Inflation just 2%?

[makloda]

Quote from detective:
Those buying TIPs are the dumbest bunch of suckers who believe that it will protect them against inflation. LOL....

If you're so much smarter than the market, why not just short TIPs? You'll make a fortune if you're right and inflation expectations are grossly understated!

 

[The Kin2]

Quote from makloda:

For all the inflation conspiracists that think the government manipulates the numbers. You ever take a look at the 10y TIPS spread?

This is a number that comes from market participants and not from the government. As of yesterday, it prices in an inflation expectation (!) of market participants of 2.3%.

If inflation is so "obvious" and "everywhere", why are the big free market participants not pricing it in?

I don't know. My only theory is that they are dumb money who believes the offical inflation numbers. I would expect a crash in TIPS prices as the U.S. house of cards continues to collapase.

 

[gnome]

Quote from detective:

Why does the Fed with its massive printing operation force rational people to have to hedge out their dollars?

If they actually cared about keeping a sound currency, this step wouldn't be required.

Maybe you are long dollars and could care less if your dollar gets watered down so that we never see a recession again LMAO

GDP will never go negative in nominal dollars if you keep printing like the Fed! Its an unarguable fact.

Not one in one hundred citizens understands this.... and that's how the Gummint likes it.

The money pump is government's way of covering over past financial indiscretions and sins.

At some point, they never again back off of the printing and just go hell-bent-for-leather until the system implodes with a worthless currency. The US MAY already be in that phase, but the US is large enough that it could take 30-40 years before the collapse. In the mean time, we'll see serious inflation and buying power loss through currency debasement.

 

[number22]

Quote from makloda:

Oh now it's the Chinese manipulating US inflation? Reading ET, I always thought the US government manipulates and intentionally under reports inflation alone. Maybe the FED and Chinese entered a secret pact

Not secret pact; just co-operation with both central bank and fed to maintain a vital market.

Look back history; China and US were called enemy to each other during 70s after Korean war and Vietnam war. There were not many American debt purchasers during that time. Where do you think the fed can hide its inflation at that time?

It is too complicate to explain fully at ET. so just look for who is purchasers of American debts thought out past 30 years.

 

[gnome]

China probably manipulating inflation stats too. Recent reports of "6.5%" are probably understated by 5% or so.

If we can believe reports, they've been money-pumping to tune of 20%/year. Take their stated GDP from that and you have an idea of the true inflation rate.

 

[Avid_Consumer]

Quote from makloda:

For all the inflation conspiracists that think the government manipulates the numbers.

i'm wondering if there has ever been an instance where the BLS changed the way the cpi was calculated which resulted in a raising of the cpi rather than a lowering (when applied to the past)

 

[Trendytrader]

Looks like the "cooked book" inflation genie is out of the bottle now. Central Banks will have no choice but to increase i-rates to slow/stop growth before inflation gets way out of hand (if it isn't already).

US dollar depreciation is inflationary due to more dollars from exports and higher import costs. FED is in a jam and will have to let go "economic growth at all costs" and start the inflation fight again i.e. i-rates will have to head up.

Remember back to the 70's even when in a deep recession the FED raised i-rates to battle inflation.

Australia reports increasing inflation at 3.25%, China reports prices rising 6.3% from a year earlier, 4.5% this year from 1.5% last year and 6.5 for August. Japan also up 2.4% and climbing.....

http://www.bloomberg.com/apps/news?pid=20601087&sid=aIysQpm..DFo&refer=home

...The report reinforced economists' expectations that Governor Glenn Stevens will increase borrowing costs again after raising his benchmark interest rate in August and last week. The effect on Australia's economic growth from the global credit crunch is likely to be ``modest,'' the central bank said.

``There is a long fight ahead against inflation and that mean's there is only one direction for interest rates,'' said Brian Redican, senior economist at Macquarie Bank Ltd. ``They will raise rates in February.''....

http://www.bloomberg.com/apps/news?pid=20601087&sid=awZF1GIimSdA&refer=home

Consumer prices rose 6.3 percent from a year earlier, according to the median estimate of 20 economists surveyed by Bloomberg News, after gaining 6.2 percent in September. The statistics bureau will release the figures at 10 a.m. tomorrow.


http://www.bloomberg.com/apps/news?pid=20601087&sid=aJhkOtI1ML.I&refer=home