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Thread: the fed has decided to stop lying to us about inflation

  1. #1
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    Default the fed has decided to stop lying to us about inflation

    admits that 'transitory inflation' was a pipe dream

    what now?
    Simpler is better, except when complicated looks really cool.

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    Default Re: the fed has decided to stop lying to us about inflation

    ice cream

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    Default Re: the fed has decided to stop lying to us about inflation

    Lots of 'unwinding' to do.

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    Default Re: the fed has decided to stop lying to us about inflation

    Quote Originally Posted by Paul Pless View Post
    admits that 'transitory inflation' was a pipe dream

    what now?
    You should quit lying about the Fed lying. There's a difference between doing economic forecasting, and being off-target... and lying.

    For those who are interested in a primer on the difference between 'transitory' and 'persistent' --

    https://realinvestmentadvice.com/wha...20vague%20term.

    And for a straight-ahead news story on the latest developments --

    https://www.cnn.com/2021/05/20/inves...rve/index.html



    Prediction is very difficult, especially if it's about the future. Niels Bohr
    Last edited by David G; 10-13-2021 at 08:14 PM.

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    Default Re: the fed has decided to stop lying to us about inflation

    Krugman begs to differ, fwiw, though I wouls agree about the "unwinding", there is an unfathomable amount of $$$ wending its wat through the system, and we are quite possibly looking at more in the near future.
    Steve Martinsen

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    Default Re: the fed has decided to stop lying to us about inflation

    Quote Originally Posted by SMARTINSEN View Post
    Krugman begs to differ, fwiw, though I wouls agree about the "unwinding", there is an unfathomable amount of $$$ wending its wat through the system, and we are quite possibly looking at more in the near future.
    How so... what's his take?

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    Default Re: the fed has decided to stop lying to us about inflation

    Steve Martinsen

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    Default Re: the fed has decided to stop lying to us about inflation

    twenny is the new five spot.

    c-note is the new twenny.

    hope you got lots of c-notes and twennies.

  9. #9
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    Default Re: the fed has decided to stop lying to us about inflation

    One cannot lie when attempting to predict the future, although being wrong is very easy.
    "For a successful technology, reality must take precedence over public relations,
    for nature cannot be fooled."

    Richard Feynman

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    Default Re: the fed has decided to stop lying to us about inflation

    Take 100 economists and get a new prediction every week. Somewhere along the line one of them will be correct at least one time.

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    Default Re: the fed has decided to stop lying to us about inflation

    Didn't the fed change the key indicators on CPI to make them functionally meaningless a couple decades ago?

    The reality is that cheap money, leverage, and derivatives in a globalized economy is in the process of coming to a head and anybody even vaguely near the seat of power has known this for a long time. Hot potato!

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    Default Re: the fed has decided to stop lying to us about inflation

    Quote Originally Posted by offbelayknife View Post
    Didn't the fed change the key indicators on CPI to make them functionally meaningless a couple decades ago?

    The reality is that cheap money, leverage, and derivatives in a globalized economy is in the process of coming to a head and anybody even vaguely near the seat of power has known this for a long time. Hot potato!
    Different issue than miscalculating whether a period of inflation would turn out to be short or long. And a WAY different issue, to me, than accusing the Fed of lying about it. Sowing unwarranted mistrust in our institutions - as opposed to critiquing their actions fairly and accurately - is precisely what the authoritarian, anti-democratic, proto-demagogues WANT done. Sow confusion, chaos, and mistrust... and sell 'solutions'.

    You could start a different thread, but economics topics, esp. boring in, tends to turn quickly to gobbleydegook.

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    Default Re: the fed has decided to stop lying to us about inflation

    Quote Originally Posted by offbelayknife View Post
    Didn't the fed change the key indicators on CPI to make them functionally meaningless a couple decades ago?
    no

    the cpi, and other key inflation indices are defined and calculated by the bureau of labor statistics, not the fed

    there have been a number of changes to how the cpi is calculated over the years, and the biggest change was a change to it's baseline circa 1980 or so, when the cpi really came into prominence as an analytical data point, that baseline has been nudged a few times since. . .

    here's the important thing to remember with regards to how the fed and the treasury use the cpi, at least how they have used it for the last forty years; it's a short term analytical tool

    while the fed has a goal of long term stabile inflation rate of 2%, they use changes in the relative short term, qtr to qtr and year to year to analyze and prompt their policy changes

    also worth noting as far as fed policy goes, we are really in a wild new era post greenspan, because the financial and housing markets are no longer reflective of economic realities, there has never been a time when they were so disconnected - the brave new world of monetary policy. . .
    Simpler is better, except when complicated looks really cool.

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    Default Re: the fed has decided to stop lying to us about inflation

    What will happen? Things will get more expensive, and some folks will complain and others will brag about it. When things get less expensive, it is called a depression. Some folks complain about it, others think it is a good idea.

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    Default Re: the fed has decided to stop lying to us about inflation

    Things will continue to get even more expensive,

    and the ATFW will laugh as that money flows from the ever diminishing funds of increasingly overstressed workers to their ever more overflowing coffers.
    fxtd

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    Default Re: the fed has decided to stop lying to us about inflation

    My college economics prof said, "If you lined up all the world's economists end to end, they would never reach a point."

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    Default Re: the fed has decided to stop lying to us about inflation

    Quote Originally Posted by skuthorp View Post
    Take 100 economists and get a new prediction every week. Somewhere along the line one of them will be correct at least one time.
    Quote Originally Posted by The Ranger View Post
    My college economics prof said, "If you lined up all the world's economists end to end, they would never reach a point."
    Sophistry often starts with a small grain of truth.

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    Default Re: the fed has decided to stop lying to us about inflation

    CPI since 2001:

    inflation.jpg

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    Default Re: the fed has decided to stop lying to us about inflation

    Longer term. I once had a 13.5% mortgage (not for long, but still . . .)

    "For a successful technology, reality must take precedence over public relations,
    for nature cannot be fooled."

    Richard Feynman

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    Default Re: the fed has decided to stop lying to us about inflation

    that graph keith posted illustrates my (somewhat rhetorically made) point about the fed lying to us
    most* fed and treasury economists that act as spokespersons for their organizations during the entirety of the pandemic, both trump and biden administrations,
    have repeatedly indicated that the rises in prices are transitory and the further implication has been that the prices would resume their prepandemic levels
    this has been repeated over and over again, especially with regards to items like: consumer electronics, automobiles, food, gasoline

    my point is, corrective deflation to previous prices, especially in the economy of the united states is exceedingly rare, in my life time it has only occurred once over a very short period of time and it represented the financial markets and real estate bubbles popping in 2008


    * i actually can't think of a single economist that works for the fed or treasury telling us until last month anything other than the 'company line' in any monetary policy reports
    Simpler is better, except when complicated looks really cool.

  21. #21
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    Default Re: the fed has decided to stop lying to us about inflation

    . . . corrective deflation to previous prices . . . is exceedingly rare,
    True. So are epidemics that kill 700,000 people in the US, and 4-1/2 million worldwide, causing enormous disruptions to supply chains that are FAR more dispersed than in previous times. Again, while they may very well be wrong, 'lying' seems quite unjustified.
    "For a successful technology, reality must take precedence over public relations,
    for nature cannot be fooled."

    Richard Feynman

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    Default Re: the fed has decided to stop lying to us about inflation

    fair enough keith
    Simpler is better, except when complicated looks really cool.

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    Default Re: the fed has decided to stop lying to us about inflation

    I am admittedly a simple swing trader, so I appreciate all the insight from folks much better informed. When I look at CPI trends I notice that the current rolling average is as high as its been since '91 and looks like it'll continue up through the end of the year, especially if rates don't go up. Almost looks like a coiled spring. I'd have to break out the chicken bones for a more thorough analysis at my ability level.

    It seems like I'm confusing devaluation of currency with inflation itself. But wouldn't the big 2020 spike in M3 and its current trajectory suggest sustained inflationary pressure, especially as COVID ripples through the economy?

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    Default Re: the fed has decided to stop lying to us about inflation

    Quote Originally Posted by offbelayknife View Post
    I appreciate all the insight from folks much better informed.
    That would not be me. While I can understand statistics reasonably well, neither my grasp of economics nor my ability to predict the future is anything to brag about. But I'd bet on a bit of inflation for the next couple of years.
    "For a successful technology, reality must take precedence over public relations,
    for nature cannot be fooled."

    Richard Feynman

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    Default Re: the fed has decided to stop lying to us about inflation

    So is fed monetary policy gonna build semi fabs to fix the chip shortage and therefore the auto shortage? Is it gonna fix the backlog at the ports or in the rest of the transport system? Is it gonna build more bike factory’s?

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    Default Re: the fed has decided to stop lying to us about inflation

    thats an interesting question hugh

    cheap or free money from the fed would normally lead to investment in such
    but, the fed's defining mandate is low inflation, so do they reign that in by squeezing the money supply?

    or does the fed now have a new 'unvoiced' mandate? don't rock the financial markets??
    Simpler is better, except when complicated looks really cool.

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    Default Re: the fed has decided to stop lying to us about inflation

    Quote Originally Posted by Paul Pless View Post
    that graph keith posted illustrates my (somewhat rhetorically made) point about the fed lying to us
    most* fed and treasury economists that act as spokespersons for their organizations during the entirety of the pandemic, both trump and biden administrations,
    have repeatedly indicated that the rises in prices are transitory and the further implication has been that the prices would resume their prepandemic levels
    this has been repeated over and over again, especially with regards to items like: consumer electronics, automobiles, food, gasoline

    my point is, corrective deflation to previous prices, especially in the economy of the united states is exceedingly rare, in my life time it has only occurred once over a very short period of time and it represented the financial markets and real estate bubbles popping in 2008


    * i actually can't think of a single economist that works for the fed or treasury telling us until last month anything other than the 'company line' in any monetary policy reports
    I think you misunderstand the FED's comment. The FED may be looking at their goal of 2% annual inflation and indicating that inflation will return to that goal. That is much different than returning to prior price levels.
    Life is complex.

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    Default Re: the fed has decided to stop lying to us about inflation

    i did not misunderstand their commentary, i've been following it quite closely for some time, bit of a hobby of mine
    besides the treasury has been making the same comments all along too. . .
    Last edited by Paul Pless; 10-14-2021 at 06:31 PM.
    Simpler is better, except when complicated looks really cool.

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    Default Re: the fed has decided to stop lying to us about inflation

    Quote Originally Posted by Paul Pless View Post
    thats an interesting question hugh

    cheap or free money from the fed would normally lead to investment in such
    but, the fed's defining mandate is low inflation, so do they reign that in by squeezing the money supply?

    or does the fed now have a new 'unvoiced' mandate? don't rock the financial markets??
    Isn’t the unvoiced mandate that inflation is the defining mandate? Because there’s no reason it shouldn’t be an equal of maximum employment and moderate interest rates.

    just seems perverse to me to bring about economic pain to force people into the crappy but necessary jobs like truck driver or warehouse grunt they’ve told the market they don’t want to do (because those jobs are gonna go away) to stop “inflation” in the short term.

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    Default Re: the fed has decided to stop lying to us about inflation

    quite perverse hugh, quite
    Simpler is better, except when complicated looks really cool.

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    Default Re: the fed has decided to stop lying to us about inflation

    ^ & I keep saying,

    Cruelty and Destruction are the Plan.

    Denial changes that not a whit.

    Acknowledgement is only the start of the possibility of change.

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    Default Re: the fed has decided to stop lying to us about inflation

    the part normally played by oznabrag will be portrayed by durnik on this thread for the remainder of this fiscal year. . .

    Quote Originally Posted by Durnik View Post
    ^ & I keep saying,

    Cruelty and Destruction are the Plan.

    Denial changes that not a whit.

    Acknowledgement is only the start of the possibility of change.
    Simpler is better, except when complicated looks really cool.

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    Default Re: the fed has decided to stop lying to us about inflation

    it's big shoes to fill fer sher! 0-:

    but you know I'm correct. lotta stick, no carrot.

  34. #34
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    Default Re: the fed has decided to stop lying to us about inflation

    Quote Originally Posted by Durnik View Post
    But you know I'm correct.
    No you're not. The trouble with conspiracy theories ('Cruelty and Destruction are The Plan.') is that they attribute WAY too much power and organization to the supposed conspirators. Cruelty is real enough, blundering is common, destruction sometimes follows, but 'The Plan' is beyond human capability. Evil people are not gods. We may be in for a run of inflation set off by Covid disruption, analogous to how OPEC set off the last round. But a tinfoil hat won't help.

    One could even make a plausible argument that a bit of inflation, if the Fed doesn't overreact, would have benefits. There's a lot of debt out there, and paying it back with somewhat shrunken dollars has its points.
    "For a successful technology, reality must take precedence over public relations,
    for nature cannot be fooled."

    Richard Feynman

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    Default Re: the fed has decided to stop lying to us about inflation

    Nah, cruelty and destruction are the Republican plan. They are evil.

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