Who is believing in the current monetary policy is still the right course and why?

Tsing Tao said:
No, but there is no incentive for government policies to change or for fiscal policy to act when monetary policy is papering over all the issues.

As for inflation, you can play semantics games and call it asset inflation or price, I don't really care. But I see prices rise on things the poor and middle class are more impacted by, and then I see the Fed say there's no inflation.

That's a problem, and you can ignore it if you want - but it doesn't make it go away.
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This is my last post on this thread...Can't believe it, but I find Maverick to be more obnoxious than the Martinghoul's, Piezoe's, etc...Other threads the guy is reasonable and he is an intelligent guy, but this over the top arrogance is enough for me...

In his response to one of my posts, he stated that I "was entitled to my own opinions, but not my own facts". Well this is just another instance of his hypocrisy. Tsing works on the front lines of retail pricing/consumer inflation...If a price increase is in the pipeline, he knows about it. He reads the trade papers, knows the process and doesn't have a hidden agenda (see no Price of Living increases for SS payouts in 2016)...As Tsing also alluded to, there has been steady inflation in food costs, rents, health care, tuition expenses and a whole assortment of other expenses...

Now, I see that Maverick is arguing that its a net wash if rents paid and rents collected are a wash..fine. But if we are looking at the economic impact of an economy whereby wage growth is stagnant, cost of living increases do not keep pace with health care costs, rising rents, rising property taxes, rising food costs, etc, etc...and a good segment of the population is past the age in which asset inflation will be beneficiary, then this becomes a slow motion collapse of living standards...
 
Maverick74 said:
There is NO price inflation. There is ASSET inflation. These two things are NOT the same thing and no, one does not lead to the other. God it's so frustrating explaining this to some people on here.
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Hey. I've got an idea. Why don't you try telling the federal reserve that asset inflation doesn't lead to price inflation. Because they're express policy for the last six years is to boost asset prices to goose price inflation. Haven't you noticed anything they've said? So if you think that it doesn't lead to price inflation and that any moron should know that, then obviously you should be anti fed instead of the neutral stance you claim.
 
To clarify, I see food prices - both procurement (manufacturer) and retail/wholesale (grocery store, for example). The former data I only see for my own company, the latter I see for all manufacturers at retail. Of course, what I don't know is margin level at the other manufacturers, but I can guess it based on their pricing action.
 
Social Security benefits would have got cost-of-living boost if elderly inflation was used

Published: Oct 15, 2015 1:03 p.m. ET

SteveGoldstein
D.C. bureau chief

MW-DW481_cola_l_20151015115244_MG.jpg



Social Security recipients are going to get no cost-of-living adjustment next year. But if the determination was based on the government’s own estimate of what inflation is like for those 62 years and over, there would be a rise in benefits.

Social Security is calculated based on the change in prices for an inflation measure called CPI-W during the third quarter. That dropped 0.4% from the third quarter of 2014 to the third quarter of 2015.

The Labor Department calculates an inflation measure called the CPI-E, which is the consumer-price index for Americans 62 years of age and older. That grew 0.6% in the third quarter of 2015.
MarketWatch


But the Labor Department also calculates an inflation measure called the CPI-E, which is the consumer-price index for Americans 62 years of age and older. That grew 0.6% during the same period.


Put another way, Social Security recipients are missing out on an as much as $44 a month due to the way inflation is measured.

In fact, the elderly inflation measure has outgained the CPI-W for the last four years, using the same third quarter-to-third quarter time period.

The main difference between CPI-W and CPI-E is the proportion allocated to medical-care spending, which for the elderly is roughly double that of the general population. The elderly also spend more on shelter.

The Labor Department admits it has done about 20% of the research in constructing the CPI-E to create a “basket” of goods and services that it has done for the other measures of inflation. It is so experimental that the agency doesn’t even regularly publish the data, though, as shown here, it is available upon request.

More over, even if the agency had more faith in its elderly inflation measure, it would be up to Congress to change the COLA formula.
 
I can't find the paper right now. But it exists and and saw it many times and it comes from the Federal Reserve. This paper says that each dollar increase in asset prices results in 4 cents spending

S definitely Fed doesn't agree with Maverick and thinks ssset inflation increases spending
 
kashirin said:
I can't find the paper right now. But it exists and and saw it many times and it comes from the Federal Reserve. This paper says that each dollar increase in asset prices results in 4 cents spending

S definitely Fed doesn't agree with Maverick and thinks ssset inflation increases spending
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OK, we're still not getting this. Asset prices go up and they go down. In the long run, whatever excess spending is being derived from higher asset prices must be offset by future debt either through the conversion of the asset into cash to pay down the debt or via real debt through the decline in asset prices. Therefore assets appreciation does NOT contribute to real long term growth. Therefore it is not a variable that affects long term inflation growth. Some of you are missing the forest to stare at the trees.
 
fhl said:
Hey. I've got an idea. Why don't you try telling the federal reserve that asset inflation doesn't lead to price inflation. Because they're express policy for the last six years is to boost asset prices to goose price inflation. Haven't you noticed anything they've said? So if you think that it doesn't lead to price inflation and that any moron should know that, then obviously you should be anti fed instead of the neutral stance you claim.
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Actually not true. The Fed bought mortgage back securities to free up reserves for commercial banks so they could lend the money to you so you could spend it. Guess what? It didn't happen. The banks didn't lend and what little lending they did, consumers used it to pay down debt and not spend. Hence the lack on inflation. The Fed was never trying to boost asset prices, they were providing liquidity in a market where there was little. I don't agree with most of that and the real issue the Fed created was not cheap money but moral hazard on the part of the banks. THAT is a major concern. Not inflation. I'm not anti-anything, that is just childish. I trade what I see.
 
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