Hiding a Recession

[The once and future king]

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DcifrThs

You havnt answered my question. Tips might have compensated you enough to cover purchasing power in relation to the basket of stuff (consumer goods), but I cant see how over the period in question it would have compensated you for the loss of purchasing power against a basket of assets.

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i gotcha. i misunderstood what you were saying and concentrated much more on the market action.

TIPS don't cover the "basket of assets" as you know and pointed out so they wouldn't have covered your exposure to, say, milk.

if you consume the basket of goods though, you'd be covered, at least in some way. the market though would still react to the inflation expectations vs. historical realized infaltion.

Barron

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Yea, what I am trying to get at is that Bonds etc are sensitive in the main to basket of stuff inflation, but are less sensitive to basket of assets inflation.

So if you have a massive increase of liquidity/money supply etc, but that all gets channeled into asset inflation but not the basket of stuff inflation (As is the case in the period under discussion), you wont be able to reverse engineer the conclusion that there had been a massive increase in the money supply (inflation) by looking at movements in the bond market.

[lehighguy]

Ask and you shall recieve.

http://goldprice.org/gold-price-hist...ear_gold_price

This takes you to 2005, you already have the rest.

http://www.wtrg.com/oil_graphs/PAPRPOP90.gif

[pvn]

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Take those graphs and find 5 year versions. All of these trends have been prevelent for the 2001-2008 time period.

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oil has not. gold has not.

please paste the graphs that show gold prices anywhere remotely close to where they've gone for the past year. same with oil.

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[hmkpoker]

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toafk,

Not all prices increase, obviously. Technological progress and increasing productivity acts to offset the effects of monetary inflation on prices. That's what I'm saying; monetary inflation is "hidden" in lots of different places; some price inflation, but exported inflation to foreign reserves, increasing productivity, and temporal delay all act to mask the negative effects on consumers. Couple that with totally bogus CPI numbers . . .

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I think a lot of people don't realize just how much productivity has increased. In the past two decades, America (and the world) have gone through an explosion of innovation that is at least as significant as the industrial revolution. The information age has literally eliminated scarcity in a major, major part of the economy, and has performed miracles for small and big businesses, marketing, consumers, artists.

...yet somehow, our quality of life is not much better than it was before the internet. The wage slave, paycheck-to-paycheck paradigm still dominates. One has to wonder when the hell we're going to experience the economic "information revolution."

If you're wondering when the next great depression is going to come, we're already in it.

[DcifrThs]

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Take those graphs and find 5 year versions. All of these trends have been prevelent for the 2001-2008 time period.

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oil has not. gold has not.

please paste the graphs that show gold prices anywhere remotely close to where they've gone for the past year. same with oil.

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pvn,

the period from 2001-2005 is clearly what i meant. note that gold gained about 50% from that entire period whereas in this one year it jumped 33%. also note the relative slopes of the lines from 2001-2005 and then this year's.

also, where's the graph of oil? can you put that one up as well? thanks.

Barron

[DcifrThs]

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Ask and you shall recieve.

http://goldprice.org/gold-price-hist...ear_gold_price

This takes you to 2005, you already have the rest.

http://www.wtrg.com/oil_graphs/PAPRPOP90.gif

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thanks. that basically confirms what i said. the oil "trend" started in 2004, but the hugest increases were clearly this year as that oil chart cuts off before where we are now.

Barron