Comments on: PPI Jumps – Talking Heads Say All is Well

By: The Anti-Gnostic

The Anti-Gnostic — Fri, 15 Oct 2010 14:35:51 +0000

It always struck me that if you want a metric for inflation, to the extent you can get one, you should track a large basket of those goods that are in most universal and constant demand over time. Food and energy would seem to qualify, so this is probably why they don’t use them.

By: Bad dog

Bad dog — Fri, 15 Oct 2010 14:31:39 +0000

Bad wheat crop in Russia due to floods raised grain prices and meat prices by extension. But not by anywhere near as much as the spot prices reflect. That comes from speculators borrowing Bernanke’s money from the big banks and turning a blip into a bubble. Another wealth transfer from the poor to the ruling elite.

By: Bad dog

Bad dog — Fri, 15 Oct 2010 14:26:09 +0000

That’s because we have had a massive wave of innovation. It would be dropping even more without Fed intervention.

By: J. Murray

J. Murray — Fri, 15 Oct 2010 00:36:19 +0000

Considering that there isn’t any major news of a food shortage nor is there any news of some catastrophe increasing food demand, it’s unlikely the supply-demand factor has much to do with it.

By: Craig

Craig — Thu, 14 Oct 2010 23:33:06 +0000

Far be it from me to defend government pronouncements of any kind, but these price increases are not necessarily due to inflation. Bernanke’s desperate attempts to inflate the currency may not have caused them; they might simply be the result of normal supply and demand fluctuations.

The inflation will come, no doubt, but it may well not have materialized yet.

By: J. Murray

J. Murray — Thu, 14 Oct 2010 17:55:05 +0000

It’s a problem hammered into our minds from birth. I’ve had a very difficult time getting rid of the inflation = price increase thing. The real fact is, no one knows what the true rate of inflation is because the price change is an intermingling of both changes in money supply and changing consumer preferences. If someone told me they could separate the two and get real inflation, I’d call them a liar.

By: J. Murray

J. Murray — Thu, 14 Oct 2010 17:53:42 +0000

That’s great, just keep looking over here and see how this 60″ 3DTV dropped in price.

By: Fallon

Fallon — Thu, 14 Oct 2010 17:37:52 +0000

Taylor is right. But the others, Taylor? Who, where?

By: Taylor

Taylor — Thu, 14 Oct 2010 17:31:52 +0000

Briggs,

Any idea why you and other Austrians are getting so sloppy with language? Price increase = inflation?

By: Dennis

Dennis — Thu, 14 Oct 2010 16:22:37 +0000

The rational for excluding food and energy costs from the “core” index is that these two items have a comparatively high degree of volatility, and I believe that this is a factually correct statement. Thus, the exclusion of food and energy costs from short-term monthly and possibly even quarterly measures of price inflation is arguably based on good reasoning. However, for anything other than these short time periods, the core index is not an accurate measure of price inflation, as food and energy expenditures are obviously significant.