cpi shows inflation over 9% using 1980 methodology

Let's talk some more facts. The graph you chose seems to have strangely ended at the end of 2007. Here's the fresh processed milk PPI in its full glory:

http://future.aae.wisc.edu/data/monthly_values/by_area/851?area=US&grid=true&tab=prices

Note how price is down 2.4% over the 3 years since. Also note how it is up 2x since 1986, just like CPI. I believe that's the point at which you claim CPI started lying.

http://www.tutor2u.net/

hif'nglarious

the old charts from cornell or wherever only worked for powdered milk so RS has moved on.

Except they don't even work for the item of his choosing: liquid processed milk.

Powdered milk is even lower:

http://future.aae.wisc.edu/data/monthly_values/by_area/865?area=US&grid=true&tab=prices

>hif'nglarious

According to Google, that word has only ever been used twice before:
http://www.google.com/search?q=%3Ehif%27nglarious

We have a brilliant system in the U.S. of milk and produce distribution. What year was the northeast blackout that the Canadians caused? 2003? the very next day - fresh milk, eggs, and other produce in the stores.

yeah, but it's the serpentine method of argument. run left, head right, hope nobody hones in on your exact position. hope nobody recalls that you ran charts that "showed" massive inflation last year.

how often does google say that "avertising" has been used?

Well, for sure, some people are good at avoiding responsibility.

Except it wasn't even last year, it was 2007.

>how often does google say that "avertising" has been used?

http://www.google.com/search?q=%2Bavertising: About 685,000 results (0.31 seconds)

well, he had some charts from SOMEwhere, nada. you certainly can't expect me to defend RS's source quality.

2,787 open houses FLMAOz

Did you mean FLAMEOz?

http://www.google.com/search?q=FLMAOz

I'm not suggesting that you defend it, just that you shouldn't give him such high ability in constructing vacuous arguments.

w67th, really, not enough. they're really trying to manage expectations.

nada, i can't recall exactly how RS took one small data point that was not consistent with the rest of the data for dairy, whether it was just for one quarter (which is what i suspect), but it was ridiculously slanted and obviously chosen despite the fact that RS knew it was an aberration. such is life as we know it here on SE.

Mooo

Sadly, I think he uses his misconstrued facts as a basis for his decisions, not just for yutz on SE.

actually, nada, i give him moderate ability in constructing vacuous arguments. the vacuous he has down pat. the ability to hide it is non-existent.

Yutz? http://www.youtube.com/watch?v=1q7mjoxHzm4

Riversider is a douche of the highest magnitude.

Me thinkz when mac and cheese becomes too expensive I'll tone down the $400/month iPhone bill. Or maybe I'll get those rabbit ear things for my 37 inch samsung led tv with 3d glasses and go basic cable on your azz. FLMAOzzzzz. Cream cheese! Like it's a Fking staple. Substitute with butta!!!!

http://future.aae.wisc.edu/data/annual_values/by_area/303?tab=prices

US clothing companies are warning of a jolt in consumer prices in the latter half of this year, affecting everything from socks to evening dresses, as the soaring cost of cotton ends a prolonged spell of price deflation in the sector.

http://www.ft.com/cms/s/0/b2664d96-3799-11e0-b91a-00144feabdc0.html#axzz1DMDd4PgR

HSB -- Homogenious.

http://www.nytimes.com/2011/02/15/business/15prices.html?ref=business

Whirlpool says consumers can expect to pay 8 to 10 percent more for its products starting April 1. Apparel companies like Polo Ralph Lauren and Brooks Brothers said they would raise prices this year. Hanes Brands, which has already done so, said prices on cotton-heavy products would rise again at the end of summer. If cotton costs stay high, Hanes products could have a cumulative 30 percent increase.

http://www.cepr.net/index.php/blogs/beat-the-press/commodity-prices-are-soaring-back-to-2007-levels?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+beat_the_press+%28Beat+the+Press%29

how quickly we forget.

however, if this is all indeed about to happen, can't be good for housing prices. less disposable income, less savings, less available monthly for payments.

another pasty!

http://macroblog.typepad.com/macroblog/2011/02/inflation-confusion.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2FRUQt+%28macroblog%29

Nothing like an economic collapse to kill inflation. The credit-meltdown had a huge negative pricing effect. We're now resuming the trajectory we were previously on.

So why not buy a brand new energy efficient home?

KB Home, one of the nation's largest builders, announced Monday its plans to have an EPG (Energy Performance Guide) on each of its U.S. homes by the end of this month, and other production builders plan to follow.

"This is a game changer... Once it's out there, everyone will do it," says Jeffrey Mezger, the company' CEO. He says consumers will now understand that KB's homes, all of which meet Energy Star standards, will "perform better than resales down the street."

The push for an MPG-like label comes as U.S. home builders seek a competitive edge against low-price foreclosures, and as the U.S. government develops an efficiency score for existing homes.

http://content.usatoday.com/communities/greenhouse/post/2011/02/kb-builders-mpg-like-home-labels/1

What you IGNORE in those most recent articles is that they say JUST what Inonada has said - that for YEARS the prices of clothes and appliances had been FALLING. not just in relative terms - absolutely. So you ignored the last decade plus of clothing costs going down and cherry pick this moment. Further, the article states that commodities are a small minority of input costs AND THAT all the items discussed collectively make up only 25% of a consumers basket. And it says inflation overall should rise from 1.5% to 2.5% - well below the 100 tear average of 3.1%, and much lower than it was five years ago (when no one claimed hyperinflation.)

Jason, You looking backwards or forwards?

Jason, how do you pick the words for all caps?

"Riversider
1 day ago
ignore this person
report abuse

http://future.aae.wisc.edu/data/annual_values/by_area/303?tab=prices"

I'm not sure what you're trying to demonstrate here. It shows retail cheddar cheese going from 3.542 in 1991 to 4.710 in 2000: a 33% increase overall, or 1.5% annually. Below the 62% rise in CPI, or 2.5% annually.

Were you conceding the point? Or were you trying to say "here's a graph that goes up, therefore we have runaway inflation" without understanding how to calculate the numbers? Or had it just been a while since you'd posted a link?

No, perhaps I should not have allowed you to cheddar up the discussion. In my house-hold cheddar cheese is not a purchased item. Milk products are going up. And we're talking today, not 1991

OK, why don't you put on a CPI trade? If you don't trust CPI, I'm happy to be your counterparty for a milk-only trade. Let's make the trade for price 2 years from now; I'll sell you as much as you want at today's prices plus 4%.

I don't like milk, but I have noticed the price of Parmesan cheese rising, along with that of cream cheese. If you can help me hedge my exposure to these two products and that of yogurt , there may be a discussion to be had.

Done. How much size?

http://finance.yahoo.com/news/Companies-Raise-Prices-as-nytimes-4051730310.html?x=0&.v=2

"Cotton prices are near their highest level in more than a decade, after adjusting for inflation, and leather and polyester costs are jumping as well. Copper recently hit its highest level in about 40 years, and iron ore, used for steel, is fetching extremely high prices. Prices for corn, sugar, wheat, beef, pork and coffee are soaring. Labor overseas is becoming more expensive, meanwhile, and so are the utility bills to keep a factory running.

%u201CThere are cost pressures from virtually everywhere,%u201D said Wesley R. Card, the chief executive of the Jones Group, whose brands include Nine West and Anne Klein. After trying to keep retail prices flat or even lower during the recession, Jones says prices for its brands will climb 15 to 20 percent by autumn."

To say there's no inflation is like saying this nation runs a yearly surplus.
Some of you are beyond blind.

How can so many people be so dumb?

"The bond market is NOT PREDICTING RUNAWAY INFLATION, dummy!"

You can't use the bond market as a measure of inflation anymore.
As of last month, the FED is currently the largest holder of US treasury. It took about 16 months to surprise what China and Japan have been doing for decades.

READ THIS AGAIN IF YOU STILL DON'T GET IT...

"It took about 16 months to surprise what China and Japan have been doing for decades."

jason:What you IGNORE in those most recent articles is that they say JUST what Inonada has said - that for YEARS the prices of clothes and appliances had been FALLING. not just in relative terms - absolutely.

I have a question that I do not know the answer to. One of the reasons the market and our economy is improving is because of the rising middle class in emerging markets -- a boon to US corporations. New participants in that middle class have not really been exposed to inflation in their new status. So that washing machine, though up only slightly, might just be out of range when you consider the rise in food prices. A pull back in emerging markets will affect us here, no? Not to mention the overwhelming numbers of the poor who cannot tolerate any rise in food prices, may revolt out of absolute necessity. Therefore political unrest which puts pressure on oil, etc. So whether or not the US has average inflation prices, general inflation can affect the US economy in our new world order, no?

you have to consider why all these companies are breathlessly announcing that they can no longer hold down prices. you also have to consider that for anyone in the consumer products business, Walmart is a huge customer and Walmart has a long standing reputation for telling producers to eat price increases.

its going to be months before there is anything approaching reliable information as to what is actually happening.

Buy your fruit loops now or be priced out forever!

Oh no, cream cheese!

Hedontics. When I was a young man, we only had ky jelly and trojans. Now we got flavored astrolube, 27 different mint, bumpy with a beads condoms! Progress!!!!!!!

Flmaozzzz. Riversiderrrrrrrrrrrrrrrr! They got chives in the Fking creeamcheeese. !!!! Omgf. Chives! Tool

Obtw, happy post v day. Hope you'll got some :)

A few days bf v day I walked by a Victorias secret (from VS to apple store, not progress), old/young, Fat/ skinny, pretty/ugly, lots of ladies getting their slut on :)

What the dis-inflationistas haven't answered is the following.
If commodity prices are going up, as I understand the argument, producers will be unable to pass along the price increase , hence no inflation. But this is flawed in the long term for the following reason.

If the item becomes unprofitable at the current production level then the market responds by producing less of it and passing along the increase to a smaller base of customers, so the price does go up, but less people get access to the goods or service.

or profits go down. duh. profits have risen tremendously through increased productivity. of course companies would like to pass on increased costs, and keep all the gains from productivity and cheap international labor, but there is only so much demand elasticity for fruit of the loom underwear. you really think they need to give up volume to make a profit?

or marketing expense goes down.

or shipping expense goes down because of consolidation.

or labor cost goes down even further.

or occupancy costs go down.

RS, don't worry about those complicated questions. If you know prices on Parmesan cheese, cream cheese, and yogurt are going up, and some fool shows up and offers you a trade at CPI, why not take it? You know better, after all, don't you?

It's akin to Egyptians arguing about disappearing relatives, 'inflation' by USA standards is like crying cause you gotta go from 30% tax bracket to 35% Bc you made $10mm in bonus this year.

Feb. 15 (Bloomberg) -- Federal Reserve Bank of Richmond
President Jeffrey Lacker said U.S. inflation may accelerate in
the second half of 2011 as firms seek to recoup higher
commodities and health-care costs.

"It's akin to Egyptians arguing about disappearing relatives, 'inflation' by USA standards is like crying cause you gotta go from 30% tax bracket to 35% Bc you made $10mm in bonus this year"

yeah but don't they have all that egyptian cotton....that's erigold.

yes, yes, yes, RS, quote the dissenting Fed voices. he also said we shouldn't try to tackle unemployment too aggressively for fear of stoking inflation.

would be horrible to have all those people working and earning an income. might increase prices a bit.

http://www.youtube.com/watch?v=uBaHr8WN2VI&feature=player_detailpage

how about real life.

Feb. 15 (StreetEasyNews) -- Long Time Poster columbiacounty
said that Riversider may finally stop posting incessant and misleading
garbage in the second half of 2011 as Riversider seeks to improve his
community standing.

On the other hand, he may not.

would be horrible to have all those people working and earning an income. might increase prices a bit

They tried that in the 1970's. The Philips curve doesn't work.

oh enough with your stupid jargon. they can use any excuse they want for any course of action they want.

economists have been wrong about almost everything. philips curve this, efficient market that. are you saying that today's economy, whether viewed from a world-wide perspective or just from the US, is comparable to that of the 70's? all that free trade you love so much happened in the intervening years.

which countries are doing better? what kind of regulatory framework and safety nets did they have? quit looking at what has failed here, and look around at what succeeds elsewhere.

but likely you don't care about the high level of unemployment, as it doesn't adversely affect the price of cream cheese.

Thatz what I'm talking about, erigold bitches about gap jeans going fRom $4 to $6, but thinks he lives in a $1mm PH manse that is guaranteed to go up 20%/yr. Fking clueless fktards.and that riversider is beycthhhhhhing about cream cheese prices when he missed the greatest selling opp for his bubble coop in 2007. So fk him and his mama.

Goodday, ar, cc t10 :)

One guarantee, get a job, pay the man.... Get old and die. Fk off Ericho/ river, you Fking re pumping fox tv watching plain loving intelligence hating midwesterner/ retards. Go live in Alabama.

W67 => $500 psf nyc re. One stmt, one agenda, one reality.

oh enough with your stupid jargon. they can use any excuse they want for any course of action they want.

Well then, let's print out way to prosperity.

you're so monochromatic. the printing's just about over.

bitch, bitch, bitch. RS isn't getting what RS wants, which is high manhattan real estate prices, low cream cheese prices, high interest rates so saving can be more lucrative but nearly risk free.

who gives a rat's ass about the people without jobs? they don't figure highly in RS's self-serving agenda. every economic tactic/theory etc. that doesn't promote RS's three goals can be discredited by RS, never mind that the ones left are all highly contradictory.

flamozzzzzzzz..... ding him aboutready.

I believe Riversider is a member of the "let's bitch our way to prosperity" movement.

FLMAOz

There is nothing more sad then watching folks like AR & W67thstreet attempt to downplay the inflationary pressure that's being built. AR is as dumb as they come, i don't blame her. w67thstreet on the other hand needs a pencil up his ....

:)

http://www.finviz.com/futures_performance.ashx?v=16

No inflation right.
And of course, all the major retailers are already announcing higher prices of their goods in the coming quarters. They rather eat 'profits' then pass the cost to their customers. <---Did AR really write that?
Again, as dumb as they come.

And w67thstreet...HOW BOUT THEM COPPER!!!

hey dummy.

why do you think they are announcing these increases now?

http://www.finviz.com/futures_charts.ashx?t=HG&p=w1

Already 10% ABOVE ALL TIME HIGHS.
This is 'deflationary' right?

Crackhead.

bitch, bitch, bitch
you forgot the part about living in rent stabilized housing intended for the lower and middle and class income brackets.

the 'ho calling me dumb? why am i not more crestfallen?

hey 'ho, take a look at that article i posted on inflation from the atlanta fed. somebody either failed econ or didn't take it.

AR,
2 years ago you said we are heading into a deflationary collapse.
The economy will go into the tubes.
Unemployment will be high forever.
Green shoot is a lie.
The stock market will continue to collapse.

WRONG WRONG WRONG WRONG!!

You also said that INFLATION CANNOT HAPPEN WITHOUT WAGE INCREASE.

WRONG AGAIN!

You also said you won't ever post again on this site.

WRONG!

Don't make me dig it up....

You are a fraud.

Tell us how great you are.
Tell us how smart you are.

Lie Lie Lie..
Wrong wrong wrong..

:)

why write in one post what you can scream irrationally in four or five?

wrong!!!!!!!!!!!

Your are so so right. I'm installing a 15K btu air conditioner/heater in the boat... I gotta admit it's got a ton of copper in it. $600 to install, new intake y valve ($30), new thru hull (don't want to mix thru hulls can flood the boat ($50), 8 gauge electric wire ($100), circuit breaker for inverter $50, list price for the west marine air conditioner ($3,500).... of course that's retail... port supply card, year end sale.... $2K... and btw, the installer said in 2007 he used to charge $2K to install these units.... but of course he's outta of job and doing side jobs to make ends meet.

-w67 scratching his full head of hair- if this is ericotton/riversider's inflation... I say "BRING IT BEYTCHEEEEES!."
BTW, my wife got a promotion and increase in base (20%)... so bring it fking goldbugs.

Maybe in the next ten years when my air conditioner craps out, the unit may cost more... or maybe I'll just fking buy a $10MM yacht for $300K with a working air conditioner? hey Howz about I buy your PH unit for firewood... I hear wood is getting expensive... nyc re, not so much.

RS, i think you forgot your tax abatement.

you're getting all heated up, there, RS. lower and middle and class income brackets? and no, my complex is rent stabilized now because of the J-51 program. the rent stabilization meant for lower and middle class income brackets was changed by Albany a few years ago. but i understand it's an emotional issue for you, you simply can't think straight it disturbs you so much.

2007 we had huge commodity price increases. and then they largely went away. we've had some commodities spike in the last few years. what have they done to end prices generally?

commodities can turn on a dime. droughts, pesky people in emerging countries demanding their fair share of artery clogging corn-fed beef, those things can indeed raise prices. but that is not in and of itself inflation. sadly the 'ho doesn't get it. he thinks a stock market that reflects huge interjections of gov't cash, a weak real estate market, unstable commodity prices and a 9% unemployment rate equal good times indeed.

commodities can turn on a dime

these are good points. Agricultural commodities can rise due to bad harvests.
that said we're in a global economy and the United States is not the only game in town anymore. We compete for food globally with people from India & China armed with an ever increasing pocket book. Add to that emerging economies that have a greater need for Potash, Oil, Metals, etc and one gets a clear picture of the cost of goods.

Now add to that equation that the United States imports many goods from those very same countries which are now experiencing inflation which shows up in higher labor costs, so that I-POD you are so fond of is apt to cost a little bit more.

The United States has been lucky in the past. We benefited from American companies' ability to outsource labor to lower cost countries. But now those workers in Asia are expecting higher wages, because their central banks have to keep their currencies low in relation to the dollar, they imported inflation.

Well.. American CPI is no longer weighted down by cheap imports. It's no longer weighted down by an appreciating dollar. It's no longer weighted down by a Fed targeting zero inflation.

Bottom line , expect more inflation than we've had in the past. It may not register tomorrow, it may not register next week, but it's coming. An that company selling you goods? In the long run , they'd rather sell less of it at a profit, than more of it at a loss, especially if demand is inelastic. Sorry you don't understand Philips curves, but if the answers were easy, we'd never experience recessions or depressions.

well...its already established that you've never been in business. no company wants to sell less. period. end of story.

to quote Gonzalo Lira:

"Because of this very foolish fallacy, many economists and interested observers think that real assets—commodities, land, buildings, factories & machinery—all rise in price equally during an inflationary spell, whereas financial assets—bonds, stocks—uniformly fall.

But this is wrong: It is at best sloppy thinking, at worst dangerously stupid.

Inflation—and hyperinflation—affects two things immediately: Near-term necessities (such as food and fuel), and credit.

The effects on basic necessities is obvious—but the effects on credit are more subtle and complex.

How does inflation and hyperinflation affect credit? By driving up interest rates—obviously. But what is the effects of rising interest rates in an inflationary/hyperinflationary environment?

Real estate price collapse. "

Rest of story regarding collapsing house values in high inflationary environments here:
(http://gonzalolira.blogspot.com/2011/02/inflation-hyperinflation-and-real.html#more)

Cry wolf for long enough, and you eventually at least see a coyote a huskey

"How does inflation and hyperinflation affect credit? By driving up interest rates—obviously. But what is the effects of rising interest rates in an inflationary/hyperinflationary environment?
Real estate price collapse. "

I agree, but interest rates aren't going anywhere anytime soon. The created the perfect environment (low rates and inflation) for real estate to recover. What if we get QE3? Or QE4 for the next 2-3 years? Are you willing to roll the dice and sit out in potentially the greatest inflationary period of our generation here in the USA?

Most of you bears don't believe in precious metal and obviously hates real estate, where else are you going to put your cash? Stocks? Sure....after almost 100% move the past 2 years.

Calling an expectation of higher inflation one of hyperinflation is just building a strawman.

We ARE SEEING an increase in TREASURY YIELDS(10 YEAR TIPS & 10 YEAR NORMAL) above and beoyond CPI. The answer is that the market is pricing in an increase in inflation expectations not expecteed to be reflected in the CPI.

10 Year CMT is up to 3.61 from 3.297 at the start of the year
10 YEAR CMT(TIP)is also up to 1.329 from 90.971 at the start of the year.

Bottom line the market is pricing in inflation above an beyond what's captured in the CPI! And my
prediction is we'll see this trend continue in the second half of the year when higher prices become
more obvious to all.

so....

we are going to have low interest rates and raging inflation? with a drop in the stock market and a huge increase in real estate values?

aren't treasury yields back up to where they were last spring? although RS was claiming we were entering an inflationary period back then as well.

Oh geez, RS. You really seem to have no ability to analyze.

10-year treasuries are at 3.61%; 10-year TIPS are at 1.33%. The market is therefore pricing CPI at 2.28% tops. In actuality, it's a little bit lower since the holders of inflation risk want to get paid a little for holding that asymmetric risk.

At the start of the year, the yields wer 3.36% and 1.05%. So, the spread was at 2.21%. Yeah, a huge jump...

Ino,
Since tips holder are inflation protected, why do you suppose they are seeking a higher nominal yield today(1.33 vs 0.971). How do you explain the additional 40 bps premium that a buyer who is protected against CPI risk is demanding?

It's hilarious watching you folks downplay inflation and this recovery while the stock market and all the major commodities been 'SOARING' the past 20+ months.

Just insanity.

http://www.finviz.com/futures_performance.ashx?v=16

In insane, ericho, that you think that asset prices and commidity prices = 100% of inflation calcutions. Meanwhile, the flat screen 1080p 42 inch TV I bought for my bedroom this summer for $899 is priced at $267 now at PC Richards.

...And my rent is the same as it was in 2002.

Meanwhile, the flat screen 1080p 42 inch TV I bought for my bedroom this summer for $899 is priced at $267 now at PC Richards.

Communication 2 is 3.4% of CPI-U (which includes Information and information processing(i.e. Telephone services,Information technology, hardware and services(i.e Personal computers and peripheral equipment))
Can we pick a more irrelevant component of the CPI.

And of course, there is a flaw in the High Def analogy, as the manufacturers fairly quickly do not make or allow you to buy that model from two years ago that has 480 lines of resolutin, So your cash outlay stays more constant than Hedonics would suggest.

"And of course, there is a flaw in the High Def analogy, as the manufacturers fairly quickly do not make or allow you to buy that model from two years ago that has 480 lines of resolutin, So your cash outlay stays more constant than Hedonics would suggest."

RS, in addition hedging your cream cheese exposure, I will offer you another service. I will sell you all my old electronics at whatever the hedonically adjusted price would imply. Are you willing to pay $90 for a 1996 Thinkpad?

"Since tips holder are inflation protected, why do you suppose they are seeking a higher nominal yield today(1.33 vs 0.971). How do you explain the additional 40 bps premium that a buyer who is protected against CPI risk is demanding?"

Oh jeez, I thought you might go down this route, but then I said to myself "nah, this guy claims to know something about bonds, he can't be that ignorant". Your argument here seems to be that real yields (i.e., nominal yields minus CPI) are a reflection of the extent to which people believe CPI is understating true inflation. You seem ignorant of the idea that there is a real cost of capital: if you want to borrow my money for 30 years, I'll lend it to you, but I want to be able to purchase more stuff with the amount of money you pay back than I can purchase with it today. The magnitude of this real cost of capital has been the source of the majority of the volatility in bond prices, not inflation expectations, over the past decades.

Riddle me this. In July 2007, the yield on 5-year TIPS was 2.7%; in early November 2010, it was -0.5%. Should we take that to mean that the market went from thinking CPI was understating true inflation by 2.7% in 2007 to overstating by 0.5% in 2010? I don't remember you pointing at the -0.5% real yield on 5-year TIPS as evidence of CPI over-stating inflation by 0.5%.

Most people log on to the internet, send emails, use excel, word and maybe look at a video. For those people the IBM Think-pad made a few years ago works just as well. And I would argue that the Think-Pad is a prime example of reverse hedonism as the Lenovo key-pad works less well than the over-engineered one made by IBM. The Chinese made a decision to de-content the Think-pad. The quality is just not what it was.

And if you only watch FIOS OR TimeWarner, then 720 HIGH DEF set works as well as the more expensive one.

"Most people log on to the internet, send emails, use excel, word and maybe look at a video. For those people the IBM Think-pad made a few years ago works just as well. And I would argue that the Think-Pad is a prime example of reverse hedonism as the Lenovo key-pad works less well than the over-engineered one made by IBM. The Chinese made a decision to de-content the Think-pad. The quality is just not what it was."

Man, you like to blabber. Do you want the Thinkpad for $90 or not?

will you throw in a long ethernet cable?

If I needed a computer, I would certainly consider it, but it would need to be a 2005 model.
You can take an argument too far, I wouldn't by your Altair 8800 computer for any price(strike that... that has collectors value)