Gold. GOLD!!!!! Gooooollllllllllddddddd!!!!!!!!

[tokeprep]

thats the cheapest filet mignon I have ever seen per pound and some of the most expensive Flank I have ever seen.

Here the prices are plain decent and their tenderloins cost twice as much as your online retailer. Skirt steak is only $8, filets are $25 http://www.texasgrassfedbeef.com/grass_fed_beef_online_store.htm

Are you sure its Beef? Maybe Kangaroo.

I guess I didn't realize just how much prices on beef have actually gone up, a half side of beef lasts us over a year.

Wow there sure is a shitload of inflation going on.


BTW, where did I say it was the fed that gives out the CPI numbers? Are you sure I just wasn't blaming the fed for the inflation?

It's cheaper than that in real a store (perhaps depending on where you live). But the ratio is about 2:1 from both sources; in your example, it was 7.5:1. There's only a lot of inflation going on if that's the case in aggregate; the price of beef in isolation does not meaningfully measure a person's purchasing power.

You attributed the BLS's substitution assumptions (at least your inaccurate version of them) to the Fed; you said something like "The Fed thinks filet mignon is hamburger!" The Fed has nothing to do with it.

 

[tokeprep]

It would be understated, not sure how you get that it would be overstated. If they use the one that goes up the least, then its understated, its a really really simple concept to figure out.

Are you suggesting that they measure inflation in these categories by assuming the consumer substitutes for the product with the lowest inflation value and then attributing that level of inflation to the category? In your example, the price of a pound of beef, according to CPI, increased from $4 to $30 because filet had the lowest inflation rate. The inflation rate on beefsteak wasn't the rate of inflation on the substituted product; the inflation rate was the change in price of 2013 beef from 2012 beef. In your example, the consumer pays 7.5 times more for beef, not 7% more (whatever your rate was). This overstates the inflation rate because people didn't actually buy filet--the bought more flank steak since it was 7.5 times cheaper. Your CPI inflation rate for beef would be 700% over 2012 beef, even though people didn't actually pay 700% more for the equivalent amount of 2012 beef.

 

[NoDrama]

The Fed has nothing to do with it.

we all get confused at times don't we? After all who is the primary driver of inflation in the USA? The Federal Reserve and their network of Banks. The Fed has EVERYTHING to do with inflation.

 

[NoDrama]

Are you suggesting that they measure inflation in these categories by assuming the consumer substitutes for the product with the lowest inflation value and then attributing that level of inflation to the category? In your example, the price of a pound of beef, according to CPI, increased from $4 to $30 because filet had the lowest inflation rate. The inflation rate on beefsteak wasn't the rate of inflation on the substituted product; the inflation rate was the change in price of 2013 beef from 2012 beef. In your example, the consumer pays 7.5 times more for beef, not 7% more (whatever your rate was). This overstates the inflation rate because people didn't actually buy filet--the bought more flank steak since it was 7.5 times cheaper. Your CPI inflation rate for beef would be 700% over 2012 beef, even though people didn't actually pay 700% more for the equivalent amount of 2012 beef.

I have tried to explain it three times already, each way differently, hoping that you would understand. I have failed.

If they use the lesser of the two because it is implicity implied that people will substitute the lower rate rising beefsteak over the higher rising price. i.e if Flank steak goes up $2 a pound to $10, and Filet Mignon goes up $1.50 to $32 a pound, the BLS ASSUMES that you will buy the Filet Mignon.

Its not hard to understand, so I don't see where you get the 700% figure when it would be 2%. This UNDERSTATES the inflation because one price has been SUBSTITUTED over another, giving a false impression.

They don't average the prices and compare them to last year.

 

[beardo]

Is your cow of anymore value than it was 10 years ago? Is the cow any different or better? Is there inflation? or is it devaluation of the medium of exchange? which has changed in value and worth?

 

[heckler73]

I have tried to explain it three times already, each way differently, hoping that you would understand. I have failed.

In more ways than you can even conceive.

If they use the lesser of the two because it is implicity implied that people will substitute the lower rate rising beefsteak over the higher rising price. i.e if Flank steak goes up $2 a pound to $10, and Filet Mignon goes up $1.50 to $32 a pound, the BLS ASSUMES that you will buy the Filet Mignon.

Its not hard to understand, so I don't see where you get the 700% figure when it would be 2%. This UNDERSTATES the inflation because one price has been SUBSTITUTED over another, giving a false impression.

They don't average the prices and compare them to last year.

If it's not hard to understand, why don't you understand it then?
If averages are not used, how is the CPI calculated according to you?
What is the definition of MEAN according to your recollection of statistics?

You still haven't bothered to lift your finger to press the link I gave earlier, or else you wouldn't be digging your hole deeper.

And you're trying to be the champion of your side...how pathetic.
Just give up or get someone else to help you because your incompetence is not helping your case.

 

[tokeprep]

I have tried to explain it three times already, each way differently, hoping that you would understand. I have failed.

If they use the lesser of the two because it is implicity implied that people will substitute the lower rate rising beefsteak over the higher rising price. i.e if Flank steak goes up $2 a pound to $10, and Filet Mignon goes up $1.50 to $32 a pound, the BLS ASSUMES that you will buy the Filet Mignon.

Its not hard to understand, so I don't see where you get the 700% figure when it would be 2%. This UNDERSTATES the inflation because one price has been SUBSTITUTED over another, giving a false impression.

They don't average the prices and compare them to last year.

You keep repeating that I'm correctly describing your ridiculous conclusion. You don't even seem to understand how CPI is calculated.

[h=4]"How do I read or interpret an index?[/h] An index is a tool that simplifies the measurement of movements in a numerical series. Most of the specific CPI indexes have a 1982-84 reference base. That is, BLS sets the average index level (representing the average price level)-for the 36-month period covering the years 1982, 1983, and 1984-equal to 100. BLS then measures changes in relation to that figure. An index of 110, for example, means there has been a 10-percent increase in price since the reference period; similarly, an index of 90 means a 10-percent decrease. Movements of the index from one date to another can be expressed as changes in index points (simply, the difference between index levels), but it is more useful to express the movements as percent changes. This is because index points are affected by the level of the index in relation to its reference period, while percent changes are not."

http://www.bls.gov/cpi/cpifaq.htm

The base price level is compared against the present price level to calculate the value of the index--it's not based on the percent change of an item in the category that BLS assumes consumers substitute for.

 

[tokeprep]

Is your cow of anymore value than it was 10 years ago? Is the cow any different or better? Is there inflation? or is it devaluation of the medium of exchange? which has changed in value and worth?

The medium of exchange is only devalued if, in aggregate, it has less purchasing power than it did previously, in aggregate. You have to subtract wage growth from inflation to find a real value.

The anecdotal experience of inflation is flawed because some of the most significant price increases people have mentioned in these threads comprise a tiny part of the household budget. Kynes went on about bread, for example. I spend $2.50 a week on bread, $130 a year. If the price doubled over a year, it would only be $260; even for a full time minimum wage worker that's a tiny portion of their budget. Milk, same story. Now we're talking about beef? How much did you spend on beef last year? $10,000? Of course not.

The presumption seems to be that because food costs have increased substantially over the past ten years that the CPI must be fudged and real inflation is actually much higher, but that's a farce. The simple fact is that food is a small part of the average family budget--it's easily cancelled out by other parts. The same goes for energy (although the trend looks to be decline on that front now).

 

[NoDrama]

In more ways than you can even conceive.



If it's not hard to understand, why don't you understand it then?
If averages are not used, how is the CPI calculated according to you?
What is the definition of MEAN according to your recollection of statistics?

You still haven't bothered to lift your finger to press the link I gave earlier, or else you wouldn't be digging your hole deeper.

And you're trying to be the champion of your side...how pathetic.
Just give up or get someone else to help you because your incompetence is not helping your case.

So they just average the prices and compare them to last year? LOL if they did that they wouldn't need to substitute with the use of Heuristics or simplify a complicated equation by using hedonics now would they?

You keep telling me that the BLS does not substitute prices, but all the evidence says they do. This understates the inflation and makes in incomparable to previous high inflation periods.


Remember the 70's? Inflation of 9-14%. people were worried and gold shot to the moon.

If we do the inflation numbers the same way as then, inflation is at 9-12% currently

Thats enough to make me worry, my paychecks aren't doubling every 7 years to keep up with that.

Also you need to recognize that people who are single, living alone and only needing to buy a single loaf of bread each week don't see the effects of inflation as much as someone whose livelihood depends on purchase of commodities and has a whole family to feed.

It takes you a week to go through a cheap loaf of bread, It takes us 1 or 2 days. 1 gallon of milk per meal.

Government has an interest in keeping official CPI low as all their raises and SS increases all go by that number.

Don't even get me started with the hundreds of billions government wastes every year.

 

[NoDrama]

Why isn't education or gold or silver or stocks part of the inflation figures? How about Medical care? Insurance? Oh wait, they do, its called CPI U, which we all know gets reported in the MSM, NEVER.

They seem to cherry pick everything. Don't forget all the substituting they do.

The BLS puts out BS employment numbers too, where the number of unemployed people rises, but the unemployment rate doesn't.

The BLS really needs to remove the L.

 

[NoDrama]

The presumption seems to be that because food costs have increased substantially over the past ten years that the CPI must be fudged and real inflation is actually much higher, but that's a farce. The simple fact is that food is a small part of the average family budget--it's easily cancelled out by other parts. The same goes for energy (although the trend looks to be decline on that front now).

Outside the USA, in other countries, food is 40-70% of people budgets, Since all commodities are priced in dollars, and all countries need to keep a reserve of dollars, inflation affects those people much more than it affects a US Citizen. We can export a huge amount of our inflation by the use of treasuries, but rest assured, the rest of the world will not slumber forever.

 

[tokeprep]

Outside the USA, in other countries, food is 40-70% of people budgets, Since all commodities are priced in dollars, and all countries need to keep a reserve of dollars, inflation affects those people much more than it affects a US Citizen. We can export a huge amount of our inflation by the use of treasuries, but rest assured, the rest of the world will not slumber forever.

What is this bullshit? We've given up on the inflation unicorn for the United States and now we're riding him off into the rest of the world? Create mythical inflation everywhere in the world, inflation unicorn!

I'm curious, if no one bought commodities, what would life be like in commodity dependent places?

 

[NoDrama]

What is this bullshit? We've given up on the inflation unicorn for the United States and now we're riding him off into the rest of the world? Create mythical inflation everywhere in the world, inflation unicorn!

I'm curious, if no one bought commodities, what would life be like in commodity dependent places?

What? You didn't know that inflation happens other places? It does.

Argentina only has 11% inflation, officially.

If no one bought commodities then the prices of anything would be $0, because without commodities, everyone is just dead.

 

[NoDrama]

Now lets see, where were we with this thread.

Oh yeah, Gold

Gold will be less than $1 any day now. The bubble has burst and no one is buying the yellow metal.

 

[beardo]

Now lets see, where were we with this thread.

Oh yeah, Gold

Gold will be less than $1 any day now. The bubble has burst and no one is buying the yellow metal.

Wait, I thought a U.S. $ was Gold? Or is it Silver? A dollar is Silver isn't it? That's why it's valuable right?

 

[NoDrama]

Wait, I thought a U.S. $ was Gold? Or is it Silver? A dollar is Silver isn't it? That's why it's valuable right?

You talking constitutional money, yes its 371.25 grains of fine silver. A store of value, money.

A US Dollar is NOT money as it is not a store of value ( Hence inflation), it is a currency and one that is not allowed under the US Constitution. The whole money sytem is 100% UNCONSTITUTIONAL.

 

[UncleBuck]

So they just average the prices and compare them to last year? LOL if they did that they wouldn't need to substitute with the use of Heuristics or simplify a complicated equation by using hedonics now would they?

You keep telling me that the BLS does not substitute prices, but all the evidence says they do. This understates the inflation and makes in incomparable to previous high inflation periods.


Remember the 70's? Inflation of 9-14%. people were worried and gold shot to the moon.

If we do the inflation numbers the same way as then, inflation is at 9-12% currently

Thats enough to make me worry, my paychecks aren't doubling every 7 years to keep up with that.

Also you need to recognize that people who are single, living alone and only needing to buy a single loaf of bread each week don't see the effects of inflation as much as someone whose livelihood depends on purchase of commodities and has a whole family to feed.

It takes you a week to go through a cheap loaf of bread, It takes us 1 or 2 days. 1 gallon of milk per meal.

Government has an interest in keeping official CPI low as all their raises and SS increases all go by that number.

Don't even get me started with the hundreds of billions government wastes every year.

you meant to say your welfare checks from the federal government aren't doubling every 7 years.

 

[echelon1k1]

you meant to say your welfare checks from the federal government aren't doubling every 7 years.

I'm sorry, are you now gainfully employed paying income taxes?

 

[UncleBuck]

I'm sorry, are you now gainfully employed paying income taxes?

i am, as always.

and it's true, nodrama collects welfare from the federal government. he tries to dress them up calling them "transfer payments" or "agricultural subsidies", but there is no hiding the fact that he collects his checks straight from the american taxpayers.

 

[NoDrama]

i am, as always.

and it's true, nodrama collects welfare from the federal government. he tries to dress them up calling them "transfer payments" or "agricultural subsidies", but there is no hiding the fact that he collects his checks straight from the american taxpayers.

I don't deny it at all, not one bit. I actually enjoy just lazing around the house while good taxpayers give me their hard earned dollars. It isn't welfare, I had to fill out paperwork and stuff to get all that money you know? And people had to be starving in order for me to supply most of my Soy to an elevator that almost exclusively deals with US Government foreign aid program. They pay top dolla, err I mean you pay top dolla. Nothing but the best for the warlords of Somalia here!!

Not my fault the EPA mandated that almost all gasoline be sold with ethanol in it, all I know is that corn prices are great because of the subsidies. Used to be I had trouble selling my corn, the only people buying were ones who needed cattle feed, but in this state there is so much green grass they don't need it much. So I had to ship it out of state to sell it. Now all I gotta do is take it to the nearby Co-Op who makes sure it gets to a nearby ethanol refinery and at some point into your gas tank.

Not my fault government decided to give large subsidies to alternative energy producers, leaving me with large tax breaks that minimize any taxes I pay.

You call it welfare, but its really a transfer payment. Welfare is when you don't have to do anything to get the money. I have to tell ole GPS where to plow next you know!