Whatever happened to all that inflation conspiracy talk?

[blazespinnaker]

I noticed people are complaining a lot less about core-cpi these days.

I wonder why that is..

[zadok]

It's because everything is fading away..........

[kingcopper]

It's because everything is fading away..........

leads to a bear market ralley! For no good reason!:rolleyes:

[Yaowarat]

Because central bankers are responsible stewards of their respective nation's money supply.

And now with modern "tools" central bankers are able to "target" inflation so that it never shall occur again.

We are so fortunate to live in a time like this.

[GRG55]

Because central bankers are responsible stewards of their respective nation's money supply.

And now with modern "tools" central bankers are able to "target" inflation so that it never shall occur again.

We are so fortunate to live in a time like this.

You forgot to mention they've also found a way to eliminate the boom and bust cycle.

[GRG55]

I noticed people are complaining a lot less about core-cpi these days.

I wonder why that is..

I am curious whether iTulipers are actually seeing any real decreases in their cost of living? Gasoline is down on the back of crude, but what about other stuff?

Anybody's property taxes go down this year? How about your family food bill? Power utility? Clothing or tuition for your kids?

Maybe the stronger US$ is helping south of the 49th, but up here in Canada I'm not seeing anything, other than gasoline, that has declined. In fact the City of Calgary just announced property tax increases of between 21% and 25% over the next 3 years in their budget :( [good thing the bunker isn't inside the city limits].

[we_are_toast]

Anybody's property taxes go down this year? How about your family food bill? Power utility? Clothing or tuition for your kids?


Don't get me started on property taxes! My county tried to raise my taxes by 140%! There were no property improvements from the previous year. After a protracted fight, I was able to get them to lower it to a 50% increase. Mine was an exceptional case, but in general the increases were pretty hefty.

The assessments were made on property values from 2006, the peak of the housing bubble. I think the county saw the writing on the wall when housing sales dropped dramatically in 2007 and decided to get as much as they could while the getting was good.

[tsetsefly]

I am curious whether iTulipers are actually seeing any real decreases in their cost of living? Gasoline is down on the back of crude, but what about other stuff?

Anybody's property taxes go down this year? How about your family food bill? Power utility? Clothing or tuition for your kids?

Maybe the stronger US$ is helping south of the 49th, but up here in Canada I'm not seeing anything, other than gasoline, that has declined. In fact the City of Calgary just announced property tax increases of between 21% and 25% over the next 3 years in their budget :( [good thing the bunker isn't inside the city limits].

funny you say that, this is the headline from msn today:
Why aren't groceries getting cheaper? (http://articles.moneycentral.msn.com/Investing/StockInvestingTrading/why-arent-groceries-getting-cheaper.aspx#pageTopAnchor/?gt1=33009)

[c1ue]

Last month's numbers were interesting: Core CPI at 0.4% increase despite overall 2.8% drops in both retail and wholesale prices.

Notice the complete break from former 0.2% core cpi's showing inflation is 'contained'.

Still no 10% official CPI increase as speculated by iTulip, but 0.4% = nearly 5% a year.

Once the energy price correction stops, then perhaps the iTulip view will happen.

[flintlock]

Im convinced the next "crisis" in America is going to be the local governments running out of money. Of course they'll raise taxes, step up the "traffic enforcement" etc. More government oppresson on the way folks.

Government both local and federal, has become such a huge part of our economy, it can't help but have a huge impact. So any potential "savings" from lower fuel and food prices will probably be eaten up by big brother and his henchmen.

[blazespinnaker]

I am curious whether iTulipers are actually seeing any real decreases in their cost of living? Gasoline is down on the back of crude, but what about other stuff?

Anybody's property taxes go down this year? How about your family food bill? Power utility? Clothing or tuition for your kids?

Maybe the stronger US$ is helping south of the 49th, but up here in Canada I'm not seeing anything, other than gasoline, that has declined. In fact the City of Calgary just announced property tax increases of between 21% and 25% over the next 3 years in their budget :( [good thing the bunker isn't inside the city limits].

Nothing significant, this is why we have core CPI versus real CPI.

You'll notice that core CPI won't drop as much as the headline #s do, which are plummeting.

It works both ways, but people only seemed to complain on the way up.

However, do note that housing prices are coming down pretty hard. Again, this doesn't show up in CPI because the fed looks at rents.

It's funny, all those people complaining about house prices on the way up and how they were being ignored, aren't saying much on the way down.

Maybe the FED had a good reason for ignoring those prices?

Not that they don't make mistakes in other areas (eg, ignoring bubbles) but I have to say, with the inflation issue, they deserve some credit.

[zoog]

I am curious whether iTulipers are actually seeing any real decreases in their cost of living? Gasoline is down on the back of crude, but what about other stuff?

Anybody's property taxes go down this year? How about your family food bill? Power utility? Clothing or tuition for your kids?

Maybe the stronger US$ is helping south of the 49th, but up here in Canada I'm not seeing anything, other than gasoline, that has declined. In fact the City of Calgary just announced property tax increases of between 21% and 25% over the next 3 years in their budget :( [good thing the bunker isn't inside the city limits].

Everything seems the same for me; particularly all the organic groceries I buy at Whole Paycheck and a local chain are as expensive as ever. I have seen items on sale more often, which I've taken advantage of but it hardly makes a difference in my monthly food costs. Only put gas in the car about once every two months so the drop in gas prices hasn't really meant anything to me. Do wish oil prices had dropped before topping off the heating oil tank back in August.

I noticed people are complaining a lot less about core-cpi these days.

I wonder why that is..

Do you mean here on iTulip or just in general? For those of us who know the official numbers are bogus... what more is there to say about it? Can't do anything to change the situation. I know... doesn't stop people complaining about gold... For the population at large, I think most people's concept of inflation centers entirely around gas prices. If gas is up, inflation is high, if it's down, inflation is low. Of course everything has been getting more and more expensive over time but the change has been slow enough that most people haven't really noticed. They notice the monthly bills keep getting higher but not the point-of-purchase increases. The short-term volatility in gas prices and the frequency with which most have to fill up always grabs people's attention.

[blazespinnaker]

Do you mean here on iTulip or just in general? For those of us who know the official numbers are bogus... what more is there to say about it? Can't do anything to change the situation. I know... doesn't stop people complaining about gold... For the population at large, I think most people's concept of inflation centers entirely around gas prices. If gas is up, inflation is high, if it's down, inflation is low. Of course everything has been getting more and more expensive over time but the change has been slow enough that most people haven't really noticed. They notice the monthly bills keep getting higher but not the point-of-purchase increases. The short-term volatility in gas prices and the frequency with which most have to fill up always grabs people's attention.

People were always complaining that core-cpi missed increasing housing prices and fuel prices.

Now that housing and fuel prices have dropped hard and core-cpi hasn't (reflecting the fact that prices aren't going down for most people), it doesn't seem so dumb.


I'm sorry but I don't think core-cpi is 'bogus' at all. In fact, I think it's the only sane indicator out there.

Not everything is a government conspiracy to keep the people down.

It's the inability to give credit where credit is due in some community forums that makes me question their general judgement.

[Wild Style]

I am curious whether iTulipers are actually seeing any real decreases in their cost of living? Gasoline is down on the back of crude, but what about other stuff?

Anybody's property taxes go down this year? How about your family food bill? Power utility? Clothing or tuition for your kids?

Maybe the stronger US$ is helping south of the 49th, but up here in Canada I'm not seeing anything, other than gasoline, that has declined. In fact the City of Calgary just announced property tax increases of between 21% and 25% over the next 3 years in their budget :( [good thing the bunker isn't inside the city limits].
Property tax: nope
clothing: double nope
tuition: no there too

Utility company here in Florida claims they are going to lower the amount charged. We shall see how that one pans out.

[zoog]

People were always complaining that core-cpi missed increasing housing prices and fuel prices.

Now that housing and fuel prices have dropped hard and core-cpi hasn't (reflecting the fact that prices aren't going down for most people), it doesn't seem so dumb.


I'm sorry but I don't think core-cpi is 'bogus' at all. In fact, I think it's the only sane indicator out there.

Not everything is a government conspiracy to keep the people down.

It's the inability to give credit where credit is due in some community forums that makes me question their general judgement.

So you really think that CPI-U "All items less food and energy" (aka core-CPI) is only 2.2% YOY as of October 2008? Really? And that including food and gas only takes CPI-U up to 3.7%?

[babbittd]

I am curious whether iTulipers are actually seeing any real decreases in their cost of living? Gasoline is down on the back of crude, but what about other stuff?

Anybody's property taxes go down this year? How about your family food bill? Power utility? Clothing or tuition for your kids?

Maybe the stronger US$ is helping south of the 49th, but up here in Canada I'm not seeing anything, other than gasoline, that has declined. In fact the City of Calgary just announced property tax increases of between 21% and 25% over the next 3 years in their budget :( [good thing the bunker isn't inside the city limits].

Our commissars announced today that inflation went down in October and that wholesale (http://www.google.com/hostednews/ap/article/ALeqM5jsanM66tszKz1zFq0LOG4XvWS7zAD94HION00), whatever that is, went down the most in 60 years.

I must live in the wrong town. Gas prices have certainly dropped, but prices at the supermarket are still rising. We haven't filled the propane tank in a while, so I can't remark on that. Mervyn's (retail chain, bankruptcy) held a liquidation sale with prices that ran higher than what we noted at a competing chain store (not bankrupt) just 150 yards away. I laughed out loud in the second store. Some of the little restaurants in the area have recently raised prices. Yesterday I popped in to buy a sandwich at the best place in town and promptly turned around. (this event will force me to learn how to cook better) The laundromats and the drycleaner have recently raised prices too.

[zadok]

The laundromats and the drycleaner have recently raised prices too.

Not for long.

[ASH]

I'm sorry but I don't think core-cpi is 'bogus' at all. In fact, I think it's the only sane indicator out there.

I believe the specific criticism of core CPI is its method of calculation. As EJ has written before, the more valid way to smooth out a volatile statistical series is to time-average -- not to discard the most volatile components. Further, if your methodology is to discard the most volatile components of the series, then you should discard the outliers for each data point without regard to their identity, rather than discarding the same components every time on the basis that they "normally" are the most volatile.

[Spartacus]

the CPI began diverging from reality according to John Williams a long, long time ago and got much worse in 1992. LONG before the housing bubble and LONG before the recent petrol price gyrations.

Most of the criticisms are still out there - housing & petroleum were only 2 criticisms of many - John williams lists several others.

hedonics and substitution, for example

And I don't see any indication that the people from whom the bogus (for all the things Williams cirticises) CPI took away money (cost of living increases)) are going to be made whole by petrol & housing price declines - remember that

(clarifying the wording here ..) And I don't see any indication that the people whose cost of living increases were stolen by the bogus CPI will be made whole by anything to do with housing & petroleum.

People were always complaining that core-cpi missed increasing housing prices and fuel prices.

Now that housing and fuel prices have dropped hard and core-cpi hasn't (reflecting the fact that prices aren't going down for most people), it doesn't seem so dumb.


I'm sorry but I don't think core-cpi is 'bogus' at all. In fact, I think it's the only sane indicator out there.

Not everything is a government conspiracy to keep the people down.

It's the inability to give credit where credit is due in some community forums that makes me question their general judgement.

[blazespinnaker]

I believe the specific criticism of core CPI is its method of calculation. As EJ has written before, the more valid way to smooth out a volatile statistical series is to time-average -- not to discard the most volatile components. Further, if your methodology is to discard the most volatile components of the series, then you should discard the outliers for each data point without regard to their identity, rather than discarding the same components every time on the basis that they "normally" are the most volatile.

The real problem with CPI is that there is no 'one number fits all'.

For some other people, eg: older people who mostly rely on food and medicare, inflation might be super higher. For others, dinks (double income no kids), who only eat out and drive hybrids, don't use medicare and aren't going to school, inflation might be something completely different.

The problem is, when CPI isn't measuring our particularly life style properly, we complain. When it does, we don't say anything. (How often do people say, wow, that government sure is smart!).

So now, if at any time, there is a segment of the population which isn't being fairly treated by CPI then therefore someone is always complaining about it.

[phirang]

The inflation talked ended when those helicopters expected to throw out dollars were strafing women and children, aka naive investors who went short the dollar.