Annual Inflation Hits 4%
There is the CPI... and then there is the MIT's billion price project which, as the name implies, tracks the prices of a billion products in real time. And according to the latter, annual inflation has hit a multi year high of about 4%. Perhaps someone can advise the talented Mr Evans that the 3% inflation he would so love to achieve... has in fact been eclipsed. At least, according to the real world. So take 4% inflation, add $2.5 trillion in "much more" easing, and what you get is only an economic Ph.D.'s guess. Alas, we are unqualified to have an opinion on the matter.
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Nixon imposed price controls at 4% inflation.
Interest rates would have to be 7% just to be 3% ahead
People are stirring.
Ben Bernanke Confronted by WeAreChange - YouTube
'stirring?!'......they're STARVING elsewhere in the world
here they're debating between watching 'Dancing With The Stars' and the new '2 1/2 Men with Ashton what's his name' next Monday
I realize that.
This was more of a response to someone in another thread who said that The Bernank was inaccessible.
What's encouraging is that the author of that piece is apparently under 25, maybe a college kid, and he's not just bitching about not getting free tuition anymore.
Ha! Tyler doesn't have a PhD.
I've got three of 'em! Check it out:
http://www.calsouthern.edu/
I see it still stands for "Piled higher & Deeper" :p
Yes, Ph D, I have one. It means poor horny and desperate.
look at Rockefuker confronted this year in Chile
http://bit.ly/nRQLsv
the guy goes wild... tells Rockefuker he shoudl kill him right there
i? amazed that pos goes around without a dozen bodyguards and arrives at a civilian airport... WTF el cheapo
While I agree, its strange that he travels the way he does, I'm sure 99.99% of the population has no idea who he is (or what he looks like).
When they hear his name, they just think of Jay-Z and his record label.
@Spitzer
The cost of money should be much higher, instead we get ZIRP until 2013. There will be blood in the grocery aisles.
That's right.
This is really a sad situation. The only positive is that after the bloodshed, Keynes will be put to rest for ever.
I don't see it beneath The Bernak & Group to oh, drop 50% of what most people buy from the CPI, and then, voila! Inflation falls, Bernank-style.
Dude, Soylent Green is still a steal at $2 New United States Dollars a kilo.
Remember. Tuesday is Soylent Green day.
You realize we're already halfway there? http://naturalnews.com/032718_L-cysteine_commercial_bread.html (and this is only what we know about...)
Keep dreaming, pal. Keynes will outlive America.
I love how Keynes has become an extension of Democrat which has become an extension of Socialism which has become an extension of Everyhting Evil In The World.
Get out of the false Left / Right paradigm.
40 years of unabashed free market "Fresh Water" capitalism under Democratic / Republican administrations destroyed the US economy and got us into this mess with no commentary what so ever.
And now 3 years of "Keynes," which ain't even Keynes, (how giving $4 trillion to the Wall Street banks that caused this crisis is "Keynsian" I'll never understand) has the blogosphere all up in a hissy?
This is soooo correct.
Keynes would NEVER agree to the way his views have been bastardized. In fact, if he were to be in the US today, he'd point out it's impossible to run a deficit that "pays for itself" as a "pump primer" simply because the debt load would undermine the effects of any stimulus.
The idea that socialists are Keynesian, or anything like that, is absurd. Even proponents of the Austria School, such as myself, recognize that Keynes wasn't "wrong" in the sense that what he suggested wouldn't work - its effects are muted, at best - but that he was wrong because he opened the door to abuse by an elite class of individuals who lacked the training to know how to manage the system in any meaningful way, and that it would lead to the abuses we've seen.
"Cleanup on aisle 6...and 7...and 9...and 13...."
And don't mouth off to the meat cutters either or it will be you they are selling at $5.60 a pound. Hamburger up 60% so far this year and going higher.
Of course we have to pay it, we can't just starve. But every dime of increase in food and fuel and utilities and rents is just that much less to spend in the rest of the economy, and since we are in a stagflation recession now I am betting there will be depression by year end. QExyz and then some but every day costs go up wile the rich get richer and the poor get fucked.
I am SOOoooo glad I got my Irish passport back in 2002. A nice neutral island nation with an agricultural economy will come in very hand here soon.
Yeah, while I've been stocking up on goats, chickens rabbits and seeds, I've thought that it does not have to come to complete hyperinflation for this stuff to come in handy.
A more vegetarian diet among more Americans would help most folks' health, so there'll be an upside when the Medicare system falls apart.
That's only true if they can avoid filling their bellies with grains and starches (diabetes, anyone??) and get plenty of raw, living phytonutrients, preferably the Southern-grown variety that doesn't cause hair loss and won't give their thyroids mutant superpowers! ;)
Real short term interest rates are negative, in fact more negative than at any time in the 70s. That is just asking for trouble.
They need to update the map.
http://chartsbin.com/view/1363
@Spitzer,
This means real inflation is going around 12%. Adjust that 7% interest rate to 15%.
What they need to do is break it down by consumables you need like food, transportation, and fuel and things you don't need like plasmas, iPads, and Margaritavilles. This is still biased by deflation due to technological progress with crap we don't need.
Exactly, I'm sure stupid shit like iPads are one of the billion prices they track. The MIT data is just as much of a lie as the government's CPI.
I appologize for highjacking the thread. I have limited time today to research.
Does anyone know if housing prices are in the billion? 'Cause that makes a big difference if it is.
There was a good description of the BPP when they first introduced it here at ZH. From the MIT webpage:
The Billion Prices Project is an academic initiative that uses prices collected from hundreds of online retailers around the world on a daily basis to conduct economic research.
Our research uses high-frequency item-level data to study pricing topics in Macroeconomics. These are some of the questions we are currently working on:
So, real estate is not in the mix, but I still doubt it is much of a reflection of actual consumer prices in the USA, though it does have applications for a lot of good research. Since food, rents, utilities, and fuel are a large part of our inelastic budgets, and they are not sold by online retailers for the most part (or at all) these would appear not be getting measured at all.
For what it is worth here is the link: http://bpp.mit.edu/ and when you go to the page you will see near the bottom that there is another link to PriceStats which is a private for profit propriatary data collector of inflation/price data.
If you want to know what inflation is doing just stay aware of the prices you pay for the things you buy. Because you are not going to get truth from government, and anecdotes we post about prices might be interesting and fun but not particularly relevent to you. I prefer to think of it all as a sort of personal index, income in verses prices I must pay = standard of living. Since I am on a fixed income the income side is pretty easy, it has not changed since BushCo was in office. The outgo part according to the CPI-W is about 2% less than it was in 2008, but since that measurement dictated my last raise I find in my real world I have lost about 30% of my standard of living. I have only been able to keep going and stay out of bankruptcy court by ditching my mortgage in favor of cheaper rent. But that will not last either, rent will go up by a good 15% at least when my lease is up next April.
Thank you!
No QE3. They can't let inflation get away from them. If they had to really jack up interest rates to stop inflation, it would lead to total scroomage.
Scroomage? Is that a scottish word? No worries I get the jist, and I will go out on a limb and say we'll get to witness this scroomage first hand in the near future.
Scroomage v: [Fr] sound the blade makes just prior to its abrupt stop.
Inflation got away a long time ago.
Anybody who believes inflation is just 4% watches too much TV. And as a act of kindness,
Needs to pay the difference over 4% on my electric bill, my perscriptions, my land taxes, my food bill and the beef.
It's the beef I got a beef with. Meats have doubled. I don't what others eat, but hamburgers and hotdogs never work for me.
Used to live on 99 cent packages of hot dogs in college. Now they're overe $4. A pound of bacon is over $7. Saw a rib roast at $52 the other day.... gagged. WTF?
Heating oil was under $1 when we bought 17 years back. Now? Can't imagine the price this winter......
My house is still worth 3 times what I paid (IF I could sell it) but the taxes have gone up OVER 3 times..... taxes are forever. Even when you own a house you can lose it. Local property taxes here are more than my refied fixed 5% 15 year mortgage payment.
Yeah they doubled my property taxes this year. Such a bitch. One of the great things about where I lived had been the fairly low property taxes since the property doesn't cost much here. It is a real struggle for us to pay it too. It's made us feel much poorer.
I'm sure the renters voted it in, not understanding most landlords will just pass it on to them.
The food prices are a real issue for us too.
We are pretty much on a fixed income. We have an RV park, but I have not raised rates yet on the people because I have a devotion to low prices, but I will not be able to keep it up forever probably with the way things are going. So many of our expenses are up.
It's enough to make you a libertarian.
In our area 30-35% of our population is on welfare, living in subsidized housing or receives some other type of taxpayer funded assistance. Add in the college students and professors and you have closer to 50% of the population that will always vote for any type of property tax increase to fund whatever the need for the day here is.
My appraised (taxable) property value is back to almost what it is actually worth but the percentage I pay has increased every year.
Dupe...
William: That boat sailed where have you been? Just because they do not report inflation does not mean it is not out there.
Screw inflation... full steam ahead. Oh, I forgot to say bitchez.
I think you better speak with Roubini, he knows better. He agree's with bernanke, there is no inflation and Gold is not money, so stop with the nonsense, he is right,because he said so
If Gold isn't money, it's a commodity and INFLATION on the commodity Gold IS 28% THIS YEAR!
QE3 is dead. Political suicide for the 'non-political' Federal Reserve. Fukushima glow-in-the-dark hot potato...
-
Fed Divisions Led to a Compromise on Interest Rates
New York Times By CATHERINE RAMPELL Published: August 30, 2011Even if they do something, of the options that the FOMC has left, none of them will be beneficial to the S&P in the manner that QE2 was. Apparently, Mr. Market hasn't thought through these options as none of them will involve Brian doing his weekly POMO ES buys.
I have to agree there is growing political risk. MIT's increase through the end of August would be 4% for the past 12 months but the public's feel for that same period would probably be higher.
Since that same public needs a calculator to do addition & subtraction, a simple extrapolation for the YTD trend (with no QE3 for July & August) suggests an overall relative number for the year of 6%
BUT ... add QE3 in for the final quarter ... I am going to do some fuzzy math in my head ... overall 9% for the MIT BPP for year end 12/31/11 and gold will have hit the $ 2,500/troy oz price point in December.
At which point, at least one major Democrat will announce their candidacy (cough: Hillary) for the Demcratic nomination (sotto voce: Clinton) and the odds go to 5-4 on Mr. Bernanke announcing his resignation for "health reasons".
barliman
I do not need a calculator to know that my electric utilities have gone up 21% in two years in spite of the fact that the Bonneville Power Authority has such a surplus that they have had to shut down hundreds of windmills in the Columbia Gorge.
I need no abacus to figure out that cable has gone from $119 to 140 for a neat 17.6%.
Bread has gone up 50%, beer up 25%, produce, more than double for most of it in a year. Avocadoes alone from 50 cents to $1.89, well over 300%. Gasoline, started to go back down from the May/June peak but is now rising again, up 12 cents this week to $3.79, but of course I have to use premium which never went below $4.
Inflation scares the public even worse than unemployment does I think, because unemployment makes life hard for 10% of the people but inflation gets us all. And I am pretty shocked that you hear almost no bitching about it, this round of economic nightmares seems to be getting met with such apathy that our congresswhores think they are getting away with it.
Yes, when will we see anything but apathy here?
$140 for cable? I have a tip for you. Spend $500-700 on a HTPC (build your own or buy it from Dell). Download all your movies and music for free. You'll have practically on demand entertainment for free. Better service that will pay for initial investment in 4-5 months.
*sends tarsubil DMCA notice*
I am not a very tech savvy person these days, used to be before retirement but tech has changed a lot faster than my ability to follow it, therefore your post was incoherent to me. It is just easier to pay Charter the $140, and that covers high speed internet, home telephone (I do not even own a cell anymore, victim of all the zero percent inflation we have had, can't afford such luxury) and expanded basic cable which is pretty much total bullshit at least for 6 months of the year.
This time of year I go to the video store for movies a lot, but the price for those has just not quite doubled in the last year, I could get them cheaper by using Red Box or the new Blockbuster ATM type dispensers, but I do not trust those. What happens if there is a problem with your disc? What if you rent your movie and when you go to return it find the machine vandalized or just gone? Or there is a long line of people waiting? With bricks and mortar video stores you just drop it in a slot and go.
Perfet! 4% "Real" consumer inflation. And plunging house prices, real incomes, consumer confidence and employment. Or stated another way: Contracting economic output, expanding input costs.
That's biflation, baby! And yes, you can thank the decades of reckless monetary policy for the chickens coming home to roost.
QE3 would be like pouring jet fuel on the fire.
Have you checked out John Williams' site? He has inflation at 11% or so. We're already there. The fire is raging, and the fuel has been added. Maybe we could throw in a bomb to make it even worse!
I hear ya bro. Benny boy and the Feds were playing with matches when a funny thing happened.
What's not funny is how biflation is rotting out the core of the economy. And there are no easy solutions.
All Federal Reserve (criminal organization, by the way; a strong case can be made under U.S. Code that the Federal Reserve is illegal as it is constituted, and has no proper authority to indirectly or directly coin money) members should have to wear Scarlet Letters wherever they travel, in the form of MIT's BPP being stapled to their foreheads and/or chests.
There might will be a day in the future when they wear bullet holes on their forehead. At least if the sheep ever find out the real purpose behind the FED.
pods
"And there are no easy solutions."
I think the time for solutions has come and gone. Thus, central banks have begun hoarding gold to hedge against an empending global monetary collapse. If an economist has to trot out some sort of 5th order partial differential equation to explain to me how his theory is correct, then we're fucked already. It's that simple.
So you're saying that you want to believe your own lying eyes, rather than some pulled-out-of-the-ass partial differential equation? Me too.
My humble attempt at parody:
Bennie and the Feds
Hey kids, step over to the printer
Our new policy action
Is just in time for winter
We’ll pound the last few basis points left
Into the ground
You're gonna’ see how negative interest
Is made to compound
Oh,Barry and Timmy, have you seen them yet
But they're so spaced out, B-B-B-Bennie and the Feds
Oh but they're weird and they're wonderful
Oh Bennie he is really mean
He’s got Keynesian roots, an Armani Suit
You know you’re going to need some Vaseline
B-B-B-Bennie and the Feds
Hey kids, just try to get some credit
When you are jobless
And starting to get desperate
You might survive if you sell your house off for a song
And your family is out on the street
Panhandling all day long
Oh,Barry and Timmy, have you seen them yet
But they're so spaced out, B-B-B-Bennie and the Feds
Oh but they're weird and they're wonderful
Oh Bennie he is really mean
He’s got Keynesian roots, an Armani Suit
You know you’re going to need some Vaseline
B-B-B-Bennie and the Feds
Local Pittsburgh TV reported the other day that a basket of 16 food items they track has gone up 8% in the past year.
I hope they are tracking the size of packaging as well..
now you're really knocking on bernank's last bag of tricks...
Get your bell bottoms and hip huggers out. Stagflation is back in style thank s to Uncle Ben and Tiny Tim
Listen. The '70s were a paradise compared with this (I keep sayin): 1978 GDP (nominal) Q1 10.9%, Q2 13.4%, Q3 13%, Q4 14.5%. There was big income growth (today we're contracting) and house prices were on the rise. Unemployment? 5.8-6%.
Get the picture? Nothing like now. We still had an economy.
@Cavier Emptor
God as my witness, I would suffer through macromae a thousand times over if we could bring back anything resembling the soundness of the 1970's economy compared to now.
Ditto, exploding Pintos and all.
I read that as, "Gold as my witness."
I've been spending way too much time on this site.
The Jimmy Carter years were the best with Volker at the helm and interest rates at...... drum roll please..... 17%.
MIT isn't shuffling their goods basket properly ...
They forgot to replace the steak with dried dogfood
I am thinking that the dried dog food was "house brand" at that.
I got some house brand kitty crunchies for my cat once, he started foaming at the mouth and rolling like he was possessed. It was horrifying and hilarious all at the same time. Looked like he ate a few Alka Seltzer.
I think I lost a cat a couple years back from the Chinese melamine thing. Alley cat, perfect health. Had to keep him inside for a week as he beat the hell out of a neighbors cat and bam, kidney failure.
pods
the huge rise in dog/cat DIABETES - including daily insulin injections! - can be traced right back to what they're being fed. . . cats are carnivores, they're not grain eaters - feeding them dry kibble, particularly the cheaper versions which include GMO corn/grains, means they're getting almost nothing of nutritional value in their food.
most people don't realise that as human food has been degraded over time by corporate fud-stuff, animal foods are hugely affected, and pets are now on "insurance plans" for their medical visits too - it's sickening, literally.
(not meant to be an attack here, feeding feral/abandoned cats is a kindness - it's just that it's getting harder to be caring/generous, sadly)
There supposed to take out everything that goes up in price -- who cares if the tracking basket is empty, right? I mean really it's not about tracking inflation its about making everything look stable. Obviously no one at the damn fed takes one trip to any grocery store or actually has to buy anything.
i am sure they buy plenty of stuff, those guys print their own money, why would they care about prices?
you just have to wait untill it trickles down to you.
Yeah we may not see QE3 in it's obvious form, should knock markets down now.
Nothing to see here people. Billion points of light shining on the obvious. What, you never seen 4%? Move along.
I said move along sir. Do not make me repeat my self...a billion times.
I do happen to have a that PhD and can have an opinion...and I'm with Tyler. Bernanke is a dumb ass...and his beard isn't all that nice either. No I didn't buy the PhD online, but you might as well if other doctorates lead to what we get at the Fed.
Favorite conference last year, "The Federal Reserve was a bad idea." Really cool speakers. And a spot-on premise.
Welcome to STAGFLATION!
eh, doeflation was better.
Here I would have thought it was quite a bit higher than that, given my own living expense profile.
I must be living richer. Bullish!
Call it what you want. Bernanke pledged near zero interest rates through 2013. That means buying up short term government bonds with the thought of expanding it to long term bonds. It's happening now. Gold and silver bitchez!
So how does the 30 year in price and drop in yield today then? A full two points today alone. With gold soaring. And equities up. All equities no less. Were there any stocks down today? Anywho I see food prices collapsing...where food is made of course. Back to a buck for a dozen eggs, tomatos for 25 cents, etc...etc...i also find it odd that the housing report is done year over year instead of one month to the next "to take out seasonal differences." really? what does seasonality have to do with housing in Southern California, Nevada or Arizona? And with 40 million plus shares of Lionsgate being sold outright by Carl Icahn--how scary is that?
They're planning a big fiscal stimulus package. That's what we'll get.
Good luck getting that through the house
It will. Don't matter what they say, watch what they do
What is the standard deviation around the the CPI number? Is that statistic even calculated, and published? My guess is that it is quite high; as high as it"s ever been in fact. We are living in a truly bipolar world where there is BOTH significant inflation AND significant deflation. The worst of both worlds, if you will. That has never happened in the past, at least not that I'm aware of...