Eric Janszen on Hyperinflation vs. High Inflation

[bart]

Re: Eric Janszen on Hyperinflation vs. High Inflation

...
USDX started in March 1973, soon after the dismantling of the Bretton Woods system. At its start, the value of the US Dollar Index was 100.000. It has since traded as high as 148.1244 in February 1985, and as low as 70.698 on March 16, 2008.
...

Unreliable is correct. While the high occurred in Feb. 1985 on the 25th, the true value is way off. The correct value is 164.75.

The low is close enough for horseshoes. I show 70.68 on 3/16/2008.

/anal mode

[Bundi]

Re: Eric Janszen on Hyperinflation vs. High Inflation

+1

This is kind of interesting. I like audio quite a bit although it may be less information intensive per time in some ways. In others, I can hear conviction and confidence or a lack thereof. There is something about listening that I find a helpful way to evaluate.

[bart]

Re: Eric Janszen on Hyperinflation vs. High Inflation

Your first point confuses me. Why do the banks care about their balance sheets if they know that they're too big to fail, and that they can still get their bonuses while being bailed out?

Do you think the lesson that they've learned from the last bailout is that they don't want to go through that again? I thought they came out of the process like a kid getting off a roller coaster: "boy, that was scary, let's do it again!" The danger (to them) is, after all, vicarious. MF Global showed that. The bet on Greek debt was placed after the domestic crisis and bailout.

Or am I just getting too cynical with age?

All banksters have varying shades of gray, and through dark gray. Even the darkest ones would prefer to not go through all the public scrutiny etc. again, since they know where that can end - regardless of how in control and powerful they seem now.

[globaleconomicollaps]

Re: Eric Janszen on Hyperinflation vs. High Inflation

Thanks so much for posting your notes. I want to focus on one little point in there that has been itching for a while.

Policy has been a gradual reduction in the value of the dollar to deflate our external debts, has depreciated about 40% since ’01. Have about another 40% to go. Goal is to get the dollar down to around 60 by 2015 or so. [jk- not clear if he is referring to dxy or trade-weighted.]

This is the DXY:
http://quotes.ino.com/chart/index.ht...=&a=&w=&v=dmax
wikipedia defines it like this:
https://en.wikipedia.org/wiki/US_Dollar_Index

The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies.

It is a weighted geometric mean of the dollar's value compared only with

Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight

USDX goes up when the US dollar gains "strength" (value) when compared to other currencies.

USDX started in March 1973, soon after the dismantling of the Bretton Woods system. At its start, the value of the US Dollar Index was 100.000. It has since traded as high as 148.1244 in February 1985, and as low as 70.698 on March 16, 2008.

The makeup of the "basket" has been altered only once, when several European currencies were subsumed by the Euro at the start of 1999.

USDX is updated whenever US Dollar markets are open, which is from Sunday evening New York time (early Monday morning Asia time) for 24 hours a day to late Friday afternoon New York time.

USDX can be traded as a futures contract on the IntercontinentalExchange (ICE). It is also available in exchange traded funds (ETFs), options and mutual funds.

This is one of those bogus Wikipedia article that has a disclaimer at the top about unreliable sources. In fact the image on the left is put together from this site in Poland:
http://stooq.com/q/d/?s=dx.f

Why is there not a link to a nice FRED graph showing the data, an interview with the guy that invented the index, a picture of his mom and a scientific looking paper ( in pdf format) explaining why this is the best way to measure the dollar? The reason is that this data set doesn't exist on the federal reserve web site. This is the current US dollar index as defined by the federal reserve:
http://research.stlouisfed.org/fred2/series/TWEXB
This index is defined here:
http://www.federalreserve.gov/pubs/b...er05_index.pdf
it contains this chestnut:

REVISION OF CURRENCY WEIGHTS AND
IMPLEMENTATION OF METHODOLOGICAL
CHANGES
Because the currency weights of the staff’s dollar
indexes are based on annual data on international
trade, these weights will change as new trade data are
received. For example, during most of 2003, index
calculations for days or months in 2003 were based
on annual trade data for 2001, the latest year for
which such data were then available. In late 2003,
after annual trade data for 2002 were published, the
currency weights for 2003 were updated, and that
revision led to an update of the indexes as well. After
2003 trade data became available late in 2004, the
indexes for dates in 2003 were updated yet again. In
addition, past international trade data are occasion-
ally re-benchmarked and revised to incorporate new
information on trade flows and to correct previous
errors and omissions. Such changes may lead to
further revisions of the trade-based currency
weights.

What this means is that you cannot look at this index and compare the index on two dates, because they are constantly messing with it. This is the source of JK's confusion. Both indexes are trade weighted, but one of them gets the trade weighting done on a random schedule and the other was permanently set in 1999.

I am of two minds about this. First I like having the DXY with fixed weights, because for practical purposes it is an exact reflection of the euro ( ~60% of the weight). Also it served as a "tell" to let me know if a writer was doing his homework. If he referenced the DXY without noting it's lack of China in the trade weight mix, I could tell right away that he was not worth reading. Even a flawed metric can occasionally be useful if the data-set is consistent, but a data-set that changes randomly is worthless. It is even worse than useless. It is actively destructive, like a land mine waiting to blow up the unwary researcher.

Re: Eric Janszen on Hyperinflation vs. High Inflation

jk,

Thanks very much for sharing your excellent notes. Much appreciated!

I have a question for you and others who prefer written over audio. Jim Puplava is offering extended content to paying subscribers, with formative plans to add charts, graphs, support data etc. to the FinancialSense program. My suggestion to him has been to add written transcripts of all FinancialSense interviews to the FSN website. One reason is to appeal to those of you who prefer written material over audio. Another is to promote search engine optimization, i.e. making the content of the audio interview searchable with Google so that people can find the interview and either listen to it or read the transcript as they wish.

So my question - would this be valuable to you, would it make you more likely to subscribe to FinancialSense, and would it make you more likely to consider a premium service subscription? My gut sense is that there is a considerable "give it to us in writing" audience out there, but so far I haven't found much evidence to support my intuitive belief that one exists. I'd love more ammunition with which to persuade Jim that transcripting every interview on FSH is a worthwhile undertaking...

Thanks,
xPat

You're addressing a self-selected readership. It's a bit like asking a church choir if they prefer their gospel music live or over the radio.

[Thailandnotes]

Re: Eric Janszen on Hyperinflation vs. High Inflation

I have a question for you and others who prefer written over audio.
xPat

I check in with democracynow.org for about 8 stories a month. I read most of them as opposed to listening/watching. It's easier to pause, think, and google something being said.

I don't mind paying for quality content, but as more and more content goes behind a paywall, the current subscription models will have to change.

In my mind most articles are worth a couple of cents. There's plenty of pieces I would buy for 20 cents. There are some I'd buy for a dollar, and few I'd pay two or three. When you go to a site like NYT or WAPO and they are asking three to four dollars for 200 words written 20 years ago, you scratch your head and wonder. Subscribe or get lost.

Somewhere down the line there's going to be an ATM at the top of your browser. When you want some content, you click and the price is deducted.

[shiny!]

Re: Eric Janszen on Hyperinflation vs. High Inflation

+1

+2

[jiimbergin]

Re: Eric Janszen on Hyperinflation vs. High Inflation

it takes a LOT of motivation for me to listen to an audio or watch a video. i far prefer written material, which allows me to skim the bulk of the information - which i already know - and linger on what is new and/or stimulating. audio has a very low density of information to time invested. in this case of your interview with ej, i decided to force myself to listen a second time, and take notes so that i wouldn't play freecell out of boredom while it was playing, and so that i could share my notes with others. i would not for one second even consider subscribing to a service that only supplied audio. the very thought makes me shudder.

+1

[jk]

Re: Eric Janszen on Hyperinflation vs. High Inflation

jk,

Thanks very much for sharing your excellent notes. Much appreciated!

I have a question for you and others who prefer written over audio. Jim Puplava is offering extended content to paying subscribers, with formative plans to add charts, graphs, support data etc. to the FinancialSense program. My suggestion to him has been to add written transcripts of all FinancialSense interviews to the FSN website. One reason is to appeal to those of you who prefer written material over audio. Another is to promote search engine optimization, i.e. making the content of the audio interview searchable with Google so that people can find the interview and either listen to it or read the transcript as they wish.

So my question - would this be valuable to you, would it make you more likely to subscribe to FinancialSense, and would it make you more likely to consider a premium service subscription? My gut sense is that there is a considerable "give it to us in writing" audience out there, but so far I haven't found much evidence to support my intuitive belief that one exists. I'd love more ammunition with which to persuade Jim that transcripting every interview on FSH is a worthwhile undertaking...

Thanks,
xPat

it takes a LOT of motivation for me to listen to an audio or watch a video. i far prefer written material, which allows me to skim the bulk of the information - which i already know - and linger on what is new and/or stimulating. audio has a very low density of information to time invested. in this case of your interview with ej, i decided to force myself to listen a second time, and take notes so that i wouldn't play freecell out of boredom while it was playing, and so that i could share my notes with others. i would not for one second even consider subscribing to a service that only supplied audio. the very thought makes me shudder.

[lektrode]

Re: Eric Janszen on Hyperinflation vs. High Inflation

jk,

Thanks very much for sharing your excellent notes. Much appreciated!
...
....
... My gut sense is that there is a considerable "give it to us in writing" audience out there, but so far I haven't found much evidence to support my intuitive belief that one exists.

+1

IMHO, its the text on the screen that makes the itulip the eye candy that it is (not that fred's, barts and finsters charts arent sexy enuf mind you) - or to put it another way:

sometimes its better to quickly scan an item, top to bottom, to see if there's something worth spending more time contemplating on - text is quicker/easier in that regard, than video/audio is.

just my .02 (but EJ has tapped out most of my budget for this stuff, so....)

Re: Eric Janszen on Hyperinflation vs. High Inflation

my notes on the interview, for those who, like me, find it hard to concentrate on audio material:

jk,

Thanks very much for sharing your excellent notes. Much appreciated!

I have a question for you and others who prefer written over audio. Jim Puplava is offering extended content to paying subscribers, with formative plans to add charts, graphs, support data etc. to the FinancialSense program. My suggestion to him has been to add written transcripts of all FinancialSense interviews to the FSN website. One reason is to appeal to those of you who prefer written material over audio. Another is to promote search engine optimization, i.e. making the content of the audio interview searchable with Google so that people can find the interview and either listen to it or read the transcript as they wish.

So my question - would this be valuable to you, would it make you more likely to subscribe to FinancialSense, and would it make you more likely to consider a premium service subscription? My gut sense is that there is a considerable "give it to us in writing" audience out there, but so far I haven't found much evidence to support my intuitive belief that one exists. I'd love more ammunition with which to persuade Jim that transcripting every interview on FSH is a worthwhile undertaking...

Thanks,
xPat

[astonas]

Re: Eric Janszen on Hyperinflation vs. High Inflation

One incentive is simple survival. Deflation is deadly to banks and their balance sheets - and their bonuses. And that deadiness includes all CBs too.

One way the Fed could easily sweeten the pot is to increase Interest on Reserves. They've already given over $10 billion to the banks in the program.

Your first point confuses me. Why do the banks care about their balance sheets if they know that they're too big to fail, and that they can still get their bonuses while being bailed out?

Do you think the lesson that they've learned from the last bailout is that they don't want to go through that again? I thought they came out of the process like a kid getting off a roller coaster: "boy, that was scary, let's do it again!" The danger (to them) is, after all, vicarious. MF Global showed that. The bet on Greek debt was placed after the domestic crisis and bailout.

Or am I just getting too cynical with age?

[bart]

Re: Eric Janszen on Hyperinflation vs. High Inflation

theres one thing i cant for the life of me figure out (other than the most cynical/likely answer)

why are the banks allowed to pay less than the stated rate of inflation on passbook savings accounts?
would seem that CPI +1 or 2% should be the minimum - and IIRC, wasnt it mandatory once upon a time?
(most of the time i actually had any money to 'save' it earned 5% or so - but my cynical self knows why, its to force us to spend it or send it into the casino (the one in lower manhattan) for a 'higher return' (tho at least at the ones run by the los wages mob they give ya free drinks, shows and cheap eats...)

It sounds like you've answered your own question.

One of my favorite answers to questions like yours is that 80% of the time, the answer is some combination of money, politics, psychosis or sex. ;-)

[vt]

Re: Eric Janszen on Hyperinflation vs. High Inflation

ZIRP. The Fed wants the banks to lend at extremely low rates to get the economy moving, savers be damned.

[lektrode]

Re: Eric Janszen on Hyperinflation vs. High Inflation

One incentive is simple survival. Deflation is deadly to banks and their balance sheets - and their bonuses. And that deadiness includes all CBs too.

One way the Fed could easily sweeten the pot is to increase Interest on Reserves. They've already given over $10 billion to the banks in the program.

theres one thing i cant for the life of me figure out (other than the most cynical/likely answer)

why are the banks allowed to pay less than the stated rate of inflation on passbook savings accounts?
would seem that CPI +1 or 2% should be the minimum - and IIRC, wasnt it mandatory once upon a time?
(most of the time i actually had any money to 'save' it earned 5% or so - but my cynical self knows why, its to force us to spend it or send it into the casino (the one in lower manhattan) for a 'higher return' (tho at least at the ones run by the los wages mob they give ya free drinks, shows and cheap eats...)