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The Inflation thread


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In reply to: ydoidoit on Saturday 22/12/07 01:20pm

I think we have fallen in love with the good life.

I finish work early next year on a reasonable wicket but i have a feeling it will not be long before expanding lifestyle needs see me back in the workforce in some capacity.

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In reply to: 328jet on Friday 14/12/07 09:06pm

Hi there inflationaries,


It's not easy fighting inflation in China:



And same problem, but for different reasons in the US:



"Wall Street will be looking closely at the U.S. Producer Price Index for December released on Tuesday, and the Consumer Price Index on Wednesday for signs of growing inflationary pressures"


Interesting week ahead? I'm sure they will have the PPI and CPI cooked to perfection?


I just got my favourite book (The coming economic collapse. How you can thrive when oil costs $200 a barrel) back from a friend and I was just flicking through it. I was looking at the part where he looks at what went well in the 1970's and (bear in mind, it was written in 2006), besides gold and gold shares, Oil and Oil Service, he identified real estate. And this is what he said: "If the bursting of the tech bubble in 2000 was a rain shower, then a bust of the housing boom today would be a category 5 hurricane. But that is exactly why we do not think it will happen. On the contrary, we think real estate still has merit as an investment, just as it did in the 1970's. The trigger that could pop the real estate bubble would be significantly higher interest rates, the kind typically used by the Federal Reserve Bank to slow inflation. But in today's world, with our high levels of debt, an aggressive interest rate policy would run the risk of not just lower real estate prices, but severe recession. We doubt the Fed is willing to take that gamble. Inflation, though the worst choice for most investors, is the only choice for politicians. Indeed, high inflation will reduce the economy's dependence on debt. As it further boosts the prices of homes and other real assets, it will diminish the burden of the debt underlying those assets. The same holds true for government as well as individual debt. The government will see the advantage of letting inflation rise and keeping the economy growing. That will maintain tax revenues and make government debt a smaller percentage of the economy-and so more manageable."


So the question is: If the Fed drops interest rates aggressively as they did post-tech bust, can they avoid recession? And if as a result inflation runs out of control (even though official figures may not show the full extent of this - the gold price certainly will), will house prices avoid collapse and actually recover? And, how will the result, hyper-inflation (with watered down reporting) finally bring down the US economy?






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The official figures are false according to this guy who has been exposing the official manipulations for quite some time:





Real CPI inflation in the US is now just under 12% p.a.!!!!!!!!!!!!


And here in NZ, it's hard to believe inflation is only 3% when many things are going up in price by leaps and bounds.



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even offical govt websites will confirm to you that the US government has countless times changed the methodology by which they calculate inflation.


Thus, even if you accept the present calculation as accurate and reasonable, it is a nonsense to compare one period in US history with another!

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In reply to: neuchatel on Monday 14/01/08 08:20am

The official figures are BS - inflation is running at about 3 times what is actually being reported. Those fools who believe the BS that the Reserve Bank will raise interest rates at their meeting in Feb are Cannon Fodder.


I rest my case until the RBA announcement.

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