For Cottonpicken - a thread on the CWB

[cottonpicken]

Thats what i thought.I was wondering how much you really know.The inflation question was the proof i needed.

[chaffmeister]

If I failed so miserably, please tell us what it was you were asking for. Or what your answer would be.

(Remember, I did ask "Are you talking core inflation? Inflation as reported by central banks using a CPI (basket of goods concept)? <b>Or something else?</b>)

You can't just say I failed - you have to prove it. It's a credibility thing. (not mine - yours.)

[cottonpicken]

Inflation=m3-gdp

If you believe the government numbers i got some real nice beach front arizona property for you.

Now take a guess why the us government stopped reporting m3.

[chaffmeister]

Yup, I guess you got me real good.

I said “decrease in purchasing power”.

I could have said inflation is a rise in the general level of prices over time. (Pretty pedestrian I know, but correct nonetheless.)

Or I could have said the rate of inflation is the percentage rate of change of a price index (Oh yeah – that is what I said.)

I could have just as easily said inflation comes from too much money chasing goods and services. (Does this one sound familiar? It should. Note it says “comes from”.)

Or how about an increase in consumer prices or decrease in purchasing power of money (my original answer), caused by an increase in available currency and credit beyond the proportion of available goods and services (kind of what you were referring to). (This one kind of brings all the others together doesn’t it? Note again – it says “caused by”.)

Basically its cause and effect. When money supply (M3) is increased disproportionately to goods and services (GDP), you get a decline in purchasing power – or an increase in consumer prices. Inflation. Hence my answer.

What I would NOT have given as an answer to your question “what do you think the <b>rate</b> of inflation is?” would be “inflation=M3-GDP”, which actually refers to the <b>cause</b> of inflation, not the rate.

Now if you had asked, “what do you think b>causes</b> inflation?”, we’d be having a different debate.

But you didn’t.

I’m not going to debate whether govt reports are valid or not – that wasn’t the question.


CP ALSO ASKED: Now take a guess why the us government stopped reporting m3.

CHAFF: If you insist. Conspiracy theorists say that the US govt is manipulating the markets to boost (maintain) confidence (at just about any cost) because bad news can’t be handled by the masses. They adhere to the idea that the govt stopped reporting broad money supply estimates so that the public won’t know just how badly they’re manipulating the markets.

Good enough? (I should know better than to ask. Of course you won't think so.)

I know – you won’t like the reference to “conspiracy theorists” but it is a plan that can’t be proven, so by definition it must be a conspiracy theory.




What a waste of time…

[TOM4CWB]

Chaff...

The issues that are frustrating, and annoy folks... the subcurrents that are working below the surface messages main stream media promotes...

These are a huge influence today in investment paterns.

Good to see the bounce back in markets today...

[cottonpicken]

That is the inflation.
That is why commodities are booming.
That is why gold clipped 1000 dollars.
That is why i could call 20 dollar wheat-before it was cool.