Keynesian Economics

Originally Posted by ginwilly

when calculating inflation necessities like energy and food are for some reason not included, wonder why that is?
what costs are increasing at the highest rates?

inflation is like unemployment numbers, we can make them look like anything we want. It's hard to see gold double in price but say nah, the dollar is STRONG!!

What's included in the CPI changes all the time. It's an obviously manipulated number.

Food prices continue to skyrocket.

Originally Posted by mame

And btw ginwilly, youre putting words in krugmans mouth. He said from the very beginning that the stimulus was too small.

http://krugman.blogs.nytimes.com/201...mulus-worries/

Krugman also said that a housing stimulus was the best way to recover from the dot com recession. Good idea there Paul. He's a guy who won a Nobel prize for his work in international trade theory, not in overall macro economics where he has been very consistently wrong about very many things going back until he started making his thoughts public. He acts like he knows it all. A very dangerous mind set.

Originally Posted by mame

Of course, but golds recent rise in price is NOT inflation driven, because inflation has only been 2-3% in recent years and golds rise has been much more. The huge increase in the price of gold the last few years is explained by negative real interest rates.

This is an absurd statement on many levels.

CPI is a manipulated number. Real inflation is far far higher and it's evidence in soaring prices of many commodities. You can ignore this if you're crazy and always wrong about these things (ie: Krugman) or you can acknowledge it as a real problem that is only going to get worse in the future and try to find ways to address it.

Originally Posted by mame

If the inflation numbers are wrong, than real GDP and real wages MUST have been plummeting in recent years... Can you produce evidence of either? If not, than the inflation numbers are entirely correct (hint: real GDP and wages have not been falling). Also, the independent billion price project produces almost exactly the same number as the official CPI. The numbers aren't cooked. There is no conspiracy to hide inflation.

The basket of goods changes all the time. This is an accepted fact. ]

The output gap can be temporarily masked by printing more money, but eventually you have to pay the piper and malinvesting money you don't have isn't ultimately healthy for any economy in the long run. The Armenian government has for years claimed to have a growing GDP, but it didn't really matter because all the numbers were cooked. The people sure know it's a lie.

Originally Posted by NLXSK1

What you are saying makes no sense.


Lets say the price of meat goes up 10%.

That does not affect the GDP or the price of wages but cuts into people's disposable income.

Gas is twice as expensive as years ago, meat is 10-20% more expensive, gold is double, everything in the supermarkets is shrinking in size while remaining the same cost (they now have 20 packs of coke in some stores and I cannot even find the family size bag of ruffles chips anymore and the regular size is 4.99 at Walmart.

Everything has gone up and not by a piddly 2-3%.

If you cannot see it in your real life you are blind.

The reduction of quality in productions or quantity is another way inflation is masked, along with playing very fast and loose with definitions.

Originally Posted by OGEvilgenius

This is an absurd statement on many levels.

CPI is a manipulated number. Real inflation is far far higher and it's evidence in soaring prices of many commodities. You can ignore this if you're crazy and always wrong about these things (ie: Krugman) or you can acknowledge it as a real problem that is only going to get worse in the future and try to find ways to address it.

You're wrong. Just because you keep making the same assertions (that inflation is higher than reported) doesn't make them true. You've offered zero evidence that they're cooked... Your single argument seems to be that "soaring commodities" are evidence but correlation is not causation. I can make a very good case that gas prices are driven by rising global demand and rampant speculation because of instability in the middle east - there's no need to blame monetary expansion. Corn and wheat both have real supply/demand imbalances causin price shifts, etc... There's more to it than what you seem to think there is.

Besides, the independant billion price project has produced nearly the same numbers as the official CPI.

Going further, the models and fundamentals support the argument that inflation is around 2-3% as reported. The absence of falling real GDP and real wages supports the reported numbers and low inflation - even in the face of significant monetary expansion - as predicted by IS-LM. The evidence supports the official numbers.

Originally Posted by mame

. Corn and wheat both have real supply/demand imbalances causin price shifts, etc... There's more to it than what you seem to think there is.

.

Hold up. I'm *in* " BigAg , you're quite likely unaware of some of the stuff that goes on to create those same shifts and imbalances and take the profits created thereby. The manipulation is massive and the corporations are HUGE , and they do this at the expense of both the consumer and the small producer , the latter of whom they will absorb and then contract ,effectively turning them into sharecroppers.

These companies often own the various processing facilities too , and they;ve made a practice throughout the industries of shutting out the small acreage grower...example: certain olive processing facilities in Calif that shut out folks with less than ten sometimes less than 20 acres , along with the Sevillano and Manzanilla folks , the latter two going to the new machine picked sort of producing tree........guess who owns most of the acreage with those new trees and quarter million dollar harvesters.

Take a look at what you get for beef on the hoof as a producer , then take a look at what it costs in a supermarket. You know who is getting rich.

Originally Posted by OGEvilgenius

The reduction of quality in productions or quantity is another way inflation is masked, along with playing very fast and loose with definitions.

Egggggzackly. Lies.Damned Lies.And Statistics.