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Old 05-19-2010, 04:27 PM   #121
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According to the April CPI release . . . .

Food rose 0.5% over the last 12 months
Household Fuels & Utilities up 2.2%
Clothing down 0.9%
Rent down 0.8%
Homeowner's insurance up 3.5%
Which means if you rent and buy a lot of clothes, your personal inflation will be a lot lower. That certainly ain't me.

Food inflation is deceptive and usually understated because of "substitution" methods used in calculating food inflation (among other things). If an apple becomes too expensive due to inflation, they'll substitute a cheaper orange and claim food prices aren't higher.

And where's health care/insurance in your list?

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The big gainer . . . transportation. Up 12.8% because of higher oil prices and higher automobile prices.
You mean dealers inflated car prices during Cash for Clunkers? I'm SHOCKED!
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Old 05-19-2010, 04:40 PM   #122
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The big gainer . . . transportation. Up 12.8% because of higher oil prices and higher automobile prices.
phew!! ER'ed and sold our 2nd car just in time.
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Old 05-19-2010, 05:19 PM   #123
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I would say the CPI represents almost no person's actual, experienced inflation. It is irrelevant to me that rents went down; I have a fixed mortgage. My electric rates are fixed periodically by the department of public utilities; they don't change monthly or even yearly in most cases. Unless I buy a new car, that change is also irrelevant to me. And I almost never buy clothes in any event. Virtually the only things that have the potential to impact my life immediately are food and fuel.
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Old 05-19-2010, 08:04 PM   #124
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My Wii broke (from overuse, no doubt) so I replaced it last week. The new one only cost 51% of the original cost back in June 2008.

I bought a Kindle in March for less than 65% of the price for the same Kindle last year.

Yesterday I saw a perfectly good Dell laptop on sale for $399 on their website, and that was $145 off. Tempting, so tempting!

Everything may not be cheaper, but at least some things are.
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Old 05-19-2010, 08:28 PM   #125
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Longest-dated maturities favored as inflation falls

Stupid markets. Don't they know CPI is rigged?
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Old 05-19-2010, 09:01 PM   #126
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Most electronic things are getting cheaper and cheaper. But on the other hand, we had no need for many of these things before. I still remember when pay TV, over the air using an unscrambler box and not cable, came to Phoenix. It was a single channel, yet was a luxury, and not too many people subscribed. Now, we all have cable or satellite TV with 100 channels, and cell phones, and Netflix, and Internet services, etc... Together, the monthly charges add up to a fair amount of expenses that we did not have 30 years ago.
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Rob Arnott Doesn't Buy Positive Outlook on Inflation
Old 05-20-2010, 01:05 AM   #127
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Rob Arnott Doesn't Buy Positive Outlook on Inflation

I can't seem to get the url for this video, but it is at the botton of this page.

http://www.morningstar.com/#hideAd
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Old 05-20-2010, 07:12 AM   #128
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I can't seem to get the url for this video, but it is at the botton of this page.

Morningstar Stock, Mutual Fund, Hedge Fund, ETF Investment Research
The only video I saw from Arnott was against cap weight indexing bonds . . . didn't hear him say much about inflation.

But its true, opinions differ on this, as in all things. I'll only ask one question of Arnott . . . what did he say last year and the year before? He'll have a lot more credibility in my mind if he called for low inflation the past two years and is coming to the table with reasons why things are changing for the years or months ahead. If instead he's going to roll out the same old arguments that have been wrong for two years running then it really isn't worth our time to listen.
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Old 05-20-2010, 09:12 AM   #129
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Perhaps that's it:

Arnott: Not the Time to Be Greedy

Note that Arnott's PASDX fund is currently invested in long term bonds and that he thinks that now is not a good time to load up on inflation hedges (they are too expensive). As I do, he thinks that the biggest risk in the short to intermediate term is another recession (double dip) and that the inflation risk is still several years away. His investment ideas for fighting inflation in the future are predictable: TIPS, real estate, commodities, emerging market debts.
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Old 05-20-2010, 09:52 AM   #130
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If one uses a fine enough screen not much will get through. A more coarse sieve may be a better plan. I have never seen any valid method that not only shows what, but exactly when. Good luck!

Ha
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Old 05-20-2010, 03:40 PM   #131
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Note that Arnott's PASDX fund is currently invested in long term bonds and that he thinks that now is not a good time to load up on inflation hedges (they are too expensive). As I do, he thinks that the biggest risk in the short to intermediate term is another recession (double dip) and that the inflation risk is still several years away.
So own long-term bonds today?

That doesn't sound like a strong inflation call. It sounds like a deflation call in the near-term (which is the period where forecasts should be most accurate).

Several years from now, might we have significant inflation? Yup. Lots can happen in several years. But apparently we have to worry about near-term deflation before we have to worry about longer-term inflation.

Looks like Arnott and I agree.
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Old 05-20-2010, 04:14 PM   #132
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But how much of it got "trickled down" to the Joe Blows, and how much got stuck with the bankers?
Dang. If only the federal government could figure out some way they could take action to directly increase the amount of money individuals have to spend and to invest. I wonder if we could maybe think of some method . . . nahh. It's probably impossible.
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Old 05-21-2010, 06:43 AM   #133
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All I can say is good thing government did most of the very unpopular things it did . . . TARP, emergency Fed lending, "quantitative easing" and a zero Feds Funds rate in the face of persistent cries of ever looming hyperinflation.

One can only imagine the wreckage we'd be living through had the critics of these policies prevailed. But don't expect anybody to ever admit they were wrong.
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Old 05-21-2010, 09:21 AM   #134
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All I can say is good thing government did most of the very unpopular things it did . . . TARP, emergency Fed lending, "quantitative easing" and a zero Feds Funds rate in the face of persistent cries of ever looming hyperinflation.

One can only imagine the wreckage we'd be living through had the critics of these policies prevailed. But don't expect anybody to ever admit they were wrong.
Hang around Spanky......this ain't over yet....
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Old 05-21-2010, 09:30 AM   #135
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All I can say is good thing government did most of the very unpopular things it did . . . TARP, emergency Fed lending, "quantitative easing" and a zero Feds Funds rate in the face of persistent cries of ever looming hyperinflation.

One can only imagine the wreckage we'd be living through had the critics of these policies prevailed. But don't expect anybody to ever admit they were wrong.
Don't leave out the wisdom of the continued hemorrhaging of taxpayer money through Freddie and Fannie. These entities no longer even maintain a pretense of eventually becoming solvent, they are now pass-throughs for government money with a lifetime charter.

I guess we'll just have to keep imagining the unimaginable. I think we'll have help--apparently there will be no shortage of folks reminding us of the (notional, postulated, horriffic) future we narrowly avoided. We'd be eating our dogs and living in caves right now if not for the brilliance and benevolence of our government rulers (of both parties). It only looks like waste, patronage, and statism.

These fables of a terrible fate avoided by huge government intervention will become more important as the public starts to experience the real pain of these ill-advised actions. They'll grow uncomfortable, and restless. Counter this with "Sure, taxes are high, we spent our kids into a lifetime of debt, we gave irresponsible industries proof that the government would bail them out, and our economic growth rate is now the same as that of Malawi. But let me tell you how bad it could have been . . ." Maybe it will work, apparently it is worth a try.
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Old 05-21-2010, 10:24 AM   #136
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Don't leave out the wisdom of the continued hemorrhaging of taxpayer money through Freddie and Fannie. These entities no longer even maintain a pretense of eventually becoming solvent, they are now pass-throughs for government money with a lifetime charter.

I guess we'll just to keep imagining the unimaginable. I think we'll have help--apparently there will be no shortage of folks reminding us of the (notional, postulated, horriffic) future we narrowly avoided. We'd be eating our dogs and living in caves right now if not for the brilliance and benevolence of our government rulers (of both parties). It only looks like waste, patronage, and statism.

These fables of a terrible fate avoided by huge government intervention will become more important as the public starts to experience the real pain of these ill-advised actions. They'll grow uncomfortable, and restless. Counter this with "Sure, taxes are high, we spent our kids into a lifetime of debt, we gave irresponsible industries proof that the government would bail them out, and our economic growth rate is now the same as that of Malawi. But let me tell you how bad it could have been . . ." Maybe it will work, apparently it is worth a try.
Agree 1000%. If the future of America is government running everything, we are screwed. It appears we are well on our way in just a year and a half.......
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Old 05-21-2010, 10:47 AM   #137
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Agree 1000%. If the future of America is government running everything, we are screwed. It appears we are well on our way in just a year and a half.......
ah shoot - we've been going downhill a lot longer than a year and a half.
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Old 05-21-2010, 11:08 AM   #138
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We're also forgetting about hedonics. The way the government calculates it...

Say the price of a new fridge goes up 100% but the newer fridge is twice as energy efficient as the old, then the price increase in dollar terms is never counted in the CPI. I can see many instances where this kind of fuzzy math can pose as problematic.
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Old 05-21-2010, 02:40 PM   #139
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apparently there will be no shortage of folks reminding us of the (notional, postulated, horriffic) future we narrowly avoided.
Or those whose political leanings prevent them from even acknowledging the history they just lived through. It's astounding, really.
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Old 05-21-2010, 02:54 PM   #140
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If the future of America is government running everything, we are screwed
. . . and those whose eyes are kept tightly sealed against the present as it unfolds . . .

TARP Repayments
(including warrants sold)
US Hires Adviser for GM IPO
US to Sell Citigroup equity

etc, etc . . .
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