will there be a QE 3 ?

Not in the slightest...imo.

As long as interest rates are artificially low (like they are now)...gold should always be at least a solid investment.

And considering Bernanke recently promised that he would not raise rates until at least 2013...I would say you have a lot of time.

 

^^^^

I agree....Bernacke just promised 2 more years of smooth sailing for gold LOL

 

Ok I am sold I will slowly buy some gold not much though as its expensive now

 

gold dropped over 100 dollars in the past couple of days...its as good a time as any to buy a little gold....like maybe an ounce or two!

 

It is DISGUSTING how they have allowed our currency to decrease in value by 2% every single year.

SHAME ON THEM for not changing the rate of inflation in any way when they should have MADE IT DEFLATE!

 

according to the price of gold and the price of oil it depreciated a heck of alot more than 2%.....keep watching the propaganda on CNN

 

I certainly will not watch CNN or any news on TV, I will read economics textbooks and The Economist.

Sigh you can't measure inflation by the price of gold, the most wildly and hilariously speculated commodity in history.

Let's measure inflation by the DOW! ....oh sh- start the presses!

 

but you can measure inflation by your own day to day expenses.....many things have gone up....food, gasoline, car repairs, university tuitions, utilities, property taxes, insurance, air fares, and a host of other stuff!

 

droughts, middle east unrest, fancier cars, historically counter-cyclical education industry performance, middle east unrest, property taxes didnt go up, insurance is industry specific, middle east unrest, and which other things?

Wood, steel, houses? "Core inflation"?

 

I am starting to understand why governments love inflation.....they know most just dont understand it.....they crank up the printing presses and then a year later when prices rise they blame political unrest or the chinese eating more or droughts etc......in case you didn't know.....there have always been droughts and political unrest in the middle east and as far as I know the chinese people were always there...its not like all of the sudden a billion people came out of nowhere!

 

Come on my friend, I gave you the example of wood and steel, copy and pasted from my etrade account:


S&P GLOBAL TIMBER & FORESTRY INDEX FUND - from my etrade account
Peaked at about $47 per share in mid 2008. Now it is at about $36

MARKET VECTORS STEEL ETF
Peaked at about $104 per share in mid 2008, now it is at about $55




You should be telling me that these two commodities are tied to the housing market.

The only reason that these prices went down so much is because the housing market itself was the bubble, and fanniefred caused it by not hating poor people enough.



What does your quoted statement say to me?

Are you telling me that the entire concept of

"Core inflation" vs "Headline Inflation"

has been fabricated in order to allow Ben Bernanke and his brethren to enrich members at the central bank and other banks who get a bunch of money when the fed does stuff?

Every single answer I gave you was some made up excuse that has been mouth fed to me by my liberal overlords?

Where do you think I am getting my information? I am making it very clear to you where I am getting my information, and you are not responding to those sources.


Or maybe it is Obama and any democrat who gets in power. All we democrats think about is how to FIRST get re-elected, and THEN get as much money as we can for either our local constituents, or some pet-goal we have like health-care-munism! And the only way we can achieve our evil goals is by increasing taxes! and then, when someone heroically destroys our ability to tax the freedom loving americans, we just print money! *Evil Laugh!*


Anyway, here is the price of food over the past 30 years.

You will see an obvious increase in the price of food as time moves forward. This increase peaks in 2008. It then drops, like everything.

It then increases AGAIN! It goes EVEN HIGHER THAN IT WAS IN 2008!

The price was higher, unlike the goods that I cited! Those goods were priced lower, like most of the goods whose prices are used to calculate what is called "core inflation." Like steel and wood.

But wait.... is there hope!?!? HOPE!??!

THE PRICE WENT DOWN!!! Look at the chart the price went down just now, as predicted by those of us "scientists" who thought that a typical drought caused the increase in food prices, not the radical communist/fascist agenda of al gore.


http://www.indexmundi.com/commodities/?commodity=food-price-index&months=360


For god's sake please go to that link and tell me what you think about the fact the price in food recently dropped. Was it because QE2 finally wore off? Is QE1 on that graph?




NEXT:

I made a chart from the data found at this website:

http://www.inflationdata.com/inflation/inflation_rate/historical_oil_prices_table.asp

Here is the image, it's funny look at it:



Here is the table of data, which is much more ambiguous:

2005 $57.57
2006 $65.03
2007 $69.51
2008 $95.25
2010 $55.96
2010 $73.44


Can we infer from this once yearly data that QE1 and 2 did something stupid and wrong to the economy?

The economy went up to $95.25 at the height of the recession.

Since then, it has been BELOW THAT POINT!!!!!

Does that NOT MEAN that we ARE OK!?!?

Do you see a huge trend that we SURELY CAN NOT ESCAPE?!!?!?



Please realize that when the economy does better, the income that the government receives from existing taxes gets MUCH better.

Please realize that I have come here to find out how it is possible that someone disagrees with JM Keynes.

I don't think it is totally impossible to disagree, but I went to school for a long time and I was never made aware of convincing evidence that shows the idea of counter-cyclical fiscal policy has failed. Teachers did try, I antogonized them.

I will be copy and pasting this content elsewhere as needed, as seems to be the custom here.

 

Sorry the graph I created using the freeware version of microsoft excel 2003 using OPENOFFICE.ORG which is a great program,

It put 2009 as the rightmost value on the line chart. I could not tolerate the fact that I knew the chart ended in 2010 and not 2009, and the freeware program just formatted it wrong, and so i did something.

One million bonus points to anyone who can find the subsequent inaccuracy that resulted from my haphazard attempt to change the data to suit my left wing purposes.

One million additional points to anyone who provides a response that contains knowledge of any kind.

 

what you are seeing now is the after affects of QE 1.....QE 2 wont show up for at least another 6 months if not more!

 

Well maybe that is possible, and then of course it was exacerbated by the civil war in every middle eastern country.

Surely you must admit that the price of oil went higher, at least in some part, as a direct result of the middle eastern overthrowings that took place during this exact time period.

I do believe the price of oil slightly started going up before the Tunisian fire man so good, my point is destroyed and it was only the communist Bernanke trying his best to somehow profit from his dishonest actions or he is just a brainwashed Keynesian.



Anyway, check out this graph (and FEEL FREE TO SUPPLY ONE OF YOUR OWN):

Taken from http://www.businessinsider.com/core-inflation-shows-the-fed-is-pushing-on-a-strong-2010-11






The dark blue line is the CPI without taking food and energy into account.

Is businessinsider.com a bunch of liars?

Why would the price of everything go down, except for food and oil?

Wouldn't a giant influx of money from corrupt politicians/communists cause the price of ALL GOODS to go UP and not DOWN!?

If, indeed, the corruptors have changed our prices at the consumer level with their evil deeds, is it bad that they got higher? Because look at them, they are low.

They are low according to this graph, and they are dropping. This is exactly what happened during the Great D.

JM Keynes was an outsider who had to fight the establishment. Everyone in the establishment thought that we need to make sure there IS ABSOLUTELY NO INFLATION EVER NEVER NEVER they actually wanted to stay on the gold standard!!

So JM Keynes had to fight and complain for years. He said look at our prices, this is stupid. (The prices changed in a way different way on a gold standard, but the concept obviously would look like this deflation with a fiat currency, not bound by some random commodity)

As you can see, core inflation ended up well BELOW ONE PERCENT at the end of 2010, and it is now all the way back up to 1.6% as of July. Is this too high?

What would NOT be too high inflation right now for you? 1%?

Does this graph show that food and energy prices have been so volatile as to warrant a measurement separate from other goods?

If you do not think that food and energy should be measured separately, why did food and energy prices change so much more than the price of all other goods in the CPI?

Isn't the fact that they changed so much more an indication to you that their changes CAN NOT have been directly influenced by monetary policy? (Maybe a policy that favors poor people on foodstamps but that is a stretch. Feel free to direct the debate towards this)


SO ANSWER THESE TWO QUESTIONS (or, preferably, all questions I ask):

Does this graph show that CPI without food and energy has declined since the recession, and CPI with food and energy is also at non-inflating levels?

Are the guys who made this graph at businessinsiders.com a bunch of corrupt politicians?

 

Yes.


http://www.fundweb.co.uk/bond-firms-stay-on-defensive-as-qe3-rejected/1037075.article


"In his widely anticipated speech at Jackson Hole, Wyoming last week, Bernanke did not launch QE3 but said the Fed’s policymaking committee will take an extra day at its next meeting in September to discuss the “merits and costs” of further monetary stimulus.

Between December 2008 and March 2010, the Fed issued $1.7 trillion of quantitative easing and last November it announced a second round worth $600 billion.


Stephen Snowden, the bond manager at Aegon Asset Management, says he was hoping that Bernanke would announce a third round of QE, which he says would have prompted a credit rally."

-------------------------------------------------------------

Bernake wants to do it, and they want him to do it. It will happen.

 

Two things about inflation:

1) My understanding is that 42% of the CPI is housing.

Now how many Americans are spending more on housing compared to a few years ago?

None too many I would suspect.

How can you when the price of real estate continues to generally fall and interest rates are at record low levels?

and 2) ...'Over the past 30 years, the federal government has made a lot of changes to the way it calculates inflation. It's taken place under presidents of both parties. Each change in methodology has come with plausible-sounding justifications. But, as if by magic, each change has had the effect of flattering the numbers. Funny, that.

According to one rogue economist, John Williams at Shadow Government Statistics, if we still calculated inflation the way we did when Jimmy Carter was president, the official inflation figures would look about as bad as they did when ... Jimmy Carter was president. According to Mr. Williams's calculations, if we counted inflation under the old system the official rate wouldn't be 1.5%. It would be closer to 10%.

Mr. Williams is just one voice. But it makes sense to treat the government numbers with skepticism.

Under the official calculations, if steak prices boom, the government just assumes you buy cheaper hamburger instead. Presto—no inflation!

Or consider the case of Apple computers. We all know Macs are expensive. And we know Apple doesn't discount. The cheapest Mac laptop today costs $999. A few years ago, it also cost $999. So the price is the same, right?

Ha. Not according Uncle Sam. Using a piece of chicanery called "hedonics," Uncle Sam calls this a price cut. His reasoning? You're getting more for the money. Today's $999 Mac is lighter, fancier and faster than last year's $999 Mac. So the government calculates that the "real" price has actually fallen....'

http://online.wsj.com/article/SB10001424052748704013604576104351050317610.html


The point is that the CPI is by NO MEANS a straight up calculation in the change in prices.

It is clearly set up to make governments look better by twisting the numbers to make inflation rates seem far lower then it really is.

 

I would say that this is not "chicanery" one little bit.

I am an avid follower of the computer industry.

The cost of a new computer used to be inflating very much, especially a laptop computer. These computers were getting so much better so fast (and therefore more expensive) that it was constantly a sign that video games were going to be more focused on "consoles" like the playstation and xbox. This mostly came true.

The computer is, of course, a massively better platform for video games, and so I have pursued this path in my hobby. I have clearly noticed a LARGE deflation in the price of computers, including laptops. I am about to buy a laptop with 8 gigs of ram and a nVidia card for $1200. One year ago I would have expected $2000 minimum.

This quote is from the Wall Street Journal, which I believe is now the Fox News Journal or something. The end of the story in your link describes:

Thanks random sports dude who I never heard of! How many Nobel Prizes have you won for Economics?

Also, the News Corporation property The Wall Street Journal ends their report on "Why You Can't Trust the Inflation Numbers" with an appeal to our sense of "omg we printed a bunch of money, surely this will cause inflation!"

They neglect to mention the negative of deflation. The cause of deflation is low aggregate demand. Nobody has a cure for low aggregate demand except for some sort of magical entity that can just *create jobs out of nowhere for no apparent reason*. There are literally no other plans to increase DEMAND FOR GOODS. Correct me if I am wrong.

There is no other way to increase DEMAND. We can stimulate supply all we want, like pushing on a string? They won't invest in a plan to sell goods to people who can't buy them.

According to your Shadow Government Statistics "citation" that you so graciously provided, the intent is not necessarily to prop up the communist dictator of the day, but rather to account for some RANDOM OBSCURE ECONOMICS JARGON THAT MEANS NOTHING called the "substitution effect" which may or may not effect the quality of american lives.

Here is your source that I wish you would have quoted for me:

So they re-adjusted inflation because they know that Americans are perfectly capable of choosing hamburger instead of steak.

I was actually struggling to find a way to argue with this.

I thought it would be difficult to explain to Americans that Yes indeed, the subsitition effect is real. It may be ugly, but it is a part of capitalism. Sometimes you do not need butlers. A lot of people used to have butlers or maids. Today we substitute them with microwave ovens, washing machines, fast food, computers, better vacuum cleaners and the Mr Clean Magic Eraser.

I thought my argument would be weak in this case, though. I thought that I would lose to the overwhelming sentiment that "america should never decrease quality of life- even in the name of free market efficiency! never!"

BUT I DONT HAVE TO HAVE THAT ARGUMENT!

In the next quote, we see that the creators of Shadow Government Statistics were UNABLE TO FIND A PROBLEM with this "substitution effect." They wanted to find a problem with it, as evidenced by the quote I just made above, but they were unable to.

I think they were unable to, because they make it clear that the bigger problem with the left wing's interpretation of inflation is their apparently unfair and irrational assumption that food and oil prices should be determined separately.

The big argument over at Shadow Government Statistics appears to be that "core inflation" is not a valid measure of inflation. They think that we NEED TO INCLUDE OIL AND FOOD, even though oil and food are especially volatile. Alan Greenspan determined that those prices are too volatile. Here is what the esteemed Shadow Government Statistics wants to say:

Yes it would make it easier.

We are trying to talk about the effect of AN INCREASE IN THE MONEY SUPPLY on current prices.

If Momar Kadafi shuts down all oil production and oil SUPPLY DECREASES,

SHOULD WE USE THIS INFORMATION TO DECREASE OUR MONEY SUPPLY?

EVEN THOUGH WE KNOW THAT IT IS ONLY TEMPORARY, AND A DEFLATIONARY CRISIS IS OBVIOUSLY AT WORK (see my chart in my previous post)!?!?!?!



I think we SHOULD remove oil and food from our calculation of inflation because a drought and a historically VERY LARGE revolution just took place throughout the middle east.

The effects of our monetary policy are more long term, and they will have more effect on the relatively tiny forces that affect small businesses like road constructors and the businesses that sells goods to road constructors.



Oil prices affected by mideast revolts and food prices affected by droughts.

Computer prices affected by low wages and low demand.

Government stimulus causes inflation by giving jobs to workers who would otherwise be unemployed. They have more money, they are willing to pay higher prices for computers, cars, televisions, toasters, clothing, lots of other goods besides oil and food and which are included in the Consumer Price Index, known as the CPI and graphed in my previous post.

 

1) It should not be up to the U.S. Bureau of Labor Statistics to do anything but calculate inflation based on actual prices - nor determine whether those prices are up or down based on their own subjective criteria.

That is not accurately determining inflation - that is interpreting inflation.

Are you actually saying that you do not see the gigantic benefit to sitting governments to posting inflation data that is actually less then the actual raw data?
It allows excess government spending and artificially low interest rates to continue FAR longer then they should and/or would in years previously due to the negative interpretation of the actual inflation rate by the government.
It is a decided conflict of interest - imo.

2) the price of transportation and food is apparently almost 30% of people's actual monthly expenses.

You wish to exclude the two single largest expenditures of people (outside of housing costs) from the official inflation rates just because they can fluctuate a lot?

No offense, but that - imo - is ridiculous.

http://www.fool.com/investing/gener...azy-lying-deceptive-consumer-price-index.aspx

and 3) as I pointed out before, the price of a barrel or oil is actually cheaper then it was before the 'Arab Spring'.

I guess your 'very large revolution' in the Middle East didn't hurt prices that much after all...

 

I have always said that if the US government calculated the CPI the same way as it did in 1980 you would get an inflation rate of about 10%. The government does all sorts of things to manipulate the numbers!

For example.....lets say you used to eat steak but in the past year you now have to eat hamburger, well the government will calculate that since hamburger has replaced steak then your grocery bill actually come down.

So I wonder if things got so bad that people needed to start eating dog food, will Bernacke look at that and say that your grocery bill has dropped dramatically so groceries are actually falling?

The entire CPI is s fraud......I dont know why anybody can be foolish enough to believe such nonsence!

 

So why doesn't Obama just lie to us about Americans dying in our wars and the entire existence of the recession at all? Why would they stop their lies at the random, arbitrary point that they have? I mean we are talking about a government that is exactly equal in corruption to the soviet union right?

The reason why those prices ought to be ignored IS NOT BECAUSE they do not affect American lives.

The reason why those prices are ignored IS BECAUSE those prices change as a result of random factors way more than they change AS A RESULT OF MONETARY POLICY.

We are trying to calculate the effect of an increase in the money supply on the price of all goods. We are not trying to calculate how many tears are pouring out of the eyes of Joe Smith as he struggles to pay his hamburger bill.

Well as we can see from our price chart on the previous page, you are correct, those prices didn't frickin inflate at all and there is no inflation to speak of.

That is what I have been trying to say. For some small time period, inflation was crazy high if you only include food and oil. Shortly after the effect of the drought and revolution ended, inflation went back down to super low levels.

We are in a DEFLATION crisis, as clearly and purely displayed in the chart on the previous page from businessinsiders.com. That means printing money is not just ok, it is the only solution.

Please see my previous post where I mention this substitution effect, and how it is not really very fair for me to support this abominable government lie

And then I went on to describe how it is obvious that "Shadow Government Statistics.com" was unable to find that this substitution-effect-based re-calculation of the CPI was really a big problem that resulted in a large change in the numbers, based on their own words. Please read that part of my last post.

 

The CPI is up 3.6% - I would hardly call that deflation.

You just included another person's post with your quote of my post so as to make it look like I typed it...when I did not...someone else did (I believe it was bacardi).

Please do not do that...though I respect that poster...I do not want anyone else's posts lumped in to look like I said them.

That is not fair to me or to the other poster.

 

THE WRONG INDEX.

Core inflation is 1.6% I would call that deflation. I would also call 3.6% too low since I'm a hyper-Keynesian but that doesn't matter.

Please see the chart I posted in the previous page and answer the questions that revolve around it.

Yeah sorry definitely an accident. I do my best, I don't think I can edit the post anymore

 

You asked about a half a dozen questions about it.

And I really do not care that much about it...no offense.


All I am saying - in essence - is that the CPI is 3.6%. That is the one that includes food and transportation (which are the 2'nd and 3'rd largest monthly expenses for most consumers).

AND that the way the government determines the CPI is partially subjective - which it is.

They do not take raw facts, correlate them and spit them out.

They take raw facts, interpret some of them and combine them with the other raw facts and THEN spit them out.

It is not, imo, a true and accurate interpretation of the present inflation in America.

 

I wish you would acknowledge that we are not trying to measure the negative effect on citizens.

We are trying to measure the effect that monetary policy, and only monetary policy, has on current prices. We should measure more peaceful and less erratic items to determine this effect. That means ignore prices like food and oil, because they change very much for other reasons.

We are not measuring the pain of americans, we are measuring the effect of monetary policy on prices.

I can see how you might see a potential for "subjectivity" and therefore bias in a direction that could easily be wrong.

But I really want you to consider this subjective statement, and imagine how someone might consider it to actually be a fully true statement, created in science and confirmed by looking at line graphs:

"If we want to see exactly how much prices have gone up as a result of 'increasing the money supply' by something like QE3, we want to ignore the effects of 'externalities' like civil wars and drought-related crop failures. That is, IF we want to only measure the effect of increasing the money supply with QE3."

It is only for measuring. Oil and food prices will go back down, which you actually described recently. Core Inflation for president!

 

I am only interested in unbiased facts...subjective opinions don't mean that much to me when it comes to economics.

I am not exactly sure what you are trying to prove.

You made some points and I corrected what I thought were possible inaccuracies with some of those points.

I am not looking for a philosophical debate.

I find they end up going no where and 99 times out of 100 it seems - both parties stay rigid in their beliefs and nothing gets done but a waste of time...
usually.

I realize there are many people that are into that on here.

I am just not one of them.