Inflation, deflation, schmlation

Ah, left out my main point.

I have the standard USD v. major currencies on my google home page. The nosedive of the USD in the last 24 months - gutwrenching. Forget the stock market. If one had only bought a bunch of euros, yens, AUD, CAD, swissfrancs back in March '09. Whoa. Many on these boards keep saying that it doesn't matter because the domestic buying power of the USD (leaving RE out of this) remains the same. I'm wondering if that's really true.

i agree, 10023, but as a long-term NYC resident i find food prices generally lower. but then again i've swapped out red apple and food emporium for trader joe's, targeted green-market shopping, and fruit carts. cereal i buy upstate, at less than half the price of NYC, same with cleaning items.

about two years (maybe three) ago the dollar simply tanked. i recall being in london when the pound was 2:1, and in Italy when the euro was 1.7:1 (don't quote me, it was a few years ago). i thought the dollar was doing better, has it tanked again? i recall the dollar strengthening conveniently in response to rising gas costs. i'm not following it as closely as you, clearly. but that could be part of why oil prices are skyrocketing again. which is not positive in the slightest for a fragile economy.

Interesting, thanks. My family has found that Amazon is a great place to by cleanex, Windex, etc. Not so much on food obviously, but 20+ years ago we were buying at lousy Associateds, arguably in a neighborhood that isn't as good as today, and now view WholeFoods, and Fairway (and Citarella) as better quality alternatives even if we've ignored higher prices.

I don't mean just nyc. Seems to me that even prices outside NYC and in Walmart have increased.

3 years ago, the dollar tanked but recovered during the big equity selloff - the theory was that people sold and had large USD cash holdings (strengthening the dollar). The commodity currencies (Aus, Cdn) are up a LOT. AUD almost doubling. Heckuva better retun than RE or stocks :)

Certainly from 2 years ago, with the world not seeming like it is coming to an end, many retailers have stopped being bargain basement. The "99c" stores are trying new strategies to keep their customers. But one only look at the performance of a wide group of retailers to see that things have improved.

Ah, and my bagel indicator is up, way, up.

Kinda remember buying 6 bagels for $1 17 years ago. An integral part of my $20/week grocery budget.

And used to be able to go into the Drake hotel and get swiss chocolates for free.

Wait, and cream cheese. Didn't Philly cream cheese used to be 99cents on a regular basis? It's now $4.29 (tub) at Fway. Is this the new normal? What's going on?

i'm sure they've increased to some extent, and to the extent that most people over the last ten years have not had income increases at all, obviously that's a concern. and the weather and crops, combined with increased demand, could lead to severe increases in costs, but that's not inflation, that's commodity scarcity. if you want to remain happy, don't do any significant research about the state of pollination practices in our country, or we could all be relocating to our commune and building beehives tomorrow.

commodities are raging. and they have been off and on the past few years. and if you have the stomach for forex some currencies are raging as well. but generally people have been able to keep most total food/household good costs constant, with some increasing and others decreasing. i've been getting about 11% in a couple of mixed bond funds, but i ditched those recently. muni funds have taken it in the shorts recently, i have to wonder if some are not now a decent deal for the retail investor. and maybe, although certainly not guaranteed, there will be some major opportunities in equities coming up.

Maybe a good way to compare is to see if my $20 student budget is possible today:

1) 6 bagels
2) Cream cheese (1x/2 weeks)
3) 1lb bag of pasta
4) 4 chicken legs or 1lb ground beef
5) dozen apples or pears
6) 2-3 bunches of broccoli or 1 head of cabbage
7) 10lb bag of rice monthly

Bees - thought I read recently that they found out why they were dropping dead.

I'm not an economist but is it particularly relevant to the calc. of inflation whether the reason for increased prices is commodity scarcity.

I have absolutely no idea what to invest in - I've had good ideas, but didn't pull the trigger. I would like inonada to research and get back to me on this :)

Stopped eating street prezels long ago, but aren't they still $1?

17 years ago? well, 10023, there hasn't been much in the way of wage increases per average household in recent years, but if you're talking a 17-year period there were significant gains.

of course it's important. and that's why rs chews the inside of his cheek raw in anger. extremely volatile, supply/demand commodities that can suffer from shortages due to political unrest/weather/pestilence are not a sign of wage or excess monetary supply inflation.

they have some ideas as to why bees are dropping dead (lack of diversity due to mass production leading to lack of ability to overcome adversity) but they have no idea how to stop the problem. and our food production is HUGELY dependent on our honeybees.

although, to be honest, they might be if people are parking excess cash in commodities, such as steel in certain places. warehousing is a different issue, but can obviously lead to commodity inflation. since most food items are fairly short-lived, there are only a limited number of areas where food warehousing can occur. unfortunately i think that includes rice and wheat, two of the more important staples.

what you're witnessing is monetary inflation. simple. nothing to do with china or pestilence or whatever bs.
a good proxy is world price for rice.the most important food. 2 others are oil and gold.
bees die of pesticides. not "lack of diversity" (complete bs).science education would be a minimum before utterring nonsense.

Yeah--my Goya cocktail olives have jumped from something like a buck-59 to more than $2. Horrors. Will have to start ratcheting back the evening 'tinis.

I've also noticed that many clothing lines have been steadily using shoddier workmanship and lesser-quality materials. Calvin, Donna, Tommy--I'm talkin' to YOU. Seems they want to keep prices level by selling an increasingly crappy product. Saks? Bloomingdales? Might as well just go to Dress Barn or Strawberry.

"I have absolutely no idea what to invest in - I've had good ideas, but didn't pull the trigger. I would like inonada to research and get back to me on this :)"

This recent equity rally has got me less equity-happy. I recently added to my holdings in MSFT and INTC: both are nice & unloved. Nothing big, just a low single-digit fraction of my holdings. But for the most part, scratching my head too as to whether / where to deploy some cash.

Nicercatch -- Pesticides may play a role, but it is much more complicated than that:

http://www.prisonplanet.com/new-clues-in-the-mass-death-of-bees.html

Read before spouting.

a bit off topic, but i use a rough cab-availabilty measure:
post lehman cabs would flock to a pedestrian if he picked his nose, there were so many running without fares--for much of last year they were less available, certainly at high-demand time---recently, ive found that cabs are generally more available than last year

scientific, huh?

they sure seem to continually cost more and more

nicercatch - China is exporting deflation to the US..cheap labor, low profit margins (plants built) and holding their currency down to compete against others..prevent upward prices being passed on

China is a huge user of commodities, so this is causing inflation in China..we dont really look at commodoties, and our CPI is dragged down by owner equiv rent component, (hence cpi ex food and energy)..This is being crushed by excess housing, cheap china imports, high UE, low capacity utlization...very little pressure on labor and finished goods costs

so net net..our policy's are prob causing the inflation in China and they will have to deal with it or make some adjustments

>http://www.prisonplanet.com/new-clues-in-the-mass-death-of-bees.html

Interesting advertising on that site: gold sales, ammunition sales, an ad to expose Barack Obama's real name, survival gear and supplies, evacuation info

The article was from Time (real "out there" publication), which links to another article from Time reviewing a book on the mass death of bees. (You really are obsessed with advertising, you know.) But you can blame it solely on pesticides if that makes you feel better, even though pesticides have been around for decades and were used in massive quantities in the past but the mass death phenomenon is a recent thing.

nothing to do with inflation, but since genetic diversity came up, i'd like to recommend the pbs documentary "botany of desire" which is not at all what is sounds like. michael pollan's book might not be everyone's bag around here, but the film is very watchable and pretty cool.

UD - I'm thankful we are able to effect policies that cause inflation in China. It's a perfectly acceptable response to the currency manipulation that undervalues their exports. Eventually a widget tycoon will be faced with a real decision to manufacture in China or Detroit. I mean, we can always hope.

ME: nothing wrong with prisonplanet. I would not however read Time. I don't like cartoons. But seriously a cause can be removed by 2, 3 or more layers (chemical product, DNA mutation, chimeric clone, cancer,death: decades later) and still be the cuprit. Corporations PR confusing the issue to evade responsability does not change anything.
UD: i came back yesterday from...china (hence the short temper).I we thought we had a RE bubble in the US,(still raging in Europe),wait for this one to pop. I did some speculating in the Fujian province (all cash) and just got out.Well China may be exporting cheap labor but not deflation in the real meaning of the term. Just to peg the USD/RMB they printed gigantic amounts of paper, finding its way in RE.Those who cannot buy RE (expensive), buy gold and silver. Inflation is already there in China.
Cost push inflation thru commodities is coming to bite us.This is not at all a sign of economic recovery.
CCI index, all time high (CRB a fraud). PPI up, CPI a fraud. Who knows what the real numbers are.
For years now in Argentina they pretend inflation is 5% when in reality it is above 20%.Ben Shalom says it's ok , no inflation: all abovementioned examples scream the opposite
That may explain the cognitive dissonance that we all feel when we go shopping. Deflation? don't think so.
Finally I think that's the good reason to buy real estate in NYC, not because the market is healthy, but because inflation is on its way (my analysis of course)

>ME: nothing wrong with prisonplanet.

Or their advertisers, right? Gold sales, ammunition sales, an ad to expose Barack Obama's real name, survival gear and supplies, evacuation info

I think the bee die-off was found to come from a one-two punch from one particular fungus and one particular virus. Whether a particular underlying condition made the bees particularly vulnerable to that particular combination, or it's a new/evolved virus, is another question.

Hunter S. Burg's strange obsession with advertising continues.

http://mises.org/books/inflationinfrance.pdf

I though this was a very interesting read. for a nice evening. brilliantly written by a Cornell guy. events from 200 years ago. notice the price of eggs, milk... Substitute "issue" with QE and you have it. I didn't notice the bees except on the seal of the king (virus must have killed em). cost push from monetary inflation. same old, same old.

I have noticed Fiat inflation. You used to be able to get a good "pre-owned" one for around $5,000. Now you can't find one under $6 k.

Will everyone Fking out themselves? FLMAOzzzzz Fking troll.

nicercatch - yea the re bubble in china i hear is quite scary...what pops it though? And does the govt let it get destroyed or are they helpless to stop it when it does happen. Im out of the loop lately on my macro, focusing all my attention on new Manhattan charting tools and more integrity issues to engineer for our next phase of products.

Sucks to be out of the loop..those comments above were my general feelings on china from months ago..not sure if its dated already

rising rates? increased bank reserves? w67th? his tranny bf?

gotta go now (kiss to u w67).
UD. I appreciate your work.it's very valuable. I always wanted to mention something that I must not be the only one doing. and that is "international waves" (I don't know of a term for that).
In a nutshell: the RE cycle seems to "rotate", start in CA, midwest then NY, but doesn't stop there, continues to London 1 year later,and Paris 2 years later. I used that to load up in Paris RE in the late 90's assuming NY had already bottomed. It worked beautifully. 2006-7 US peak,So in 2007-8 I sold some Paris properties (just a few)and it started to dip as expected. Then they reflated the whole thing, and I missed out because I sold them too early.
One of my landlord friend says: NY is one year behind the US.
I have never read anything about these things. I use it empirically.
Any more data?

Do you mean Paris, Texas or Paris, Maine? I definitely off-loaded my Texas property.

I've certainly bookmarked prisonplanet.com.

I wonder if they sell email addresses. That would be snazzy (even better than @reagan.com which chubby michael sells for $39 a year).

Back to the OP point on currencies:

"The nosedive of the USD in the last 24 months - gutwrenching. Forget the stock market. If one had only bought a bunch of euros, yens, AUD, CAD, swissfrancs back in March '09. Whoa. Many on these boards keep saying that it doesn't matter because the domestic buying power of the USD (leaving RE out of this) remains the same. I'm wondering if that's really true."

10023: The point is well taken, and I missed it too, but it hasn't been all that extreme after everything nets out. I look at the US Dollar Index (USDX), which is pretty good with the caveat that it doesn't include AUD and is heavily-weighted to the EUR. Anyway, in the last 2 years this $index is down about 8%, and 12.5% from the market nadir on Mar-09. Significant moves, yes, but not so large that I'm beating myself up about it.

Separately, anyone looked at muni's with corporate obligors? Muni's have sold off indiscriminately since October because of state/local budget concerns, among other things. The idea here is if there's a creditworthy corporation that guarantees the bond, you can earn good tax-free yields without taking on the fiscal budget risk.