Inflation? What inflation? Let's look at facts.

[MKTrader]

Quote from Martinghoul:

You guys ever heard of the Boskin Commission?

On another note, I have a question. The massive 2008 commodity price spike (driven to a large degree by crude prices), did that cause a hyperinflationary episode? If not, why?

1) Yes. I'm not a big fan of Barry Ritholtz, but he's spot on re: Boskin:

http://bigpicture.typepad.com/comments/2007/05/inflation_confi.html

2) 2008's commodity spike met a bigger force that caused a huge asset bubble pop. It wasn't pretty either. I wouldn't rule that out again in the near future. However, that's still not a good situation for the Fed. Runaway inflation (which will eventually happen with commodities rallying unchecked) or the "anti-inflation" trade/asset bubble pop? Pick your poison.

 

[MKTrader]

Quote from Kassz007:

Government data being useless is getting to be a tired excuse for being wrong.

. [/B]

No, someone who won't even address numerous problems with CPI after bringing it up in the first place is the tired excuse.

 

[Debaser82]

Since the Euro launched here about 10 years ago everything at least doubled in price.


The price increase both came from rounding up to the upside after the Euro adaptation as from year to year increases.



With that in mind how can there not have been inflation in the US seeing how weak the USD was against the Euro this last decade.

 

[Martinghoul]

Quote from MKTrader:
1) Yes. I'm not a big fan of Barry Ritholtz, but he's spot on re: Boskin:

http://bigpicture.typepad.com/comments/2007/05/inflation_confi.html

Well, I am going to have to disagree, 'cause it's one of the few transparent and relatively comprehensive analyses of the calculation, based on reasonably sound logic, rather than random claims of govt conspiracies etc.

2) 2008's commodity spike met a bigger force that caused a huge asset bubble pop. It wasn't pretty either. I wouldn't rule that out again in the near future. However, that's still not a good situation for the Fed. Runaway inflation (which will eventually happen with commodities rallying unchecked) or the "anti-inflation" trade/asset bubble pop? Pick your poison.

Well, how do you know that this bubble isn't still a-popping? Given that you seem to agree (based on 2008 precedent) that the deleveraging is, in the final reckoning, a stronger force, isn't it a bit premature to be 100% convinced that hyperinflation is right arnd the corner? If we're, in fact, in the middle of a proper deleveraging, commodity prices are likely to be dis-inflationary, since they reduce the share of disposable income available to buy "stuff".

 

[MKTrader]

Quote from Martinghoul:

Well, I am going to have to disagree, 'cause it's one of the few transparent and relatively comprehensive analyses of the calculation, based on reasonably sound logic, rather than random claims of govt conspiracies etc.

Well, how do you know that this bubble isn't still a-popping? Given that you seem to agree (based on 2008 precedent) that the deleveraging is, in the final reckoning, a stronger force, isn't it a bit premature to be 100% convinced that hyperinflation is right arnd the corner? If we're, in fact, in the middle of a proper deleveraging, commodity prices are likely to be dis-inflationary, since they reduce the share of disposable income available to buy "stuff".

1) I said I agree with Ritholtz. Not sure if you agree or not. Bringing up gov't conspiracies is simply a red herring. Like other econ data, CPI has been adjusted and redefined many times over many administrations...and not because politicians have some great desire for a more accurate inflation indicator.

"Conspiracy theory" conjures up images of smoke-filled rooms, black helicopters, etc. None of that is necessary. But to say it hasn't been changed for political reasons is rather absurd.

2) Asset bubble doesn't appear to be popping since March 2009. I never said hyper-I is around the corner, only that it could be if QE/other printing goes unchecked and/or it isn't ultimately rejected by another big anti-inflation trade.

 

[Kassz007]

Quote from MKTrader:

No, someone who won't even address numerous problems with CPI after bringing it up in the first place is the tired excuse.

1. What do you mean "address"? Some people have a problem with the way CPI is calculated. What more do you want from me?

2. What about PPI?

3. I did not bring up the way CPI is calculated. You may want to reread the thread.

 

[Kassz007]

Quote from Debaser82:

Since the Euro launched here about 10 years ago everything at least doubled in price.


The price increase both came from rounding up to the upside after the Euro adaptation as from year to year increases.



With that in mind how can there not have been inflation in the US seeing how weak the USD was against the Euro this last decade.

Nobody is arguing there hasn't been inflation in the past. This thread is all about debunking the myth that inflation is here right now.

 

[Kassz007]

Quote from MKTrader:


2) Asset bubble doesn't appear to be popping since March 2009. I never said hyper-I is around the corner, only that it could be if QE/other printing goes unchecked and/or it isn't ultimately rejected by another big anti-inflation trade.

So what you're saying is that inflation could arise in the future, or it could not.

 

[MKTrader]

Quote from Kassz007:

So what you're saying is that inflation could arise in the future, or it could not.

My quote said "hyper inflation." Sheesh. No, I think we're seeing inflation now. It's not full-blown hyper type. That often takes years to develop...but comes with little or no warning.

Again, though, you bring up CPI like it's the ultimate inflation measure then refuse to address problems with it. I reject CPI as a meaningful inflation indicator. The burden of proof is on you.

The reading comprehension problems here are yours and not anyone else's.

 

[Debaser82]

Quote from Kassz007:

Nobody is arguing there hasn't been inflation in the past. This thread is all about debunking the myth that inflation is here right now.

The inflation deflation debate is largely irrelevant in my view.

We supposedly endured the worst deflationary crash in a century yet there isnt a stock out there that hasnt at least doubled from the lows.

Previously this decade inflation was widespread yet stocks barely managed to provide a positive return let alone if you count in the depreciation of the USD on the forex market.

Commodities did excellent in 2000-2008 but they did even better in 2009-2010 but as the numbers of today show that's not a sign of inflation is it...

I don't get the whole inflation deflation craze really...

If you don't invest there is nothing you can do whatever happens and if you do trade/invest the correlation between risk assets and inflation deflation is far less obvious then people think.


What I take from this is nobody ever got rich from holding cash and a lot of people have gone broke putting all their money into a single sector or asset so try to avoid being in any of those categories and you should come out ok eitherway...