Raul Paul Roasts Bernanke
 

i just watched the bernanke Q&A w/ the banking committee and he did a very bad job.

ron paul, on the other hand, while confusing himself a bit with his own rhetoric, delivered a great speech and bernanke didn't address the central question at all.

the give & take got me thinking though.

CPI/PPI etc. is definitely not correct int erms of measuring inflation.

but neither is MZM or any other money supply measure.

we need to take into account how much things actually cost on the street (obviously including food & energy, even in a volatility reducing trend pattern...like a 6MMA or something), i.e. the price that is paid in dollars for them.

but we should also consider the amount of money pouring into the system since that does have an important impact on the economy...though not directly to prices.

to say that one is 100% right is absolutely retarded. both have serious setbacks to getting down to what inflation *should* actually measure/how it should be measured.

the debate really brings forth the question of how should we measure inflation? there are claims that we are currently in a recession since RGDP as measured (GDP deflator) is actually negative when you "really" count "true" inflation. i don't think these claims are correct, but i also don't think the CPI/GDP deflator sufficiently captures "true" inflation.

so how do we fix this? perhaps a combo measurement? maybe 1/3 change in some measure of money, 1/3 change in headline prices, 1/6 new independent measure of change in actual money in the system intended for use, 1/6 new independent measure of overall price changes in the economy.

the last 1/3 (1/6 + 1/6) should obviously be conducted independently of the govt and any other organisation. it should be blanket funded by the govt but not tied to annual budget increases (don't know how this would work though [img]/images/graemlins/frown.gif[/img] )

anyways, those are some thoughts on the subject. i'm sure responses will run the gamut from "OMG YOU BELIEVE ANY CPI #S lol @ U" to "CPI IS KING" to "MONEY IS KING, just measure MONEY and you'lll get inflation"

but before writing anything like that, please consider that the point of this thread is to move forward, i.e. how do we best measure an important factor in the economy?

thanks and i hope this generates some good discussion.

Barron

Re: Raul Paul Roasts Bernanke
 

Why should we measure inflation?

Re: Raul Paul Roasts Bernanke
 

Raul Paul lol.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
Raul Paul lol.

[/ QUOTE ]

Wow I've been in this thread a bunch of times looking for YouTube and I never noticed that. [img]/images/graemlins/confused.gif[/img]

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
Why should we measure inflation?

[/ QUOTE ] Boom headshot.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
[ QUOTE ]
Raul Paul lol.

[/ QUOTE ]

Wow I've been in this thread a bunch of times looking for YouTube and I never noticed that. [img]/images/graemlins/confused.gif[/img]

[/ QUOTE ]

http://www.youtube.com/watch?v=yAwvlDJgJbM

Here you go! Ron Paul schooling Bernake!

Re: Raul Paul Roasts Bernanke
 

IMO, the best measure of price inflation is not a gigantic "basket of goods" that is heavily subject to manipulation, but rather the prices of homogeneous (or mostly so) goods that have many suppliers and many consumers and are not subject to great innovations in quality, like milk, eggs, white bread, newspapers, etc.

Including things like cell phones and consumer electronics in a price inflation index is ridiculously dumb. Costs fall so fast while quality increases so fast that you are artificially depressing the inflation index by conflating in a productivity component.

The idea that you need to substitute out goods because consumers would make substitutions in the face of rising prices (a Greenspan gimmick) is clearly designed to artificially lower measured inflation. Sure, a housewife might start buying less steak and more hamburger because the price of steak is rising, but the reason she made that choice is BECAUSE THE PRICE OF STEAK IS RISING.

The removal of so-called "volatile" goods from the index, like food and energy, is a similar tactic. Rarely do I see a newsreport anymore that actually reports CPI; they all seem to report "core inflation", i.e. with food and energy removed. By removing goods that are "volitile" in the short run, you also remove their LONG TERM contribution, which is large. Have any of you people gone to the grocery store lately? A gallon of milk is about $6 where I live. Don't [censored] try to tell me inflation is at 2%!

Lastly, I will say that these sorts of aggregate measures of the economy are always problematic, because they presume to do things that simply cannot be done (like add apples to oranges), and they are completely subject to manipulation in their definition and implementation by government bureaucrats. For instance government spending is included in GDP. In fact monetary inflation is pretty much the main driver of GDP growth, at least in the US. The same is true of unemployment numbers. Print a lot of money and hire people to dig ditches, for example, or build pyramids or WPA projects or bombs and tanks and dead little brown foreign people. GDP goes up, unemployment goes down, the economy is booming, right? But the capital stock is being consumed, productive capacity is being diverted from its most highly valued uses to lower valued uses, and people's real standards of living must eventually suffer drastically to pay for it all. But the numbers looked great!

That's the recession. The bill has come to the table and it's time to pay the tab. The moral of the story is that these economy wide econometric numbers really AREN'T that useful. The only number that is useful, imo, really IS the money supply. That's the one that drives the rest. It's the one that allows you to see the man behind the curtain and what he is doing to you and the economy.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
Raul Paul lol.

[/ QUOTE ]

He only went by "Raul" during that brief stint doing pornos in college.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
The only number that is useful, imo, really IS the money supply. That's the one that drives the rest. It's the one that allows you to see the man behind the curtain and what he is doing to you and the economy. ...

[/ QUOTE ]

Money supply in conjunction with a couple of other things but yeah I agree.

This has been discuseed before on this forum but I'll repeat it anyway, the U.S. government has a vested interest it would appear in understating inflation due to the fact that many government handouts have COLA increases based on the rate of inflation.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
IMO, the best measure of price inflation is not a gigantic "basket of goods" that is heavily subject to manipulation, but rather the prices of homogeneous (or mostly so) goods that have many suppliers and many consumers and are not subject to great innovations in quality, like milk, eggs, white bread, newspapers, etc.

[/ QUOTE ]

I think you have a huge potential problem in this in that the cost of many of these goods is directly dependent on other factors that ARE subject to great innovations. For example, if fuel costs decreased tremendously due to a new invention, the cost of milk would go down quite a bit. Newspapers are very dependent on the cost of labor, which clearly has huge impacts based on productivity (the computer made the costs of producing a newspaper go down tremendously), and cost of newspapers is usually a less important factor in their revenue as advertising.

I agree you are right that the way things are done poorly now, but even your basket of goods is still subject to much of the same problems.

Re: Raul Paul Roasts Bernanke
 

Nice post and nice bet on GS.

How & What u measure partly depends on how u will use those stats. To measure change in living standard? To determine optimal growth fosteringpolicies. To see how much power foreign economies have over domestic prices?

I think ur ? needs a bit more framing for a decent dialogue.

Re: Raul Paul Roasts Bernanke
 

The most ridiculous argument Bernanke threw out there was IMO, that retirees aren't hurt by a devaluation of the dollar, because they're buying consumer goods with the dollar? If the dollar is worth less, than companies have to charge more, ldo?

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
The most ridiculous argument Bernanke threw out there was IMO, that retirees aren't hurt by a devaluation of the dollar, because they're buying consumer goods with the dollar? If the dollar is worth less, than companies have to charge more, ldo?

[/ QUOTE ]

Most($) consumer goods are from China (pegged to USD) or made in US. If we purchased all European goods, we'd be in deep st.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
[ QUOTE ]
IMO, the best measure of price inflation is not a gigantic "basket of goods" that is heavily subject to manipulation, but rather the prices of homogeneous (or mostly so) goods that have many suppliers and many consumers and are not subject to great innovations in quality, like milk, eggs, white bread, newspapers, etc.

[/ QUOTE ]

I think you have a huge potential problem in this in that the cost of many of these goods is directly dependent on other factors that ARE subject to great innovations. For example, if fuel costs decreased tremendously due to a new invention, the cost of milk would go down quite a bit. Newspapers are very dependent on the cost of labor, which clearly has huge impacts based on productivity (the computer made the costs of producing a newspaper go down tremendously), and cost of newspapers is usually a less important factor in their revenue as advertising.

I agree you are right that the way things are done poorly now, but even your basket of goods is still subject to much of the same problems.

[/ QUOTE ]

Nothing's prefect.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
[ QUOTE ]
Raul Paul lol.

[/ QUOTE ]

He only went by "Raul" during that brief stint doing pornos in college.

[/ QUOTE ]

I KNEW IT.

Re: Raul Paul Roasts Bernanke
 

BORODOG for Treasury Secretary.

Re: Raul Paul Roasts Bernanke
 

Borodog,

In his Senate and House speech, I think Bernanke kept on emphasizing that the Fed does pay attention to headline inflation. The reason they focus on core inflation, the argument goes, is that that's the only type of inflation they feel they Federal Reserve has the power to control. If food and energy are volatile in a short time range, then monetary policy can't do anyting to fix them - and they could stem from supply shocks (which we can't really control) rather than increased demand (which we sorta can).

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
Borodog,

In his Senate and House speech, I think Bernanke kept on emphasizing that the Fed does pay attention to headline inflation. The reason they focus on headline inflation, the argument goes, is that that's the only type of inflation they feel they Federal Reserve has the power to control. If food and energy are volatile in a short time range, then monetary policy can't do anyting to fix them - and they could stem from supply shocks (which we can't really control) rather than increased demand (which sorta can)

[/ QUOTE ]

Right. Trying to come up with one number that is "inflation" is a quixotic quest. There might be one formulation that's most useful for monetary policy, one that's best for calculating COL increases, one that's best for deflating GDP, and one that's best for Austrian economic theorists, and they all might be different.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
How & What u measure partly depends on how u will use those stats. To measure change in living standard? To determine optimal growth fosteringpolicies. To see how much power foreign economies have over domestic prices?

I think ur ? needs a bit more framing for a decent dialogue.

[/ QUOTE ]
QMSFT, in response to bobman0330

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
Nice post and nice bet on GS.

How & What u measure partly depends on how u will use those stats. To measure change in living standard? To determine optimal growth fosteringpolicies. To see how much power foreign economies have over domestic prices?

I think ur ? needs a bit more framing for a decent dialogue.

[/ QUOTE ]
thanks and good point.

to expand, the POINT of the measurement would be for a number of things:

1) a "true" measure of inflation would deliver on average, higher nominal interest rates while possibly leaving real rates unchanged, thus reducing distortions in the economy. imo though real rates would also rise since inflation as measured isn't insanely off the mark (by like 5-10% as some people claim), though not by as much as nominal rates. basically, giving those that steer the economy w/ a clear bias for lower rates a clearer mandate to deliver higher rates.

2) to have investors of TIPS and otherwise inflation linked mandates (i.e. endowments/foundations sometimes benchmark spending on a "real rate" of 5% /year so 5% of assets. if inflation is 2% and their earnings are 10% in a year, they'll set aside 7% of those earnings in nominal terms to spend. now w/ a higher inflation #, a truer inflation #, they would set aside more and deliver more charity now vs. later when it would be worth -arguably exponentially- less)

3) to know more where we stand overall. i think #s 1 and 2 pretty much cover it but i needed a #3 [img]/images/graemlins/smile.gif[/img]

hope this helps frame the question better,

Thanks,
Barron

PS- i'm obviously an idiot typist. lol @ Raul Paul indeed. and also lol @ boro's post about him going by raul in his porno days

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
IMO, the best measure of price inflation is not a gigantic "basket of goods" that is heavily subject to manipulation, but rather the prices of homogeneous (or mostly so) goods that have many suppliers and many consumers and are not subject to great innovations in quality, like milk, eggs, white bread, newspapers, etc.

[/ QUOTE ]

I really like this point, my only question would be whether or not energy and fuel costs would enter into your equation.

edit: Covered, ignore.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
The most ridiculous argument Bernanke threw out there was IMO, that retirees aren't hurt by a devaluation of the dollar, because they're buying consumer goods with the dollar? If the dollar is worth less, than companies have to charge more, ldo?

[/ QUOTE ]

keep going with your example. you'll find that on the whole, companies will not increase prices for a number of reasons. so by going the company passing charges through route, you'll see that the actual costs paid in dollars aren't anywhere remotely close to the change in the value of the dollar on the int'l market. it would be like saying "omg, the dollar is strengthening, companies are charging less so we have more mani." by "we" i obviously mean those who consume almost entirely in dollars. in reality, it is the company that reaps the rewards in the form of higher margins. there are a ton of other variables here but i'm talking in the aggregate. the change in value of a dollar on the FX market doesn't have a big effect on those that consume almost entirely in dollars one way or the other...

overall, that answer was one of his better ones imo.

historical tests bare this out also (a reduced dollar doesn't have a huge effect on those that consume almost entirely in dollars).

Barron

Re: Raul Paul Roasts Bernanke
 

The thing is inflation doesn't really mean anything. It's taken on a mystical significance because it's another complicated and scary term that governments can use to increase their power base. "well we need a government or the inflation demon will get us". It's purposefully arbitrary and ill defined to keep most people in the dark. I don't need to know inflation is 10% I just need to know how much more my rent is than last year how much less my car's worth and so on. Bundling it all up serves no purpose for me it only serves those in power which I presume is why it is talked about so much and with so much reverence.

Re: Raul Paul Roasts Bernanke
 

Boro,

i like your basket of goods that have many suppliers idea. managing/determining it though obviously has issues...but as you said, nothing is perfect.

[ QUOTE ]
The moral of the story is that these economy wide econometric numbers really AREN'T that useful. The only number that is useful, imo, really IS the money supply. That's the one that drives the rest. It's the one that allows you to see the man behind the curtain and what he is doing to you and the economy.

[/ QUOTE ]]

this, however, is what i was talking about. real life, in the form of people living day to day hasn't been robbed like ron paul and you imply wiht this to the degree that the money supply increases.

sure, milk is whatever it costs, but that isn't a 20% yearly increase (or whatever money has averaged over a long time). further, important things like durable goods etc. aren't changing anywhere near what the money supply would imply they are.

additionally, money supply #s catch huge flows from assets to bank notes/credit etc. that aren't useful and bias upwards your "true" measure of inflation.

i'm not saying CPI is the answer, but that changes in money supply isn't the obvious answer either.

Barron

Re: Raul Paul Roasts Bernanke
 

I'm saying that money supply inflation is the driver, not that every price in the economy responds in the same way or in the same time frame. They don't. Some prices rise, others fall, and the time spectrum over which these changes take place relative to the time of the credit expansion is complex. I may go into it some other time, but I have to jump in the shower and go teach some swing ans salsa.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]

[ QUOTE ]
The moral of the story is that these economy wide econometric numbers really AREN'T that useful. The only number that is useful, imo, really IS the money supply. That's the one that drives the rest. It's the one that allows you to see the man behind the curtain and what he is doing to you and the economy.

[/ QUOTE ]]

this, however, is what i was talking about. real life, in the form of people living day to day hasn't been robbed like ron paul and you imply wiht this to the degree that the money supply increases.

sure, milk is whatever it costs, but that isn't a 20% yearly increase (or whatever money has averaged over a long time). further, important things like durable goods etc. aren't changing anywhere near what the money supply would imply they are.

additionally, money supply #s catch huge flows from assets to bank notes/credit etc. that aren't useful and bias upwards your "true" measure of inflation.


[/ QUOTE ]

Agree wholeheartedly with Barron here. This is where some of Ron Paul's supporters get me - how can you suggest inflation is higher than GDP growth over the amount of time we've been meaning measuring it faithfully? Shouldn't we have noticed a fairly severe decline in our standards of living by now? More importantly, even if headline inflation were as high as you suggest, it doesn't matter if the market has correct expectations of future inflation and adjusts nominal interest rates accordingly. If the government's numbers were completely wrong, we'd expect to see serious increases in interest rates as well as an added risk premium for not knowing the "true inflation rate" - moreover, an entrepreneurial opening for some firm that would collate and collect the true inflation rate that the market is trying to discover.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
[ QUOTE ]

[ QUOTE ]
The moral of the story is that these economy wide econometric numbers really AREN'T that useful. The only number that is useful, imo, really IS the money supply. That's the one that drives the rest. It's the one that allows you to see the man behind the curtain and what he is doing to you and the economy.

[/ QUOTE ]]

this, however, is what i was talking about. real life, in the form of people living day to day hasn't been robbed like ron paul and you imply wiht this to the degree that the money supply increases.

sure, milk is whatever it costs, but that isn't a 20% yearly increase (or whatever money has averaged over a long time). further, important things like durable goods etc. aren't changing anywhere near what the money supply would imply they are.

additionally, money supply #s catch huge flows from assets to bank notes/credit etc. that aren't useful and bias upwards your "true" measure of inflation.


[/ QUOTE ]

Agree wholeheartedly with Barron here. This is where some of Ron Paul's supporters get me - how can you suggest inflation is higher than GDP growth over the amount of time we've been meaning measuring it faithfully? Shouldn't we have noticed a fairly severe decline in our standards of living by now? More importantly, even if headline inflation were as high as you suggest, it doesn't matter if the market has correct expectations of future inflation and adjusts nominal interest rates accordingly. If the government's numbers were completely wrong, we'd expect to see serious increases in interest rates as well as an added risk premium for not knowing the "true inflation rate" - moreover, an entrepreneurial opening for some firm that would collate and collect the true inflation rate that the market is trying to discover.

[/ QUOTE ]

yea, wow. that is a HUUUUGE point that i've overlooked. well done.

basically, when you read (well written/researched) articles about other countries you see the "official" inflation figures and then the "estimated" figures (by some think tanks in that country and/or the US/developed world).

if the inflation #s were hugely off (as they are in those cases) a think thank would definitely be able to pick it apart. but their value in doing so is minimal if the #s aren't off by a ton and rather only off by a little here and there (i.e. <5-10% as many as i've mentioned claim).

well said.

Barron

Re: Raul Paul Roasts Bernanke
 

All of the last two posts are wrong. Somebody PM me later to correct it. Got to run.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]

[ QUOTE ]
The moral of the story is that these economy wide econometric numbers really AREN'T that useful. The only number that is useful, imo, really IS the money supply. That's the one that drives the rest. It's the one that allows you to see the man behind the curtain and what he is doing to you and the economy.

[/ QUOTE ]]

this, however, is what i was talking about. real life, in the form of people living day to day hasn't been robbed like ron paul and you imply wiht this to the degree that the money supply increases.

sure, milk is whatever it costs, but that isn't a 20% yearly increase (or whatever money has averaged over a long time). further, important things like durable goods etc. aren't changing anywhere near what the money supply would imply they are.

additionally, money supply #s catch huge flows from assets to bank notes/credit etc. that aren't useful and bias upwards your "true" measure of inflation.


[/ QUOTE ]

Agree wholeheartedly with Barron here. This is where some of Ron Paul's supporters get me - how can you suggest inflation is higher than GDP growth over the amount of time we've been meaning measuring it faithfully? Shouldn't we have noticed a fairly severe decline in our standards of living by now? More importantly, even if headline inflation were as high as you suggest, it doesn't matter if the market has correct expectations of future inflation and adjusts nominal interest rates accordingly. If the government's numbers were completely wrong, we'd expect to see serious increases in interest rates as well as an added risk premium for not knowing the "true inflation rate" - moreover, an entrepreneurial opening for some firm that would collate and collect the true inflation rate that the market is trying to discover.

[/ QUOTE ]

yea, wow. that is a HUUUUGE point that i've overlooked. well done.

basically, when you read (well written/researched) articles about other countries you see the "official" inflation figures and then the "estimated" figures (by some think tanks in that country and/or the US/developed world).

if the inflation #s were hugely off (as they are in those cases) a think thank would definitely be able to pick it apart. but their value in doing so is minimal if the #s aren't off by a ton and rather only off by a little here and there (i.e. <5-10% as many as i've mentioned claim).

well said.

Barron

[/ QUOTE ]

I think your mistaken in thinking these places don't exist because your hung up on precision. Take a look at Peter Schiff's site, he has years of video interviews where he's the bear and the bulls laugh at him and talk about the record high for the Dow and how inflation is low. They ask him what he thinks real inflation should be and he basically says I don't know (sometimes he throws out a number in the 8-10% range). But he doesn't care about the number, he just cares about the concept, and once he got that right he's been killing the Bulls returns for nearly 10 years.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]

[ QUOTE ]
The moral of the story is that these economy wide econometric numbers really AREN'T that useful. The only number that is useful, imo, really IS the money supply. That's the one that drives the rest. It's the one that allows you to see the man behind the curtain and what he is doing to you and the economy.

[/ QUOTE ]]

this, however, is what i was talking about. real life, in the form of people living day to day hasn't been robbed like ron paul and you imply wiht this to the degree that the money supply increases.

sure, milk is whatever it costs, but that isn't a 20% yearly increase (or whatever money has averaged over a long time). further, important things like durable goods etc. aren't changing anywhere near what the money supply would imply they are.

additionally, money supply #s catch huge flows from assets to bank notes/credit etc. that aren't useful and bias upwards your "true" measure of inflation.


[/ QUOTE ]

Agree wholeheartedly with Barron here. This is where some of Ron Paul's supporters get me - how can you suggest inflation is higher than GDP growth over the amount of time we've been meaning measuring it faithfully? Shouldn't we have noticed a fairly severe decline in our standards of living by now? More importantly, even if headline inflation were as high as you suggest, it doesn't matter if the market has correct expectations of future inflation and adjusts nominal interest rates accordingly. If the government's numbers were completely wrong, we'd expect to see serious increases in interest rates as well as an added risk premium for not knowing the "true inflation rate" - moreover, an entrepreneurial opening for some firm that would collate and collect the true inflation rate that the market is trying to discover.

[/ QUOTE ]

yea, wow. that is a HUUUUGE point that i've overlooked. well done.

basically, when you read (well written/researched) articles about other countries you see the "official" inflation figures and then the "estimated" figures (by some think tanks in that country and/or the US/developed world).

if the inflation #s were hugely off (as they are in those cases) a think thank would definitely be able to pick it apart. but their value in doing so is minimal if the #s aren't off by a ton and rather only off by a little here and there (i.e. <5-10% as many as i've mentioned claim).

well said.

Barron

[/ QUOTE ]

I think your mistaken in thinking these places don't exist because your hung up on precision. Take a look at Peter Schiff's site, he has years of video interviews where he's the bear and the bulls laugh at him and talk about the record high for the Dow and how inflation is low. They ask him what he thinks real inflation should be and he basically says I don't know (sometimes he throws out a number in the 8-10% range). But he doesn't care about the number, he just cares about the concept, and once he got that right he's been killing the Bulls returns for nearly 10 years.

[/ QUOTE ]

ORLY. Do you have a link to his recommended portfolio returns?

AFAIK he's a book seller who's been predicting "impending doom" for the US economy for 20+ years, and Ive seen no verifiable track record of any specific portfolio. He's also a huckster for precious metals brokers. His support of Rue (not Raul) Paul is the surest path he could take to fulfilling his prophecies.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]


Have any of you people gone to the grocery store lately? A gallon of milk is about $6 where I live. Don't [censored] try to tell me inflation is at 2%!



[/ QUOTE ]

I'm not trying to undermine your point, I'm just asking a question here. Isn't part of the problem with the price of milk (and other consumables) that the supply is artificially constrained? I'm certainly not saying that the dollar value is not falling, but doesn't government subsidizing and control of supply and demand also have a pretty big impact on the price of some of these goods?

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
He's also a huckster for precious metals brokers.

[/ QUOTE ]

Well its lucky for his clients then that precious metals have been hitting 30 year highs.



[ QUOTE ]


ORLY. Do you have a link to his recommended portfolio returns?


[/ QUOTE ]

Drop by his website, he outlines their philosophy quite clearly. Either he's lying about supporting those positions since the 1990s or he's bought the absolute worst companies in those sectors or he's beaten the US market by leaps and bounds.

[ QUOTE ]

AFAIK he's a book seller who's been predicting "impending doom" for the US economy for 20+ years

[/ QUOTE ]

As far as being a book seller as far as I can tell from searches he has a grand total of one book out, released early this year. As far as impending doom he's been right, the last 5 years the US market has been one of the worst places in the world to put your money.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
[ QUOTE ]
He's also a huckster for precious metals brokers.

[/ QUOTE ]

Well its lucky for his clients then that precious metals have been hitting 30 year highs.



[ QUOTE ]

Even a blind horse finds the barn once in a while. The opportunity cost lost in precious metals for the last 25 years has a long way to go to catch up.


ORLY. Do you have a link to his recommended portfolio returns?


[/ QUOTE ]

Drop by his website, he outlines their philosophy quite clearly. Either he's lying about supporting those positions since the 1990s or he's bought the absolute worst companies in those sectors or he's beaten the US market by leaps and bounds.

[ QUOTE ]


As I expected, you can't support the claim that he's been "beating the bulls"


AFAIK he's a book seller who's been predicting "impending doom" for the US economy for 20+ years

[/ QUOTE ]

As far as being a book seller as far as I can tell from searches he has a grand total of one book out, released early this year. As far as impending doom he's been right, the last 5 years the US market has been one of the worst places in the world to put your money.

[/ QUOTE ]

research harder. He has had far more than one book out. Just because they were pulled because they were supposedly "timely", doesnt mean they weren't out

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
Raul Paul

[/ QUOTE ]

I think Raul Paul was the mastermind of the MLK assassination.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
Raul Paul lol.

[/ QUOTE ]


wtf. its Dr. Raul Paul. show some respect.

Re: Raul Paul Roasts Bernanke
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]

[ QUOTE ]
The moral of the story is that these economy wide econometric numbers really AREN'T that useful. The only number that is useful, imo, really IS the money supply. That's the one that drives the rest. It's the one that allows you to see the man behind the curtain and what he is doing to you and the economy.

[/ QUOTE ]]

this, however, is what i was talking about. real life, in the form of people living day to day hasn't been robbed like ron paul and you imply wiht this to the degree that the money supply increases.

sure, milk is whatever it costs, but that isn't a 20% yearly increase (or whatever money has averaged over a long time). further, important things like durable goods etc. aren't changing anywhere near what the money supply would imply they are.

additionally, money supply #s catch huge flows from assets to bank notes/credit etc. that aren't useful and bias upwards your "true" measure of inflation.


[/ QUOTE ]

Agree wholeheartedly with Barron here. This is where some of Ron Paul's supporters get me - how can you suggest inflation is higher than GDP growth over the amount of time we've been meaning measuring it faithfully? Shouldn't we have noticed a fairly severe decline in our standards of living by now? More importantly, even if headline inflation were as high as you suggest, it doesn't matter if the market has correct expectations of future inflation and adjusts nominal interest rates accordingly. If the government's numbers were completely wrong, we'd expect to see serious increases in interest rates as well as an added risk premium for not knowing the "true inflation rate" - moreover, an entrepreneurial opening for some firm that would collate and collect the true inflation rate that the market is trying to discover.

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yea, wow. that is a HUUUUGE point that i've overlooked. well done.

basically, when you read (well written/researched) articles about other countries you see the "official" inflation figures and then the "estimated" figures (by some think tanks in that country and/or the US/developed world).

if the inflation #s were hugely off (as they are in those cases) a think thank would definitely be able to pick it apart. but their value in doing so is minimal if the #s aren't off by a ton and rather only off by a little here and there (i.e. <5-10% as many as i've mentioned claim).

well said.

Barron

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These will all be brief, because I have to get to bed to teach in the morning.

First of all, those alternative statistics do in fact exist. For example, one source:

http://i27.photobucket.com/albums/c1...rtSGS01-37.gif
Shadow Government Statistics

He does nothing except use the pre-Clinton definition of CPI.

More importantly however is that monetary inflation is largely hidden. A good chunk of it (about a third as a round figure) is exported and held by foreign central banks (e.g. in Asia & the Middle East). Another third or thereabouts had been hidden by increasing productivity. The last third shows up eventually in price inflation, which is then under-reported by government statistics by maybe a half or so. These fractions are rough estimates and can change over time for lots of reasons of course.

My third point is that we don't see an increase in interest rates because the Fed keeps them artificially low. That's how it inflates the money supply in the first place. Until the unsound fundamentals of the economy become so eggregious that they can't be papered over any more, and the Fed has to throw on the monetary brake. Interest rates jump, and people realize suddenly that their artificially inflated standard of living must now be payed for with a period of deprivation. The boom has to be paid for in the bust.

Lastly I will point out that even if you could correctly prognosticate what price inflation will be in the future, which is extremely difficult to do, given that you have little idea what Fed policy or foreign central bank policy will be a year down the line, nor can you predict what will happen to productivity, or any number of other factors that factor into, so that you could calculate what the "actual" interest rate should be, it doesn't help you as an entrepreneur. Why? Because you are trapped in a prisoner's dilemma. Businessmen all over the economy see an artificially lowered interest rate and are borrowing money to invest in expanded production. They are bidding up the prices of your inputs. They are squeezing your profit margins. If you don't also invest in expanded production, you can be put out of business. And as long as you can increse production and your output prices are rising, which they are because consumers are in a frenzy of boom-driven driven consumption, your profits will look great in the short run:

http://i27.photobucket.com/albums/c1...odog/crash.png

The problem is that input prices rise faster than output prices. Entrepreneurs are using their newly printed money to fight over too few resources to complete all the projects that have been started, and eventually the ride to the top of the rollercoaster is over. The artificially low interest rate drives a wedge between real savings and investment that can't be magicked away with still more paper money.

Now the [censored] is REALLY going to hit the fan when foreign central banks and investors start dumping the dollar. All those little greenbacks are going to come home to roost, and then we'll see what real inflation looks like. That's what happened in the 70s, and we're headed that way again. There were essentially 25 years worth of inflated and exported dollars that had to "clear" through back through the borders at the start of the 70s (from Bretton-Woods).

We've got about that much again.

Re: Raul Paul Roasts Bernanke
 

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Have any of you people gone to the grocery store lately? A gallon of milk is about $6 where I live. Don't [censored] try to tell me inflation is at 2%!



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I'm not trying to undermine your point, I'm just asking a question here. Isn't part of the problem with the price of milk (and other consumables) that the supply is artificially constrained? I'm certainly not saying that the dollar value is not falling, but doesn't government subsidizing and control of supply and demand also have a pretty big impact on the price of some of these goods?

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Farm subsidies and price supports are pretty stable over time. The fact that the price of milk at any one time is not reflective of a free market in milk production shouldn't distract from the fact that the price, whatever it is, is inflating pretty rapidly. Milk was just an example, by the way. Grocery prices have doubled in the last year, and are likely to double again in the next.

Re: Raul Paul Roasts Bernanke
 

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All of the last two posts are wrong. Somebody PM me later to correct it. Got to run.

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By the way, I apologize for the way this came off; I was really in a hurry. Sorry. [img]/images/graemlins/blush.gif[/img]

Re: Raul Paul Roasts Bernanke
 

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[ QUOTE ]
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Have any of you people gone to the grocery store lately? A gallon of milk is about $6 where I live. Don't [censored] try to tell me inflation is at 2%!



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I'm not trying to undermine your point, I'm just asking a question here. Isn't part of the problem with the price of milk (and other consumables) that the supply is artificially constrained? I'm certainly not saying that the dollar value is not falling, but doesn't government subsidizing and control of supply and demand also have a pretty big impact on the price of some of these goods?

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Farm subsidies and price supports are pretty stable over time. The fact that the price of milk at any one time is not reflective of a free market in milk production shouldn't distract from the fact that the price, whatever it is, is inflating pretty rapidly. Milk was just an example, by the way. Grocery prices have doubled in the last year, and are likely to double again in the next.

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Whatever dude. My pure Chef Boyardee diet's been at a dollar a can for a decade!

Re: Raul Paul Roasts Bernanke
 

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Why should we measure inflation?

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I think that analyzing price levels is useful for consumers. Even in the absence of monetary policy designed to "manage" inflation, price levels in any geography will change over time and consumers in that geography may want to know.