Forgive my ignorance, but how exactly has the economy improved?

[kevin21boston]

There is this great myth going around that the economy is improving. I have no idea where people get this idea. Somebody want to explain how the economy is improving?

Because last I checked banks are still failing, people are still losing their jobs (and consequently nobody is getting hired), and inflation is out of control.

[resnor]

Shhhhhhh...don't ask that question...

[Gtrght77]

The rich started getting richer again, thats about it.

[theanalogkid]

Hope and change!

[Nevada_Ballin]

"The fundamentals of the economy are fine"........

8 years of Bush ignorance creates a pretty deep hole to dig out of. But we are America and we'll get things back on track eventually.


.

[RicoVacilon]

inflation is out of control.

What's inflation right now? Haven't checked lately.

The economy has at the least stopped getting worse. You realize unemployment figures are always behind the curve, right?

[resnor]

What's inflation right now? Haven't checked lately.

The economy has at the least stopped getting worse. You realize unemployment figures are always behind the curve, right?

What happens when the people stop buying our debt, so in aneffort to attrac buyers, the Fed raises interest rates? Oh, that's right, inflation will hit...and will hit hard.

[resnor]

"The fundamentals of the economy are fine"........

8 years of Bush ignorance creates a pretty deep hole to dig out of. But we are America and we'll get things back on track eventually.


.

LOL
Yeah, Bush was really responsible for the housing bubble, and the Wall Street fiasco. I seem to remeber Bush trying to move on the housinf problem, and Barney Frank and other leading Dems stonewalling him, saying everythingnwas fine...

[sideoutshu]

"The fundamentals of the economy are fine"........

8 years of Bush ignorance creates a pretty deep hole to dig out of. But we are America and we'll get things back on track eventually.


.


Mark your calendar.....we are now 11 months in and the libs are still blaming Bush. How long til it's Obama's fault? Just give me a date.

[Paydirt404]

Sideout and Resnor, how do we get out of the situation we are in?

[sideoutshu]

The only thing with the economy that I am noticing is the value of the dollar sinking with respect to foreign currency. I still have the same job I had at the beginning, so my comparative spending power is actually higher since the recession began. But I noticed the hit when I went to send money to my wife's relatives in Poland and the exchange rate is about 2.2 to 1; down from 3.8 to 1 five years ago.

[sideoutshu]

Sideout and Resnor, how do we get out of the situation we are in?

I am not a money guy, but I think that cutting spending is an obvious one, that way we could stop taxing the hell of out small businesses and get employment back on track.

I think they should try to open up competition across state lines for health insurance and give that a few years before doing anything more drastic. I also think we need to take steps toward making America competetive by curbing the ridiculous wages and benefits being made by union workers in the automotive industry and others.

[Play Action]

Complaints and no solutions are a way out...:rolleyes:

[sideoutshu]

Complaints and no solutions are a way out...:rolleyes:

There was a party voted into power a year ago. Shouldn't they be the ones offering solutions? I mean what is holding them back, they control the entire government.

[Nevada_Ballin]

LOL
Yeah, Bush was really responsible for the housing bubble, and the Wall Street fiasco. I seem to remeber Bush trying to move on the housinf problem, and Barney Frank and other leading Dems stonewalling him, saying everythingnwas fine...

There were plenty of people warning Bush that economic trouble was coming - that's where the quote "the fundamentals of the economy are fine" came from. Actually Bush used the word "strong", not "fine".

""There is a lot of liquidity in our system, and liquidity will provide the capacity for our system to adjust," Bush said. "Markets … ultimately look at the fundamentals of any economy, and the fundamentals of our economy are strong." GW, August 2007 http://www.usatoday.com/money/economy/2007-08-08-bush-markets-economy_N.htm

This was also the standard response to the housing issue also.

I'm not saying Bush caused it all to happen. I'm saying Bush ignored that it was very possible it could happen despite the warnings from many people.


.

[sideoutshu]

LOL
Yeah, Bush was really responsible for the housing bubble, and the Wall Street fiasco. I seem to remeber Bush trying to move on the housinf problem, and Barney Frank and other leading Dems stonewalling him, saying everythingnwas fine...

Not only that, but they haven't learned anything. Barney Frank said this week that he plans to announce a bill that would INCREASE, not decrease the FHA loan insurance limits. It is amazing how this guy has gotten away from this thing untarnished.

[Play Action]

There was a party voted into power a year ago. Shouldn't they be the ones offering solutions? I mean what is holding them back, they control the entire government.

How long did it take to get it this way and name me someone who could have fixed it in a year and do you believe in the cliche 'easy come, easy go??'

[sideoutshu]

How long did it take to get it this way and name me someone who could have fixed it in a year and do you believe in the cliche 'easy come, easy go??'

Well, Barack Obama claimed he had the cure for everything, and has done nothing.

Not sure what you mean by "easy come, easy go", but I do beleive that the idiots who got these ridiculous home loans should have been smarter then to think they would get something for nothing...yes

[Play Action]

Well, Barack Obama claimed he had the cure for everything, and has done nothing.

Not sure what you mean by "easy come, easy go", but I do beleive that the idiots who got these ridiculous home loans should have been smarter then to think they would get something for nothing...yes

Stupid Home loans + Stupid, meaningless Gulf War = A portrait of America....

INMO both parties created this mess and now more than ever, both need to get US out of this mess...

This will take smarts, Wit and luck, not bickering and a bunch of I told you so, BS...

[resnor]

Sideout and Resnor, how do we get out of the situation we are in?

Last I checked I was posting on a message board, not drafting legislation in Congress.

Sideout gave some good things, though.

[theanalogkid]

LOL
Yeah, Bush was really responsible for the housing bubble, and the Wall Street fiasco. I seem to remeber Bush trying to move on the housinf problem, and Barney Frank and other leading Dems stonewalling him, saying everythingnwas fine...

When the banks went to the Bush Administration to get the rules changed so they could increase their subprime lending there wasn't much arm twisting needed.

Subprime Lending ballooned after that as seen here (http://en.wikipedia.org/wiki/File:U.S._Home_Ownership_and_Subprime_Origination_ Share.png)

Yes, Congress shares a lot of the responsibility, so do the banks that made the loans, and so do the people that wanted the loans, as well as the Federal Reserve who held interest rates at incredibly low levels for years causing banks to look for riskier investments.

Everyone likes to blame the people that took out the mortgages, but banks failed to do their credit risk analysis in most cases they didn't care because they'd sell the loan off to another bank, or an institution like Fannie Mae or Freddie Mac. Banks did lobby to get Glass-Steagal repealed in 1999. No one told banks to hold the majority of their assets in CMOs or CDOs. No one told AIG to underwrite billions on these CMOs in credit default swaps. No one told banks to fire the ones that spoke up about the risks of holding these derivative instruments either.

[RicoVacilon]

inflation is out of control.

Still waiting for someone to tell me what the number is on inflation right now. /shrug

According to http://www.inflationdata.com/inflation/Inflation_Rate/CurrentInflation.asp it's -.18%

That's freaking out of control.

[conviction]

What's inflation right now? Haven't checked lately.

The economy has at the least stopped getting worse. You realize unemployment figures are always behind the curve, right?

No it hasn't Rico. If you look at the markets they are STILL losing value compared to real value such as gold. The increase in numbers is phony because of pumping of the dollar.

[RicoVacilon]

No it hasn't Rico. If you look at the markets they are STILL losing value compared to real value such as gold. The increase in numbers is phony because of pumping of the dollar.

That would be beyond me. But gold is overvalued right now as well. So if everything is overvalued. . . then it's not really overvalued. Am I oversimplifying it?

[Gtrght77]

How long did it take to get it this way and name me someone who could have fixed it in a year and do you believe in the cliche 'easy come, easy go??'

Well if you can say that then we can all say 9-11 was Bushs fault.

[conviction]

That would be beyond me. But gold is overvalued right now as well. So if everything is overvalued. . . then it's not really overvalued. Am I oversimplifying it?

I find it odd that this concept is beyond you.

[kevin21boston]

Still waiting for someone to tell me what the number is on inflation right now. /shrug

According to http://www.inflationdata.com/inflation/Inflation_Rate/CurrentInflation.asp it's -.18%

That's freaking out of control.


Look at the CPI. Look at gold. Look at the dollar. The CPI according to that same site went from 211-216 since January. Gold is up $300 since Obama took over. The dollar is the weakest currency in the world.

And how much has gas gone up since Obama took over?

Rising inflation is all around you. Open your eyes.

[kevin21boston]

That would be beyond me. But gold is overvalued right now as well. So if everything is overvalued. . . then it's not really overvalued. Am I oversimplifying it?

Yes you are oversimplifying it.


There is a reason gold is so high, but it's not overvalued. It's at fair value because the dollar is so low. When you flood the market with so many dollars it devalues the currency and raises the price of gold.

And what do you mean by "everything is overvalued"?

[RicoVacilon]

I find it odd that this concept is beyond you.

Because I talk a lot about politics in general and am admitting being unprepared for an in depth financial discussion? I have opinions on economic matters, but once it gets to all the indepth market relations and numbers I'm out of my league. A lot of you guys with finance degrees are over my head. I'm dribblin the ball without being able to take my eyes off it. You guys and going behind the back and between your legs.

[RicoVacilon]

Yes you are oversimplifying it.


There is a reason gold is so high, but it's not overvalued. It's at fair value because the dollar is so low. When you flood the market with so many dollars it devalues the currency and raises the price of gold.

Except gold isn't purchased only in dollars. From what I've heard, there is a run on gold that is producing a possible bubble similar to real estate. And it might be because of all the alarmists (who might not be so alarmist after all--we'll find out). If I oversimplify it, it's not because I know better and am just trying to prove a point.


And what do you mean by "everything is overvalued"?

I hear all this talk about extra money and stocks aren't worth what they're trading for and this and that. Sounds like everything is overvalued. And if all products are related to each other, then it's not really overvalued. If people are using a gold standard (which I think is an obsolete way to run an economy--but don't think that means we can continue overspending), and gold if over priced, then everything else must be adjusted accordingly.

BTW, you didn't mention inflation. I don't know where official (or unofficial for that matter) inflation numbers are found. But I couldn't find any that pointed to high inflation. So were you just jumping the gun when you said inflation was high, or do I just not know where to look?

[resnor]

Inflation is being kept at bay because the Fed is keeping interest rates ridiculously low. I already talked about this. The problem with this situation is that people, China, for instance, are going to stop buying our debt because we are pumping out dollars like they're nothing. When China, and others, stop buying our debt, the Fed will have to RAISE interest rates to attract buyers. Once the interest rates come up, inflation will hit.

[theanalogkid]

Inflation is being kept at bay because the Fed is keeping interest rates ridiculously low. I already talked about this. The problem with this situation is that people, China, for instance, are going to stop buying our debt because we are pumping out dollars like they're nothing. When China, and others, stop buying our debt, the Fed will have to RAISE interest rates to attract buyers. Once the interest rates come up, inflation will hit.

That makes no sense. How do you think the Federal Reserve get to their target federal funds rate? By increasing liquidity through open market purchases. Creating money money lowers the value of already existing money.

They raise the fed funds rate rate in the opposite fashion. The Fed will try to raise the fed funds rate as a reaction to inflation, it won't cause inflation. Otherwise we'd always have extremely cheap money and could print money without consequence.

When banks start lending regularly again is when inflation will hit through with the money multiplier effect.

Treasury coupon rates are determined by auction, not by the Federal Reserve.

[Nevada_Ballin]

Look at the CPI. Look at gold. Look at the dollar. The CPI according to that same site went from 211-216 since January. Gold is up $300 since Obama took over. The dollar is the weakest currency in the world.

And how much has gas gone up since Obama took over?

Rising inflation is all around you. Open your eyes.

I just bought 10 loaves of Wonder Bread for $6 at the local Wonder Bakery. Also got 2 boxes Entemann chocolate donuts for $3 at the Entenman Outlet cuz man cannot live on bread alone :)


.

[TheRealist]

These guys usually do inflation and unemployment numbers:

http://www.bls.gov/

Inflation (especially CPI) measures overall prices, so just pointing to oil or gold and saying the price has gone up is an oversimplification. We've also mentioned that the dollar has weakened as well, but even that is not the true reason for inflation.

We're in a recession, therefore the market corrects accordingly. Prices are adjusted down by businesses because they realize that demand has shifted down and if they don't want to be priced out of the market then they need to set a lower price to coincide with less demand. (Basic Demand/Supply here)

Here is what causes inflation...monetary policy and expectations.

When the Fed decides to prop up the U.S. economy in an attempt to stabilize unemployment, it lowers the federal funds rate by buying up Treasury bonds from member banks. As a result, this money is lent out to other banks at a specific interest rate. However, in "creating" this new money there are now more dollars floating around than previously, so to lend money out banks compete with each other by lowering the interest rate on their money lent out. That is....only if the banks want to lend out the money (who would want to lend out to a bank that could go under...that is why everyone became cautious)

Assuming that banks lent the money out, there are more dollars chasing after the same goods and services as before. As a result, businesses will raise prices since it is more profitable to do so...

That isn't the end though, it all runs on the expectations of consumers. The Fed can pump all the money it wants into the economy, but inflation is mainly driven by consumer expectations. If we don't notice certain price increases and are willing to pay them anyway, then there is nothing really driving our attitude to need to purchase NOW. However, if we wake up tomorrow and see that the price of gasoline is $5.00 per gallon across the country and our expectations are that it will go up, then we are all going to run to the pump...as a result, price increases with higher demand. People will probably also start to realize other assets with higher (nominal) value as well causing spillover.

But...we have to realize though that if the Federal Reserve hadn't pumped in trillions of dollars, then these dollars would have never been there to buy the product or service in the first place.

Sooooo...what is something that we should be looking at concerning inflation?

http://research.stlouisfed.org/fred2/series/CURRENCY?cid=25

After seeing that, we should see that the pieces are already set in place, all we need is a recovering economy that places money back into the hands of consumers and perhaps another external shock (higher oil prices) to set it into motion and change our expectations. The external shock would be like a worst-case scenario in terms of inflation, but I wouldn't put it past OPEC to display more erratic behavior in the future regarding supply concerns, etc.

Is inflation a problem now though? No. Will it be a problem in the future? I think so.

In the meantime, just sit back and watch the dollar get raped harder and harder. Especially if foreign banks start raising rates before us...

[RicoVacilon]

Realist and Analog's posts are exactly what I'm talking about when I say this stuff is over my head. CPI, URL, STD. . .

[kevin21boston]

These guys usually do inflation and unemployment numbers:

http://www.bls.gov/

Inflation (especially CPI) measures overall prices, so just pointing to oil or gold and saying the price has gone up is an oversimplification. We've also mentioned that the dollar has weakened as well, but even that is not the true reason for inflation.

We're in a recession, therefore the market corrects accordingly. Prices are adjusted down by businesses because they realize that demand has shifted down and if they don't want to be priced out of the market then they need to set a lower price to coincide with less demand. (Basic Demand/Supply here)

Here is what causes inflation...monetary policy and expectations.

When the Fed decides to prop up the U.S. economy in an attempt to stabilize unemployment, it lowers the federal funds rate by buying up Treasury bonds from member banks. As a result, this money is lent out to other banks at a specific interest rate. However, in "creating" this new money there are now more dollars floating around than previously, so to lend money out banks compete with each other by lowering the interest rate on their money lent out. That is....only if the banks want to lend out the money (who would want to lend out to a bank that could go under...that is why everyone became cautious)

Assuming that banks lent the money out, there are more dollars chasing after the same goods and services as before. As a result, businesses will raise prices since it is more profitable to do so...

That isn't the end though, it all runs on the expectations of consumers. The Fed can pump all the money it wants into the economy, but inflation is mainly driven by consumer expectations. If we don't notice certain price increases and are willing to pay them anyway, then there is nothing really driving our attitude to need to purchase NOW. However, if we wake up tomorrow and see that the price of gasoline is $5.00 per gallon across the country and our expectations are that it will go up, then we are all going to run to the pump...as a result, price increases with higher demand. People will probably also start to realize other assets with higher (nominal) value as well causing spillover.

But...we have to realize though that if the Federal Reserve hadn't pumped in trillions of dollars, then these dollars would have never been there to buy the product or service in the first place.

Sooooo...what is something that we should be looking at concerning inflation?

http://research.stlouisfed.org/fred2/series/CURRENCY?cid=25

After seeing that, we should see that the pieces are already set in place, all we need is a recovering economy that places money back into the hands of consumers and perhaps another external shock (higher oil prices) to set it into motion and change our expectations. The external shock would be like a worst-case scenario in terms of inflation, but I wouldn't put it past OPEC to display more erratic behavior in the future regarding supply concerns, etc.

Is inflation a problem now though? No. Will it be a problem in the future? I think so.

In the meantime, just sit back and watch the dollar get raped harder and harder. Especially if foreign banks start raising rates before us...



The government's "numbers" have long been bullsh1t. They are worthless until the "final revision" comes in months later. For instance the market expected 500K jobs to be lost last week but the BLS reported 450K or something. Market rallies. People think it's great.

What's going to happen in January is that the BLS will give their final revision to that number and it's going to be something like 525K. But since that's old news nobody cares and it slips under the radar.

And don't let me get into unemployment numbers or inflation numbers. The government is shi1tting on American intelligence when they release that garbage. take the government estimate, then multiply by 1.75 and that's a more accurate number.

absolutely sickening what is going on right now. no integrity whatsoever.

[TheRealist]

The government's "numbers" have long been bullsh1t. They are worthless until the "final revision" comes in months later. For instance the market expected 500K jobs to be lost last week but the BLS reported 450K or something. Market rallies. People think it's great.

What's going to happen in January is that the BLS will give their final revision to that number and it's going to be something like 525K. But since that's old news nobody cares and it slips under the radar.

And don't let me get into unemployment numbers or inflation numbers. The government is shi1tting on American intelligence when they release that garbage. take the government estimate, then multiply by 1.75 and that's a more accurate number.

absolutely sickening what is going on right now. no integrity whatsoever.

I'm just stating the numbers and graphs as given.

I agree that it is deceitful in painting a rosier (or worse) picture to advance a political end...and it definitely can be achieved in manipulating those numbers (especially unemployment)

As far as inflation goes though...I still don't think we have a problem at this moment in time even with the inaccuracies of calculating CPI. It's coming though.

[rank is dumb]

It seems to me that Goverment had little to do with this actualy happening..

How does a 900 SQ foot house cost $500,000 because its out side of seattle and the same house sells for 75K in Pittsburgh?

How does a person with the same experience, same job, same life in a diffrent area get paid twice as much?

How does a CEO of a mortage complany get a 10 million dollar bonus and 4 years later that company is getting bailed out??

Our Greed seems to be the real reason our country is the way it is now.. Untill our soceity changes and we start to realize whats really important in life nothing will change!!

[RicoVacilon]

The government's "numbers" have long been bullsh1t. They are worthless until the "final revision" comes in months later. For instance the market expected 500K jobs to be lost last week but the BLS reported 450K or something. Market rallies. People think it's great.

What's going to happen in January is that the BLS will give their final revision to that number and it's going to be something like 525K. But since that's old news nobody cares and it slips under the radar.

And don't let me get into unemployment numbers or inflation numbers. The government is shi1tting on American intelligence when they release that garbage. take the government estimate, then multiply by 1.75 and that's a more accurate number.

absolutely sickening what is going on right now. no integrity whatsoever.

So do you retract your statement that inflation is ridiculously high or do you stand by it?

[TheRealist]

It seems to me that Goverment had little to do with this actualy happening..

How does a 900 SQ foot house cost $500,000 because its out side of seattle and the same house sells for 75K in Pittsburgh?

How does a person with the same experience, same job, same life in a diffrent area get paid twice as much?

How does a CEO of a mortage complany get a 10 million dollar bonus and 4 years later that company is getting bailed out??

Our Greed seems to be the real reason our country is the way it is now.. Untill our soceity changes and we start to realize whats really important in life nothing will change!!

Who is to tell me what should be important in my life? That is different for each person. You can plead your case, but you shouldn't be able to MAKE people change by imposing on their civil liberties.

Our "greed", which is nothing more than individuals acting in their own self-interest, was what made this country productive and great. Our government and its vast "plans" for structuring society are what is bringing it down.

[RicoVacilon]

Our "greed", which is nothing more than individuals acting in their own self-interest, was what made this country productive and great.

Umm. . . no. This is the Michael Douglas line from Wall Street. Greed is NOT the same as self-interest. Greed is when self-interest acts without regard to ethics. And it is for both these reasons that capitalism is doomed to be unfair.

[resnor]

That makes no sense. How do you think the Federal Reserve get to their target federal funds rate? By increasing liquidity through open market purchases. Creating money money lowers the value of already existing money.

They raise the fed funds rate rate in the opposite fashion. The Fed will try to raise the fed funds rate as a reaction to inflation, it won't cause inflation. Otherwise we'd always have extremely cheap money and could print money without consequence.

When banks start lending regularly again is when inflation will hit through with the money multiplier effect.

Treasury coupon rates are determined by auction, not by the Federal Reserve.

The Fed determines interest rates, right? The Fed is keeping interest rates low, right? When other countries stop buying our debt, how are they going to generate interest? They'll have to raise interest rates to get people to buy. Those auctions aren't going so well recently...

[resnor]

It seems to me that Goverment had little to do with this actualy happening..

How does a 900 SQ foot house cost $500,000 because its out side of seattle and the same house sells for 75K in Pittsburgh?

How does a person with the same experience, same job, same life in a diffrent area get paid twice as much?

How does a CEO of a mortage complany get a 10 million dollar bonus and 4 years later that company is getting bailed out??

Our Greed seems to be the real reason our country is the way it is now.. Untill our soceity changes and we start to realize whats really important in life nothing will change!!

The house sells for more in one area than another because more people want to live in that area. The job one is similar. If you live in an area with a higher standard of living, you're going to pay more for where you live, but thatbis offset by generally getting paid more. People won't spend a ton of money to live somewhere if the pay is not enough.

[theanalogkid]

The Fed determines interest rates, right? The Fed is keeping interest rates low, right? When other countries stop buying our debt, how are they going to generate interest? They'll have to raise interest rates to get people to buy. Those auctions aren't going so well recently...

What does the attractiveness of US debt have to do with inflation due to the levels of interest rates? The Federal Reserve only influences the Fed Funds Rate, and controls the Discount Rate.

Treasury auctions actually have been going well recently. In fact the Treasury sold bonds with the lowest yield ever recorded today. Like I said before, the coupon rates on treasury bonds are determined at auction which is separate from the Fed.

[TheRealist]

Umm. . . no. This is the Michael Douglas line from Wall Street. Greed is NOT the same as self-interest. Greed is when self-interest acts without regard to ethics. And it is for both these reasons that capitalism is doomed to be unfair.

Is there a system that is AS fair as capitalism?

[theanalogkid]

Umm. . . no. This is the Michael Douglas line from Wall Street. Greed is NOT the same as self-interest. Greed is when self-interest acts without regard to ethics. And it is for both these reasons that capitalism is doomed to be unfair.

There is no system which stop people from being greedy because controlling someone's thinking process is impossible.

Besides that we don't have capitalism, it doesn't exist in reality. In capitalism companies that are "too big to fail" wouldn't get a government bailout, and they would get punished for their own greed.

[kevin21boston]

So do you retract your statement that inflation is ridiculously high or do you stand by it?

You obviously have not comprehended what anybody has said in this thread.

Devalued dollar = Higher inflation. What has happened since Obama took over? He destroyed the dollar.

Therefore, inflation takes over.


Gas in January: $1.50
Gas today $3.00

Gold in January: $850
Gold today: $1200

CPI in January: 211
CPI today: 216

CPI in January 2008: 211
CPI in December 2008: 210



Is this painting a picture at all? Yes, inflation is out of control, and it's only going to get worse. Much worse. Especially with rumblings out there that some countries are ready to raise interest rates.

[theanalogkid]

What has happened since Obama took over? He destroyed the dollar.

The dollar was on the road to destruction long before Obama ever took office.

[kevin21boston]

The dollar was on the road to destruction long before Obama ever took office.

Wrong. Look at the charts again. When Bush left office it was the strongest currency in the world.

[RicoVacilon]

There is no system which stop people from being greedy because controlling someone's thinking process is impossible.

Correct, but free markey capitalism rewards greed. While no system can eliminate greed, there either exist or can be created systems that do not reward greed. From a behavioral pyschoogy standpoint, capitalism is a really horrible system at getting people to behave how the system would want.

[RicoVacilon]

Is there a system that is AS fair as capitalism?

Probably not in existence. I tend to go with social democrats but even that isn't totally fair. Probably more fair than what we've got here though.

And I forgot to mention, of course we don't have pure free market capitalism in this country. We're talking ideal types here.

[RicoVacilon]

You obviously have not comprehended what anybody has said in this thread.

Devalued dollar = Higher inflation. What has happened since Obama took over? He destroyed the dollar.

Therefore, inflation takes over.


Gas in January: $1.50
Gas today $3.00

Gold in January: $850
Gold today: $1200

CPI in January: 211
CPI today: 216

CPI in January 2008: 211
CPI in December 2008: 210



Is this painting a picture at all? Yes, inflation is out of control, and it's only going to get worse. Much worse. Especially with rumblings out there that some countries are ready to raise interest rates.

Actually, I've been reading what everyone has been saying in this thread. You started by saying that inflation is out of control. I looked for number. I even cited a number. No one argued with the number. Everyone, but you, said that inflation isn't an issue right now, but given the current situation it has a high probablility of becoming an issue in the future.

So don't give me advice to pay closer attention to what people are writing when you don't heed your own advice. ;)

By the way, trying to set an inflation % on the price of gas is about the most idiotic thing I've ever heard. I mean that's intellectual entrapment there buddy.

[theanalogkid]

Wrong. Look at the charts again. When Bush left office it was the strongest currency in the world.

Are you really trying to make the claim that because people ran to the dollar after the financial system collapsed that it was the 'strongest' in the world.

Lets take a look at the Euro vs Dollar

http://finance.yahoo.com/echarts?s=EURUSD=X#chart3:symbol=eurusd=x;range=5y ;indicator=volume;charttype=line;crosshair=on;ohlc values=0;logscale=on;source=undefined (The higher, the weaker the dollar is for those that do not know)

Even at the end of 2008, the Euro was still stonger than the dollar.

or the Pound vs Dollar

http://finance.yahoo.com/echarts?s=GBPUSD=X#chart1:symbol=gbpusd=x;range=5y ;indicator=volume;charttype=line;crosshair=on;ohlc values=0;logscale=on;source=undefined (The higher, the weaker)

The same for the pound.

or we can look at the US Dollar Index 10 year

http://data.cnbc.com/quotes/US@DX/tab/2

Clearly the dollar index declined a lot since Bush took office to the end of his term.

So if you want to claim that Bush made the dollar strong before he left office, then you'd also have to say he did it by causing the financial crisis which cause people to sell their other currencies for dollars. Right? The USD index is going back to where it was before the financial crisis. Surprising? Nope, people have a lot more continence in other currencies other than the US, so they are selling off their dollars for something else. Is Obama making the sitution worse, probably, but the dollar was on a downward spiral long before he ever took office.

[rank is dumb]

[QUOTE=TheRealist;1305985]Who is to tell me what should be important in my life? That is different for each person. You can plead your case, but you shouldn't be able to MAKE people change by imposing on their civil liberties.

Im not trying to make anyone change.. Everyone can do as they please.. Not like it matters, we all end up dead in the end. I just feel as if soceity today is pathetic as a whole and it almost makes me ashamed to be human.. lol

You would think humans would learn from their own history but for some reason we don't lmao!!

[RicoVacilon]

CPI in January: 211
CPI today: 216

By the way dude, you realize that means the inflation year to date is 1.02%? Is that out of control to you?

And I am of course overlooking the fact that no one can say what the CPI is "today." In fact, on the day you wrote that, we only knew CPI for October.

[theanalogkid]

By the way dude, you realize that means the inflation year to date is 1.02%? Is that out of control to you?

And I am of course overlooking the fact that no one can say what the CPI is "today." In fact, on the day you wrote that, we only knew CPI for October.

Uhhh 216/211-1 = 2.36% what you calculated is actually 102% because you didn't subtract 1. You could also do (New-Old)/Old.

[kevin21boston]

Analog, the charts you showed me prove my point. Look at the Winter of 2008 and tell me that the dollar wasn't the strongest (in terms of performance) currency in the world. I assumed you knew that the US Dollar will never be the outright "most valuable" currency in the world as long as we have so much debt. Strongest yes, most valuable LOL HELL NO.



So if you want to claim that Bush made the dollar strong before he left office, then you'd also have to say he did it by causing the financial crisis which cause people to sell their other currencies for dollars. Right? The USD index is going back to where it was before the financial crisis. Surprising? Nope, people have a lot more continence in other currencies other than the US, so they are selling off their dollars for something else. Is Obama making the sitution worse, probably, but the dollar was on a downward spiral long before he ever took office.


Show me in which post I said that Bush made the dollar strong before he left.

The USD is going back to where it was because Barack Sackof**** is pissing dollars into the economy with no regard for the consequences.

This goes back to when I was saying that there was a huge oil bubble. The reason the dollar was down so much had nothing to do with any monetary policies we had. It was because oil is a commodity and the demand for oil was insane at the time. There has always been a negative correlation between the dollar and oil and most other commodities. When the oil bubble finally popped, the dollar recovered to where it should have been.

Basically what I'm trying to say is that these two miserable declines in the dollar are not at all related. One was driven by global economics and the current one is being driven by monetary policy. Two completely different things. That's why you saw the dollar recover as amazingly quick as it did, because the oil bubble popped so quickly.


You guys have to understand that currencies aren't supposed to move 30% in a year, let alone months. The last year has been historical in the sense that we've seen a bull and bear market for the USD within a year. It's not supposed to happen. Currencies are supposed to fluctuate a couple of percentage points per year. That's why currencies are an incredibly low risk investment, and that's why you can leverage up to 300% on currencies. You're not supposed to see so much volatility.

And to your last sentence about the dollar being on a downward spiral before he took office...I have to disagree because of what I said above. The dollar recovered. Obama had a nice fundamental base to recover the economy. Go look at the charts and see exactly which day the dollar began to crash. It's the same day the Stimulus Plan was enacted into law. That's not a coincidence.

[kevin21boston]

By the way dude, you realize that means the inflation year to date is 1.02%? Is that out of control to you?

And I am of course overlooking the fact that no one can say what the CPI is "today." In fact, on the day you wrote that, we only knew CPI for October.

Apparently when you got your supposed master's degree basic elementary mathematics was not a requirement. :rolleyes:


Anyway 2.36% is a big deal, especially considering the following:

-The economy was facing DEFLATION for the first time in a long time before Obama slithered in.

-With 10.2% unemployment how did prices rise? Less employed people = less money in the economy = lower purchasing power. Please explain this one Rico. I would love to hear take on this.

-How is the CPI rising when the GDP is falling?



Rico, as much as you want to debate me on this, you're wrong. You're flat out wrong. There shouldn't be inflation in this economy. The fact that our inflation resembles that of an economy that should be growing 2-3% a year is very alarming.

There are severe fundamental problems in our economy right now and it's going to get much worse.

[RicoVacilon]

Apparently when you got your supposed master's degree basic elementary mathematics was not a requirement. :rolleyes:

Instead of saying I'm wrong, show that I'm wrong. The inflation rate is based solely on CPI, correct? You take current CPI and divide by the former CPI (usually a year ago but you can play with it however you want). Is this incorrect? 216/211 is NOT 2.36 as you say below. So please show me where I'M wrong. And 2.36 isn't "high" inflation by any stretch.


-With 10.2% unemployment how did prices rise? Less employed people = less money in the economy = lower purchasing power. Please explain this one Rico. I would love to hear take on this.

-How is the CPI rising when the GDP is falling?

Well, considering that the only accurate way to compare CPI is to do it without changing the month (people buy more in Dec ya know?), Oct 2008 the CPI was 216.573. The latest CPI figures we have, Oct 2009, the CPI was 216.177. Resulting in an inflation rate of NEGATIVE .17%.

Now you can talk about how bad the economy is, how much it's getting worsem, etc. Those are subjective statements which will resort in subjective arguments. But in your first post you declared:


inflation is out of control

So I decided to see if that was correct. It is NOT correct, so I pointed it out. Instead of fessing up to it, you tried to point all these other things out (such as how the CPI is rising) which are ALSO incorrect. So I'm not saying your big picture is wrong, but if you want to gain credibility in an argument, you need to let go of untenable points that can empirically be proven false.

[theanalogkid]

Instead of saying I'm wrong, show that I'm wrong. The inflation rate is based solely on CPI, correct? You take current CPI and divide by the former CPI (usually a year ago but you can play with it however you want). Is this incorrect? 216/211 is NOT 2.36 as you say below. So please show me where I'M wrong. And 2.36 isn't "high" inflation by any stretch.

211/211 = 1 right or 100%, so by the way your calculating it, 216/211 = 102%

The formula for percentage chance is New/Old-1 or (New-Old)/Old

[RicoVacilon]

211/211 = 1 right or 100%, so by the way your calculating it, 216/211 = 102%

The formula for percentage chance is New/Old-1 or (New-Old)/Old

I assume you can shift decimals on your own. But you're right. . . maybe Kevin can't.

[theanalogkid]

I assume you can shift decimals on your own. But you're right. . . maybe Kevin can't.

Well anytime you see economic or financial news you'll always see the actually percentage change, no 'please make sure you subtract 1"

[kevin21boston]

lol Rico do even know what the CPI is?

For most economic indicators you have to use year over year, but with the CPI you don't have to. Inflation isn't seasonal.

And again, since you keep calling me out as to why I keep saying that inflation is out of control, I told you. It is out of control considering that consumer spending in this country has rarely been this low.


And no, CPI isn't the only measure of inflation. It's just the most widely used one. You can also look at the PPI and various commodity prices.

[RicoVacilon]

lol Rico do even know what the CPI is?

For most economic indicators you have to use year over year, but with the CPI you don't have to. Inflation isn't seasonal.

And again, since you keep calling me out as to why I keep saying that inflation is out of control, I told you. It is out of control considering that consumer spending in this country has rarely been this low.


And no, CPI isn't the only measure of inflation. It's just the most widely used one. You can also look at the PPI and various commodity prices.

Yet again, no proof that anything I said is wrong.

I dislike math, but I know how to do it and when I have to use math to prove a point I will. And I did. Inflation is NEGATIVE right now.

You must hate math more than me since you refuse to even use it.

I'm in a field that doesn't require the active use of math. If what you say is true, and you'd like to go into finance or economics, you might want to get a handle on that math aversion.

Now are you going to SHOW me how out of control inflation is? Or are you just going to keep running your pink haired head off? No, this isn't entrapment since you started it.

[TheRealist]

Update on inflation:

http://finance.yahoo.com/news/Spike-in-wholesale-inflation-apf-2682030532.html?x=0

Oh boy...

[bk1998]

Update on inflation:

http://finance.yahoo.com/news/Spike-in-wholesale-inflation-apf-2682030532.html?x=0

Oh boy...

It was only a matter of time.