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AirlinePilot wrote:Outcast,

I agree completely about ZH...its just that there are some places that will report on things the MSM wont. I only casually glance at ZH maybe once a week for entertainment value. I had a friend send me that link because we have been talking about this recently. He is much more attuned to markets etc and he knows im also kind of plugged in to what is going on here in the US fiscally long term. The "not QE" QE is an anomaly when our economy is supposed to be doing so well and he noted that also recently. IMHO the repo market action is one of those harbingers to pay attention to which can and will point to issues or problems which can shape the near future. For the few folks I know who follow the financial and global banking markets more closely than I do, this has their Spidey Senses up.

By the way, real inflation in the US is not what the Government says it is. Its probably on the order of nearly double the reported number. They are playing games with the CPI and have been for quite a while now.

I agree that the current Fed behavior is a warning sign and the US debt accumulation is untenable long term, as I stated recently in a previous post.

Re the "real inflation rate", yes, there has been some changes to the CPI, and I don't agree with them all. But they publish the data, and they give their reasons in detail. And like it or not, a lot of it makes sense. Simple example: re safety, conveniences, reliability, etc. modern cars are getting fundamentally better, so they made an adjustment for that. Yet still, the long term trajectory for car inflation (for similar models/sizes) in the US is roughly flat -- which mirrors my 40 years experience buying new cars with inflation adjusted dollars -- even more so given the way the cars improve over time.

But just looking at data and living standards over time, claiming that real inflation rates are really more like, say, Shadowstats claims just doesn't make any sense. You can simply look at the prices of things like housing and food and cars and clothing and computers and see that over the decades, the overall US inflation indicators aren't all that far off, overall.

If you're going to claim that conspiracy theories rule and that the unvetted babbleverse is to be trusted more than the MSM and the government figures, then you'd better have DAMN GOOD PROOF, not just wishful thinking -- or it's not even worth discussing.

I notice you have no links, no data, no logic, no numbers, just "inflation nearly double" what's reported.

Not exactly on the order of damn good proof, now is it? And maybe, just maybe, the MSM wants to be at least somewhat credible, so it can't "report" on any random, fact free theory that the babbleverse constantly vents its spleen on. That's actually a GOOD thing.

Shadow stats published a pretty good explanation for their numbers and going by their 1990 examples, I tend to concur with my own personal experience.

http://www.shadowstats.com/article/no-4 ... easurement

You can trust the Governments numbers, I dont. No conspiracy theories, just truth IMHO. Government changing the goalposts with no good reason.

http://www.shadowstats.com/alternate_da ... ion-charts

AirlinePilot wrote:Shadow stats published a pretty good explanation for their numbers and going by their 1990 examples, I tend to concur with my own personal experience.

http://www.shadowstats.com/article/no-4 ... easurement

You can trust the Governments numbers, I dont. No conspiracy theories, just truth IMHO. Government changing the goalposts with no good reason.

http://www.shadowstats.com/alternate_da ... ion-charts

I wouldn’t waste your time with him. He’s an imbecile

ShadowStats inflation is GIGO.

For the conspiracy nutters, the Billion Prices Project is a non-government consumer price index.

http://www.thebillionpricesproject.com/usa/

Shadow Stats just confirms what a lot of personal anecdotal evidence confirms. Real inflation is NOT what the Governement says it is, despite arguing to the contrary. They are not the only ones to confirm this. I stand by the facts which support inflation being nearer 4-5%. Its not that big a deal really and its certainly nowhere near conspiracy land.

this is a fairly even handed look at what Shadow Stats gets right regarding problems with CPI and what he/they get wrong. Basically the comment is that from the perspective of professional economists the inflation rates calculated by Shadow Stats are implausibly high.

https://moneymaven.io/economonitor/emerging-markets/deconstructing-shadowstats-why-is-it-so-loved-by-its-followers-but-scorned-by-economists-DWhA0PwhhkOHkzTLLeCvpQ/

Probably the best place to go to understand the rationale behind the CPI is here

https://www.bls.gov/opub/mlr/2008/08/art1full.pdf

Addressing misconceptions about the Consumer Price Index.

Ran across this in some of my readings a while back.

http://www.chapwoodindex.com/

Its interesting and probably more in line with reality IMHO. The problem with the CPI is its government derived and I believe they and a lot of smart think tank type folks are doing everything they can to obfuscate what a 23 Trillion $ (and increasing) Debt, a Trillion dollar budget deficit in 2019, and an exponentially rising Medicare bomb means to our near term fiscal future. The endgame of that paradigm has a definitely negative narrative because our failing political system seems hell bent on doing absolutely nothing about it. The bond market, this repo irregularity, and some other harbingers give clues to how markets and the Fed will ultimately end up "reacting" to the problem at hand.

.
I would tend to agree on taking official inflation number with some care
in Australia the official number and the supermarket prices are very divergent
power price went up , the main deflation factor is cheap petrol

In my mind the biggest problem in working out inflation is that people change their spending habits and somehow inflation statistics must reflect that - but that does open the door lots of arguments about how these changes should be taken into account.

If everybody kept buying the same goods year in and year out then it would be easy to calculate inflation - but new goods come and old goods disappear from the shops making a straight comparison of prices very difficult. A simple example is that years ago there was just milk in the shops, now in addition there is soya-milk, oat-milk etc, so which one should one use to work out inflation, since with the new products inflation must be infinity (having come from zero)?

This means we can always find something to argue about the Inflation rate

Armageddon wrote:

AirlinePilot wrote:Shadow stats published a pretty good explanation for their numbers and going by their 1990 examples, I tend to concur with my own personal experience.

http://www.shadowstats.com/article/no-4 ... easurement

You can trust the Governments numbers, I dont. No conspiracy theories, just truth IMHO. Government changing the goalposts with no good reason.

http://www.shadowstats.com/alternate_da ... ion-charts

I wouldn’t waste your time with him. He’s an imbecile

Why thank you. If you call me an imbecile, it almost certainly means I'm not, outside what your bizarre mind considers "reality".

EdwinSm wrote:In my mind the biggest problem in working out inflation is that people change their spending habits and somehow inflation statistics must reflect that - but that does open the door lots of arguments about how these changes should be taken into account.

If everybody kept buying the same goods year in and year out then it would be easy to calculate inflation - but new goods come and old goods disappear from the shops making a straight comparison of prices very difficult. A simple example is that years ago there was just milk in the shops, now in addition there is soya-milk, oat-milk etc, so which one should one use to work out inflation, since with the new products inflation must be infinity (having come from zero)?

This means we can always find something to argue about the Inflation rate

Excellent points. And re technological goods, people CAN'T keep buying the same goods because they change a LOT, often in just a decade. Then old models are outmoded and would no longer be economically viable, given cost vs. functionality.

It's amusing to me how often folks on this topic, just like so many others, when presented with good arguments / data like the example rockdoc gave above via links, just go with their "gut feel", because, of course, that's just GOT to be better than reality backed up by more than anecdote laced with emotion.

Just like climate change denial, the constant fast crash doomer meme, etc.

Again, as has been pointed out on this site before, the book "The Death of Expertise" does a good job of explaining a lot of this phenomenon and its problems. But of course, those who might benefit the most from it won't read and ponder it, due to that good old "gut feel" that is just so much smarter than all the available data/knowledge on earth. And of course, links to sources like nonsensical blogs which agree with that gut are so easy to click on.

marmico wrote:ShadowStats inflation is GIGO.

For the conspiracy nutters, the Billion Prices Project is a non-government consumer price index.

http://www.thebillionpricesproject.com/usa/

Thanks for the link, marm. And given how well it correlates with the BLS official CPI stats, it SHOULD put the inflation nutters concerns pretty much to rest. Especially the "government consipracy" spin nonsense.

But naturally not, since gut feel and conspiracy theories are just SO much more reliable -- and fun too!

So this is where the economy puts pressure upon interest rates, self regulating. If the Fed doesn't want that sort of move to take place regarding the impact upon rates, then they have to expand the money supply some way. We are well past the Saudi shock's impact upon this rate market. Still, there are problems. I haven't paid that much attention because I felt it would go away by now. But, then, a one day shock to the oil markets may need its hand held a while longer, through the oldest expiring options. It's hard to tell.

That repo rate must be awfully important if they are willing to spend so much to keep it down...

Revi wrote:That repo rate must be awfully important if they are willing to spend so much to keep it down...

God forbid one just looks at the Fed statements, easily available via Google search, or via links from the above thread, etc.

Let's not look at things in context. Let's put some "scary" spin on it, whether it makes sense or not, as long as it keeps the hope/FUD re short term financial doom alive.

It's now late December. The youtube clown-fest proclaiming short term doom from these Fed operations was proclaiming this would be $trillions a month, and be "out of control", by October, or November at the LATEST. (Pointed out by the self proclaimed "economics expert", armageddon).

So now what? Claims of death rays from Mars, perhaps?

For all the claims of how horrendous things are, in the real world, a tight US labor market isn't exactly economic doom. Nor is one which continues to grow at a decent rate.

https://www.hiringlab.org/2019/12/03/la ... look-2019/

If the market crashing, high inflation, etc. ghost stories don't work, I suppose it's just innovate and try throwing something else against the wall and hoping eventually it sticks, eh?

Yeah, that's worked so well over the past 40 years re perma-doomer forecasting.

During my childhood I recall buying an ice cream cone for 5 cents. Same for candy bars and Coca Cola.

yportne wrote:During my childhood I recall buying an ice cream cone for 5 cents. Same for candy bars and Coca Cola.

And that was how many decades ago? I remember the same thing from the 60's, say, before about '69 when inflation started to really take off.

As I recall, candy bars suddenly went from a nickel to a dime, and that was a real shock to a ten year old who didn't buy much but things like candy.

But what's your point, that over time lots of inflation exists?

That's not hard to measure. There are plenty of inflation calculators on the internet, for example. They don't show the lumpiness of, for example, candy bar inflation, but they DO give a very good sense of how US inflation had trended over time, and its overall impact over time.

For example:

https://www.usinflationcalculator.com/

Another 83 Billion in liquidity injected in overnight repo ops. I wonder how long until the Fed paints themselves into a corner.

Will this end with hyperinflation. ???

yportne wrote:Will this end with hyperinflation. ???

Not with inflation languidly hanging around the Fed's target of two percent and no sign of it moving up. Now, if this persists for years AND inflation moves up to 3%, then 5%, and well beyond, THEN that might start to get concerning.

If hyperinflation were a likely concern, wouldn't inflation hedges be heating up a fair amount? Wouldn't the dollar be getting hammered or at least meaningfully trending down?

The doomers were babbling about hyperinflation from 2009 through about 2014, due to the much bigger cash expenditures at that time to bail out the system. And aside from being COMPLETELY wrong and having a decade of very low inflation, what did all those fears get them? Shorting bonds and getting hurt by those trades, perhaps? Missing out on massive stock market gains? Wasting years hiding under their beds?

IMO, you'd do better to look at the signals from the Fed, the markets, and actual professional economists than to ask the usual suspects here about things like hyperinflation. OTOH, I prefer meaningful data / answers to endless bad forecasts of imminent doom.