = Warm Rain!", as the current CPI-U does, with its constantly revised hedonics, quality adjustments and geometric weightings (which has ZIP, ZERO, NADA to to do with modelling human behavior).



    Anyone who honestly believes that real price inflation due to monetary inflation is the 1.7% (COLA adjustment based on BLS data) is completely out of touch with reality, and living in a world of mental absurdities.

    I think you have to operate from inside an unbelievably credulous vacuum to buy into think that price inflation (due to monetary inflation only) is really is "around 2%". But it doesn't matter. Here's the beauty (or ugliness, or reality) of it: Whatever the fundamentals are in terms of real numbers, these will all play out as mathematical certainties, REGARDLESS OF BELIEF.

    So if price inflation really is "around 2%", as declared in the updated CPI-U Scriptures, that's a doubling rate of around 35 years. If true, then OOH LA LA, and yippee-kai-ay, that's great news for everyone! The Fed, Treasury and banks can probably milk that system for a good time to come.

    IF, on the other hand, the rate of price inflation is closer to 10% now, and accelerating, as I believe it is, then we're talking about a doubling rate of around 7 years -- and decreasing.

  22. #51

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    Quote Originally Posted by Steven Douglas View Post
    Around 2%? Where did you get that number? Did the government tell you so?

    I would be more inclined to stick with the BLS' broader, more "real world" straight reporting pre-1980-methodology-based estimates (just the straight-reporting facts, ma'am), as published by shadowstats, which would put inflation closer to 10% (and climbing), and not so "Hey, Piss In Your Face = Warm Rain!", as the current CPI-U does, with its constantly revised hedonics, quality adjustments and geometric weightings (which has ZIP, ZERO, NADA to to do with modelling human behavior).



    Anyone who honestly believes that real price inflation due to monetary inflation is the 1.7% (COLA adjustment based on BLS data) is completely out of touch with reality, and living in a world of mental absurdities.

    I think you have to operate from inside an unbelievably credulous vacuum to buy into think that price inflation (due to monetary inflation only) is really is "around 2%". But it doesn't matter. Here's the beauty (or ugliness, or reality) of it: Whatever the fundamentals are in terms of real numbers, these will all play out as mathematical certainties, REGARDLESS OF BELIEF.

    So if price inflation really is "around 2%", as declared in the updated CPI-U Scriptures, that's a doubling rate of around 35 years. If true, then OOH LA LA, and yippee-kai-ay, that's great news for everyone! The Fed, Treasury and banks can probably milk that system for a good time to come.

    IF, on the other hand, the rate of price inflation is closer to 10% now, and accelerating, as I believe it is, then we're talking about a doubling rate of around 7 years -- and decreasing.
    The shadowstats bull was what my original post in this thread was about. See my response there.

  23. #52

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    Quote Originally Posted by ababba View Post
    The shadowstats bull was what my original post in this thread was about. See my response there.
    Yep, I said I rolled my eyes, remember? Here's part of your response again (broken down to for the sake of ridiculing it):

    I have an income of 10 dollars in year one.
    I buy five apples and five oranges in year 1, each of which cost one dollar.
    In year 2, the price of apples increases to 2 dollars and I decide to buy 10 oranges with my 10 dollars.
    What is the rate of decrease in my standard of living?

    Shadowstats says its a 50% inflation rate but that is mind blowing idiocy. Not so Q.E.D. after all.
    How about, rather than an oversimplified bullshit strawman and its equally idiotic non sequitur conclusion, why not instead quote something directly from Shadowstats that actually shows how apples and oranges (of all choices!) are treated as substitutions.

    If the cost of a computer in 10 years goes from 1000 to 1500, but the quality of the computer doubles or triples, then there very well may be deflation in the cost of computers, while shadowstats would claim major inflation. Not so Q.E.D. again.
    That's like telling an atheist that if he doesn't believe in God he must believe in the Devil instead. Hello, Earth to hedonics-believing guy: Shadowstats is not on the other side of the hedonics coin. Stating that a methodology (e.g., hedonics) is not applicable is not the same thing as a claiming the opposite of whatever that methodology produced as an answer.

    And of course, surprise surprise, new goods get introduced. Good luck using the same basket from 1950 to measure the cost of living in 2012. People purchase dramatically different baskets of goods in the two years. You have to change the basket over time. Not so Q.E.D. again.
    Yeah, which is why you start new trends with new data. But you don't fucking SPLICE it. You don't PROXY it. It makes a case for KEEPING IT SIMPLE, STUPID - as you concentrate on a basket of goods that really is as universal as possible, and as close to raw forms as possible through all generations. So what about complex finished goods (not simple things, like bread)? Totally fucked, and completely irrelevant, unless you can break it down. You don't compare buggies to automobiles, and typewriters to computers. Only a fucking moron would even begin to think that was meaningful in anyway---or someone whose sensibilities are tickled by apples-to-transmissions obfuscation.

  24. #53

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    Quote Originally Posted by Steven Douglas View Post
    Yep, I said I rolled my eyes, remember? Here's part of your response again (broken down to for the sake of ridiculing it):



    How about, rather than an oversimplified bullshit strawman and its equally idiotic non sequitur conclusion, why not instead quote something directly from Shadowstats that actually shows how apples and oranges (of all choices!) are treated as substitutions.



    That's like telling an atheist that if he doesn't believe in God he must believe in the Devil instead. Hello, Earth to hedonics-believing guy: Shadowstats is not on the other side of the hedonics coin. Stating that a methodology (e.g., hedonics) is not applicable is not the same thing as a claiming the opposite of whatever that methodology produced as an answer.



    Yeah, which is why you start new trends with new data. But you don't fucking SPLICE it. You don't PROXY it. It makes a case for KEEPING IT SIMPLE, STUPID - as you concentrate on a basket of goods that really is as universal as possible, and as close to raw forms as possible through all generations. So what about complex finished goods (not simple things, like bread)? Totally fucked, and completely irrelevant, unless you can break it down. You don't compare buggies to automobiles, and typewriters to computers. Only a fucking moron would even begin to think that was meaningful in anyway---or someone whose sensibilities are tickled by apples-to-transmissions obfuscation.
    Well that didn't answer anything. Shadowstats doesn't account for substitution, quality improvements or changes in the basket, therefore its a piss poor way to measure the standard of living.

    I don't think you answered any of my points with any kind of logical response. You are just going off again on the CPI. Doesn't mean that Shadowstats is a good response. I think the CPI is imperfect but shadowstats is several orders of magnitude worse.

  25. #54

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    Let's say you give the person in my point 1 enough income to be able to afford their original consumption bundle of 5 apples and 5 oranges at the new prices. Would they be better off than before the price change, worse off or you can't tell?

    This is a basic question from any intro Micro Econ course. If you get it right, you will be telling yourself why shadowstats is wrong.

  26. #55

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    Quote Originally Posted by ababba View Post
    Well that didn't answer anything. Shadowstats doesn't account for substitution, quality improvements or changes in the basket, therefore its a piss poor way to measure the standard of living.

    I don't think you answered any of my points with any kind of logical response. You are just going off again on the CPI. Doesn't mean that Shadowstats is a good response. I think the CPI is imperfect but shadowstats is several orders of magnitude worse.
    Aren't we talking about if there was not manipulation, prices should be going down across sectors with productivity gains? Eggs, milk, etc, not just electronics?
    Quiz: Test Your "Income" Tax IQ!

    Short Income Tax Video

    The Income Tax Is An Excise, And Excise Taxes Are Privilege Taxes

    The Federalist Papers, No. 15:

    Except as to the rule of apportionment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

  27. #56

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    Quote Originally Posted by ababba View Post
    Well that didn't answer anything. Shadowstats doesn't account for substitution, quality improvements or changes in the basket...
    Which is why your apples to oranges substitution strawman and its non-sequitur conclusion about what Shadowstats is saying about such a thing was meaningless.

    ...therefore its a piss poor way to measure the standard of living.
    No, what's piss-poor is even saying "standard of living" in the first place, as if everyone knew what that ill-defined mushy-fuzzy relativist term even means. We're talking about price inflation, not standard of living. They are not synonymous.

    I don't think you answered any of my points with any kind of logical response.
    I addressed your points, which could not be answered, as I didn't accept the premise of your points, and challenged your assumptions, as well as the very framing of your arguments. You're still arguing as if all of that had merit, and was even worthy of a response.

    If I ask you, "What's the difference between a duck?" and you ask for clarification, it would be kind of poop-stupid of me to accuse you of not "answering" my points, and worse if I don't acknowledge that they had been "addressed".

    You are just going off again on the CPI. Doesn't mean that Shadowstats is a good response. I think the CPI is imperfect but shadowstats is several orders of magnitude worse.
    Well, now who's making generalized assertions without forming any logical arguments? You don't say why YOU think CPI is "imperfect", or what that even means, let alone why shadowstats is "several orders of magnitude worse". Really, you've quantified it to several orders of magnitude? Do you even know what that term means, or are you using it as a mushy-fuzzy substitution for "really REALLY very much"?

    Quote Originally Posted by ababba View Post
    Let's say you give the person in my point 1 enough income to be able to afford their original consumption bundle of 5 apples and 5 oranges at the new prices. Would they be better off than before the price change, worse off or you can't tell?

    This is a basic question from any intro Micro Econ course. If you get it right, you will be telling yourself why shadowstats is wrong.
    Source? Don't paraphrase, cite it. And I hope you're not assuming that just because something is in an intro in a course, that it is presumed to be correct, and somehow has authority. Textbooks are written by humans, are often notoriously wrong, and are always subject to challenge. Furthermore, make sure when you cite that source that it talks about INFLATION--quantitatively-- not "standard of living", and not "worse off, or better off", which is subjective and meaningless. And if you insist on "standard of living", DEFINE IT (again, citing a source, assuming you have one).
    Last edited by Steven Douglas; 11-28-2012 at 08:07 PM.

  28. #57

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    Quote Originally Posted by Steven Douglas View Post
    Which is why your apples to oranges substitution strawman and its non-sequitur conclusion about what Shadowstats is saying about such a thing was meaningless.



    No, what's piss-poor is even saying "standard of living" in the first place, as if everyone knew what that ill-defined mushy-fuzzy relativist term even means. We're talking about price inflation, not standard of living. They are not synonymous.



    I addressed your points, which could not be answered, as I didn't accept the premise of your points, and challenged your assumptions, as well as the very framing of your arguments. You're still arguing as if all of that had merit, and was even worthy of a response.

    If I ask you, "What's the difference between a duck?" and you ask for clarification, it would be kind of poop-stupid of me to accuse you of not "answering" my points, and worse if I don't acknowledge that they had been "addressed".



    Well, now who's making generalized assertions without forming any logical arguments? You don't say why YOU think CPI is "imperfect", or what that even means, let alone why shadowstats is "several orders of magnitude worse". Really, you've quantified it to several orders of magnitude? Do you even know what that term means, or are you using it as a mushy-fuzzy substitution for "really REALLY very much"?



    Source? Don't paraphrase, cite it. And I hope you're not assuming that just because something is in an intro in a course, that it is presumed to be correct, and somehow has authority. Textbooks are written by humans, are often notoriously wrong, and are always subject to challenge. Furthermore, make sure when you cite that source that it talks about INFLATION--quantitatively-- not "standard of living", and not "worse off, or better off", which is subjective and meaningless. And if you insist on "standard of living", DEFINE IT (again, citing a source, assuming you have one).
    I don't know what planet you are on. I asked a simple question. Is the person better off, worse off or as well off. Cut through all the horse shit and just answer. Thanks.

  29. #58

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    Here's the point. If we want to use CPI to index social security, we want to give people increases in income that make them as well off as before. This is why the question is relevant. This is why standard of living is relevant. It is as simple as do you prefer one basket of goods to another. More preferred is a higher standard of living. We want an index that roughly keeps people indifferent between the different consumption bundles they buy over time.

  30. #59

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    Quote Originally Posted by ababba View Post
    I don't know what planet you are on. I asked a simple question. Is the person better off, worse off or as well off. Cut through all the horse shit and just answer. Thanks.
    Cut through your own horse shit and learn to ask a meaningful question. Words mean things. It's not a case of relativistic garbage in/garbage out. It's a case of garbage in, and you get your garbage thrown back in your face. Oh, and for the record, we on this part of the planet I am on call it Earth. Welcome.

  31. #60

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    Quote Originally Posted by ababba View Post
    Here's the point. If we want to use CPI to index social security, we want to give people increases in income that make them as well off as before.
    More qualitative, relativistic equivocating nonsense. This is why your question is irrelevant.

    Likewise with your absolute bullshit nonsense of "do you prefer one basket of goods to another", which has only the most subjective and tenuous ties to price inflation, and the reason why terms like "standard of living", "worse off/better off/as well off" are completely irrelevant.

    We want an index that roughly keeps people indifferent between the different consumption bundles they buy over time.
    Thank you, social engineer, for your indifference, and desire and objective toward other people's indifference. Now go take a Soma, and Be One With The Indifferent Masses.

    I would be far more interested in knowing how, quantitatively and objectively, not qualitatively and subjectively, PRICE INFLATION has taken place (since that is what we are actually talking about). It may well be (::: think think think :::) that they would have been BETTER OFF, not just neutral, or indifferent, or the same without monetary inflation that led to price inflation. We know that to be true, in fact, because it is well known that raw scarce goods do not "HOLD" or "MAINTAIN" value, but can actually INCREASE, becoming MORE VALUABLE over time in a growing economy.

    Thus, if you can prove the very neutrality, or zero-sum-game indifference you think is such a valid metric for comparison, it can be argued that they are indeed WORSE OFF (for not having reaped the gains that would otherwise have been theirs and theirs alone).



    Let's put it another way, in terms that any would-be social engineering thief should appreciate. You hold stock. That stock periodically pays a dividend. I steal that dividend, intercepting it, forging your signature, and cashing it EVERY TIME YOU RECEIVE IT. And let's say that you're none the wiser. You didn't even know you had a dividend coming. Furthermore, I don't touch your stock. That's yours to keep. Can I now declare with a straight face that you are "no worse off" than before, or "as well off" as before, and is there anything whatsoever even meaningful about that?
    Last edited by Steven Douglas; 11-28-2012 at 08:55 PM.

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