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Rory
Post  Post subject: Inflation lookout thread  |  Posted: Mon Sep 05, 2016 5:12 pm
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The only way to challenge the government-published CPI figure is to note real changes in the price of goods that we actually buy on a regular basis.

Here are some I have noticed:

County travel pass (monthly) -> was £100 now £111
M&S Iced Latte -> was £1.19 now £1.50
Chocoate bars (universal) -> was 50p now 65p

That's a 22% rise on average. In order to be representative, I would need to do the same for every single item I purchase, but these are just a few anecdotal examples.

What price rises have you noticed?

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Mon Sep 05, 2016 5:56 pm
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I presume then your intent is to focus mostly on headline inflation, not core inflation (the clearly better less volatile measure)?

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Mon Sep 05, 2016 6:05 pm
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If I spend most of my income on items classed under 'headline inflation', then does it really matter what 'core inflation' happens to be?

Each month I spend almost all my income on: rent, travel, food and drink, general groceries (toiletries, cleaning products), phone contract, utilities bill, energy.

When my shoes have holes in them, I will go out and buy another pair. Apart from that, I don't buy anything that doesn't fall under 'headline inflation'.

So, it depends if you are genuinely interested in the real cost of living, or in performing statistical tricks. From my perspective I am interested in the real cost of living.

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Mon Sep 05, 2016 6:19 pm
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So, yes then?

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Mon Sep 05, 2016 7:15 pm
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Short answer: yes

But I'm not going to concede to the criticisms implicit in your loaded question

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Mon Sep 05, 2016 8:11 pm
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As shared about a day ago in one of your other threads:

Image

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Sep 16, 2016 1:52 pm
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Again, history matters...

Image

And here's just the last 15 years magnified:

Image

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Sep 16, 2016 1:53 pm
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Slightly different topic focus, but this tells a similar story:

Image

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Sep 16, 2016 2:35 pm
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If I were to respond, my response would violate the standards of the Forum, and you would lock the thread. So, I won't respond.

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Sep 17, 2016 2:31 am
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Bullshit. If you have a point with merit, one that you can defend with evidence and reason, then you'll be fine.

If, however, all you have is conspiracy theory and claims that the last hundred years of economic data is all lies... part of some century long con... then yes. You'll be treated similarly as someone claiming the moon landings were faked or that climate change is a liberal hoax.

You decide. I'm open to a quality argument. I'll even change my stance when proven wrong.

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Sep 17, 2016 6:36 am
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Like I said, you wouldn't accept my response. So I won't make it.

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Sep 17, 2016 1:37 pm
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Sounds an awful lot like you're acknowledging that your position is indefensible

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Sep 17, 2016 7:37 pm
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I'm acknowledging that you would prefer government statistics to be treated as gospel, whereas I am more interested in primary data derived directly from the life experiences of people who exist in reality. There is a tension in that, and some incompatibility.

I trust my eyes.

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Falconer360
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Sep 17, 2016 8:21 pm
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Rory wrote:
I trust my eyes.

Only slightly related, eye witness testimony has been shown to be highly unreliable. This is part of why anecdotal evidence is not accepted.

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Sep 17, 2016 8:56 pm
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I prefer to rely on my own imperfect judgement than on the judgement of a party with vested interests.

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Falconer360
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Sep 17, 2016 9:48 pm
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Don't get me wrong Rory, I'm not knocking your judgement, I'm just pointing out that two people can look at the same data and come to opposing conclusions, just like two people can watch the same event have have different opinions of what happened.

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marnixR
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Sep 17, 2016 10:01 pm
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i've been trying to figure out the difference between headline inflation, core inflation, consumer price index and retail price index, and my head hurts

all that i gather from it is that the "official" index used by the UK government has the advantage of being comparable over time and with other countries, basically using comparable packages of products

presumably it's also in their interest to link many pension rises to (lower) consumer index rather than the retail index, that way they don;t have to pay so much to pensioners

on the other hand, no-one stated that even the consumer index will affect every single person the same way, and each person's perception of inflation will vary depending on how the various items in the package used to measure inflation go up or down - that way it is quite possible your personal index goes up even if the official goes down, if the items that have gone up are the ones you use more of of, and the items that have gone down you don't use at all (e.g the price of bread versus the price of hotels)

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Sep 17, 2016 11:54 pm
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Core inflation strips out things like petrol and food which are extremely volatile. This helps better focus on policy and trade and things within our control whereas headline inflation goes way up and way down due to things like not enough rain during the growing season or some terrorist activity in the Middle East, for example.

You're also correct that the indexes help compare across countries and over time.

What Rory seems to miss is that it's not just "the government" checking and compiling these numbers. It's also independent economists, financiers, and myriad other analysts and observers with no vested interest in the outcome (or at least different vested interested often in direct opposition to those of the government).

No matter how big and evil one sees the government as being, we can rely on people checking their work. It's a really bad argument that the numbers are cooked and "damn you are your facts! my eyes don't lie!"

Yes, people struggle. Lots of people aren't doing well. There are copious examples and anecdotes of that. That doesn't change the trends, medians, and averages, though, and those all show improvement for a greater number than those experiencing decline.

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sun Sep 18, 2016 3:34 am
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1 in 7 Americans using food stamps. Forgive me if I don't believe in the recovery.

47% of Americans would not be able to source 400 dollars in an emergency.

The Treasuries bubble is propping up the stock market to give an illusion of economic health.

And it really doesn't matter to the average citizen what core inflation happens to be - living paycheck to paycheck, it's safe to assume that their cost of living is determined almost entirely by food and fuel prices.

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marnixR
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sun Sep 18, 2016 9:57 am
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the trouble with statistics is that you can use so many different ones of them that you can try and prove just about anything if it fits your purposes

that's why the government doesn't have to make up the stats - all they need to do is select the ones they like

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Mon Sep 19, 2016 3:50 am
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Rory wrote:
it really doesn't matter to the average citizen what core inflation happens to be

Yet that's where you chose to focus your thread and also your subsequent comments, hence the response you've received.

Let me be clear: From my perspective, it's like you've opened a thread about stray cats when your true intent was to conduct an exploration of post menopausal loneliness. It's a bit of a stretch, to put it kindly.

Both issues deserve focus and respect, but your approach suggests that you either don't understand these topics well enough to offer it or don't care. Neither speak well of the voice you add to the discussion.

Rory wrote:
living paycheck to paycheck, it's safe to assume that their cost of living is determined almost entirely by food and fuel prices.

And housing, and schooling, and transportation, and taxes, and healthcare, and elderly care, and ...

What point are you trying to make? You post as if others aren't aware of these things, their importance, and their relevance in context of the broader economy.

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Mon Sep 19, 2016 4:15 am
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It's too early for this - I'll refute you later

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Tue Sep 20, 2016 1:09 pm
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Quote:
iNow wrote:
Let me be clear: From my perspective, it's like you've opened a thread about stray cats when your true intent was to conduct an exploration of post menopausal loneliness. It's a bit of a stretch, to put it kindly.


I’m interested in the cost of living for ordinary citizens. Both headline and core inflation fit that bill (excuse the pun) so both are relevant. I’ve opened a thread about two Siamese cats – you are berating me for talking about one sibling more than the other.

Quote:
iNow wrote:
Both issues deserve focus and respect, but your approach suggests that you either don't understand these topics well enough to offer it or don't care. Neither speak well of the voice you add to the discussion.


I don’t understand the issues well, that much is true, and that much I have already openly conceded to. It is difficult to have a strong grasp of economics when it is not even covered at high school level. However, I understand well enough the disparity between the cost of living as portrayed by the government for their own purposes, versus the cost of living as experienced by myself, my family, my neighbours, and pretty well anyone I talk to. The cost of living is also reflected in statistics – I know you prefer those over direct experience.

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iNow wrote:
And housing, and schooling, and transportation, and taxes, and healthcare, and elderly care, and ...

What point are you trying to make? You post as if others aren't aware of these things, their importance, and their relevance in context of the broader economy.


Yes – all of those components matter. But when the cost of living is being calculated on the basis of the price of hotel rooms, in order to represent the economic viability of a citizenry struggling to put gas in their car and food on the table, for whom staying in a hotel is a pipe dream – what is the point of the statistic?

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Wed Sep 21, 2016 5:06 am
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Rory wrote:
But when the cost of living is being calculated on the basis of the price of hotel rooms, in order to represent the economic viability of a citizenry struggling to put gas in their car and food on the table, for whom staying in a hotel is a pipe dream – what is the point of the statistic?

It's not "being calculated on the basis of the price of hotel rooms."

FFS...That was one article you read on one website likely looking to drive traffic and clicks, not how these calculations regarding cost of living and inflation and historical trends are performed by serious people.

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Wed Sep 21, 2016 8:26 am
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Hotel rooms were factored in by the Office for National Statistics (ONS) i.e. government agency. I agree they're not serious people :D they're charlatans

http://www.bbc.co.uk/news/business-37347669

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Wed Sep 21, 2016 1:17 pm
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Ok

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Wed Sep 21, 2016 4:08 pm
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You're hard to please, iNow :P

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Oct 14, 2016 12:40 am
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http://www.bbc.co.uk/news/business-37646761

Tesco and Unilever in disagreement as Unilever wants to increase prices 10%.

Major corporations are perhaps beginning to SEE inflation.

But I don't think it actually has that much to do with Brexit, although that is a helpful smoke-screen for politicians. The economy is fundamentally extremely weak. You can't quadruple the monetary base and expect it to have no effect on the value of currency/inflation. Fat lady is singing.

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Oct 14, 2016 12:50 am
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A company enjoying near monopoly choosing to raise prices has much more to do with supply and demand than inflation.

If the economy is as "fundamentally weak" as you claim, then the Brexit vote is only making it worse.

I believe also you're suggesting inflation is happening when instead the far more parsimonious explanation is devaluation of the pound (again, largely due to the Brexit vote).

From just today:

http://www.economist.com/blogs/buttonwo ... valuations
Quote:
This can’t last for long and eventually there will be a compromise. Unilever will cut its price demands and Tesco will absorb some of the hit. But supermarket margins aren’t high and Britons will end up paying more, just as they will for petrol (the initial post-referendum plunge in sterling coincided with weakness in the oil price but now the latter has rebounded).

Of course, that is what devaluation (strictly speaking, depreciation) means. Britain’s exports are worth less (in foreign currency terms) and its imports cost more. This is a good thing for exporters only to the extent that they can gain market share via lower prices and that this volume boost is not offset by the greater cost of components (eg a widget-maker has to pay more for the metals that go into the widget).

It will, however, be experienced like inflation by folks like you.

Quote:
Brexit means not just Brexit but higher prices. Since wages are unlikely to rise to compensate, real disposable income will be squeezed; economists are talking of a 2.5-3% inflation rate next year.

You made your bed. Now you have to sleep in it.

Rory wrote:
You can't quadruple the monetary base and expect it to have no effect on the value of currency/inflation.

There is no reasonable person who expects no effect, so this is AGAIN little more than a strawman. There are expected effects, just not the ones you seem to think or the ones you continue to believe despite the preponderance of evidence to the contrary.

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Oct 14, 2016 4:56 pm
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Mark Carney says inflation will rise

http://www.bbc.co.uk/news/business-37652467

But, yeah, I'm sure I'm just being paranoid :roll:

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Oct 14, 2016 6:07 pm
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From your article: "Mark Carney has said that inflation will rise on products such as food because of the fall in the value of the pound."

I said exactly this myself in the post immediately preceding yours. The fall in the value of the pound is an issue. Why the abrasive tone as if the rest of us are blind or somehow missing something?

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Oct 15, 2016 11:26 am
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Quote:
iNow wrote:
From your article: "Mark Carney has said that inflation will rise on products such as food because of the fall in the value of the pound."

I said exactly this myself in the post immediately preceding yours.


What you said was,

Quote:
iNow wrote:
I believe also you're suggesting inflation is happening when instead the far more parsimonious explanation is devaluation of the pound.


Quote:
iNow wrote:
The fall in the value of the pound is an issue. Why the abrasive tone as if the rest of us are blind or somehow missing something.


Because, for one, you recently claimed that corporations like Unilever are putting up prices for reasons other than inflation,

Quote:
iNow wrote:
A company enjoying near monopoly choosing to raise prices has much more to do with supply and demand than inflation.


You have also said,

Quote:
iNow wrote:
That doesn't change the trends, medians, and averages, though, and those all show improvement for a greater number than those experiencing decline.


I’m sure you’re right and rising inflation won’t affect the greater number :roll:

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Oct 15, 2016 5:00 pm
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The value of the pound is dropping due to the Brexit vote. That reduces purchasing power which gets experienced as inflation, especially on headline items like food and energy.

You don't know why store prices are changing and are arguing based on assumption not fact. I don't know, either. Chances are good we're both making relevant points here since the world is rarely binary, black and white.

Inflation for durable goods and other core items may not seem relevant to you personally, but is the true measure of the trend you're trying to discuss. I wish you'd focus there so we can pursue this exchange meaningfully.

I readily stipulate that my perspective is US centric. Inflation here (and in most other parts of the world) is quite low, so low, in fact, that people are actively discussing how best to intentionally increase it.

Your situation is different, though. Your location and especially your personal circumstances make you extremely price sensitive. I get that, but you also blame debt leveraging and deficit spending as being the root cause. That's simply wrong. Your Brexit vote is the single most important and relevant driver here and it's that which led to the current devaluation of the pound. That devaluation obviously causes an inflation of prices on headline goods.

I'm happy to talk about any of these things. It's an interesting and relevant topic. Disagreement is common and can be fun if we are able to better educate each other.

Unfortunately, your history on these topics has been to focus on conspiracy and your approach has been to prioritize personal intuition over actual data and reality based trends. That's unscientific and seems odd given your frequent proclamations about your love of science and its method.

If you'd like to discuss the underlying dynamics of your economic woes or best known methods to address those in a way that will be practical and most likely to improve the lives of the majority, that would be lovely. I'd welcome that, but I'm long ago out of patience when it comes to unfocused rants against the big bad government and related public servants, especially when those are coupled with the regular introduction of baseless unfocused conspiracy theories.

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sun Oct 23, 2016 9:16 pm
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Another thing I have noticed: smaller pack sizes. Just bought a carrot cake bar, 6 x 3 x 2cm. It has a 1cm margin along each of the length, width and height. Honestly, it looks lost. If you had to guess, you'd say the QC in packaging at the factory made a mistake. Why does the manufacturer apparently pay to produce excess packaging? Probably, to appear to be selling exactly the same product at the original price.

Not sure if product mass is factored into the inflation equation? I'll bet it isn't.

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sun Oct 23, 2016 9:22 pm
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My guess would be that de facto inflation is running at 10%

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Lynx_Fox
Post  Post subject: Re: Inflation lookout thread  |  Posted: Thu Oct 27, 2016 9:44 pm

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Rory wrote:
My guess would be that de facto inflation is running at 10%


In the US more like 1-2%, very low for many years now.


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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Thu Oct 27, 2016 11:20 pm
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Is that because the inflation has effectively been exported?

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Oct 28, 2016 3:36 am
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What does that even mean? Please elaborate.

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marnixR
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Oct 28, 2016 7:17 am
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Rory wrote:
Another thing I have noticed: smaller pack sizes. Just bought a carrot cake bar, 6 x 3 x 2cm. It has a 1cm margin along each of the length, width and height. Honestly, it looks lost. If you had to guess, you'd say the QC in packaging at the factory made a mistake. Why does the manufacturer apparently pay to produce excess packaging? Probably, to appear to be selling exactly the same product at the original price.

Not sure if product mass is factored into the inflation equation? I'll bet it isn't.


it's something that you notice when you buy the same product regularly - cartons of smoothies look all of a sudden a little narrower, packs of bagels contain 4 instead of 5 bagels, ice cream boxes go down from 1 litre to 900 ml
the list is endless + it's an interesting question whether inflation takes the size shrinkage into account

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Oct 28, 2016 7:36 am
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QE by the world reserve currency central bank creates excess liquidity. Feeds emerging markets leading to commodity inflation. Emerging markets whose domestic currency is pegged to the USD are forced to increase their monetary base.

http://www.forbes.com/sites/greatspeculations/2011/03/08/fed-exports-inflation-stokes-revolutions/#51f713665472

Can't see China wanting to be pegged to USD much longer

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Oct 28, 2016 12:13 pm
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So, if I read you correctly, your implication here is that central banks are using tools like quantitative easing (a modern equivalent of money printing) to intentionally raise inflation in other countries who have their local currency pegged to the dollar. You believe that is their reason for doing this, as opposed to trying to avoid local collapse in their own markets which they directly oversee... collapse which if allowed might itself spread like a contagion to other countries regardless of where they peg their currency. Correct?

Agree fully that the subtle downsizing of packaging and food material weights is an interesting topic and one that's subtly impacting millions of people like death by a thousand cuts, though I have a decidedly hard time choosing to simplistically lay fault and blame for that change at the feet of government and central banks.

IMO, the far more parsimonious explanation there rests with the free market itself. Strikes me as much more likely that companies / businesses / producers are instead implementing far more reasonable and understand steps to minimize their costs, maximize the reach of their limited raw materials, and to increase their profit margins without in turn causing an equivalent dip in consumer demand and desire for the product that would negate their efforts.

After all, put yourself in their shoes as if you were running a business that was struggling to survive and avoid being out-competed every single minute of every single day. If the majority of people will pay 2 pounds for your 10 ounce product, why offer them 15 ounces of that product at that same 2 pounds rate? If you used to do this in the past, and you realize they'll pay the same amount for less and your competitors are also offering less product for the same rate so they aren't undercutting you, why would you continue?

That approach is self-evidently flawed in a business sense, even if collaborative and kind and to be revered in a social one. Continuing to give more than you have to without altering prices just doesn't maximize your profit and is essentially a dereliction of ones business duties. Last time I checked, kindness and generosity can only in limited peripheral cases (often involving marketing and social media buzz) allow one to grow their business, hire more people, and pay their salaries. No government or central banks or currency adjustments are required here to explain this phenomenon, and attempting to introduce those things with the added implication that they're bad actors suggests you're looking for bogey men where none actually exist or are needed.

Back to the core point, do you really see such consistently nefarious motivations and believe QE was meant to encourage inflation elsewhere instead of being used to minimize the true cost of debt at home and avoid escape from recession (which if allowed would paradoxically lead to greater poverty, loss of homes, hunger, and related social ills)?

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marnixR
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Oct 28, 2016 2:47 pm
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never mind whether QE was meant to fuel inflation or not, what about the QE2 ?

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Oct 28, 2016 10:06 pm
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Unrelated to the discussion above, but very interesting. Lots of good info graphically presented at the link. Only one image included herein:


http://www.visualcapitalist.com/prices- ... ally-need/

Prices Are Skyrocketing, But Only For Things You Actually Need

Image

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Falconer360
Post  Post subject: Re: Inflation lookout thread  |  Posted: Fri Oct 28, 2016 10:48 pm
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^Having just bought a new TV a few months ago, I have seen that price drop first hand. It amazed me how much the prices had dropped for a good TV in the six years since I last had bought one.

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Oct 29, 2016 7:09 am
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It might be intentional, it might not. Either way it doesn't change the reality of what's happening; the inflation chick is coming home to roost.

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Oct 29, 2016 12:32 pm
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sorry, but that's a lame cop-out. if you believe in what you're claiming then defend it with more than insinuation and speculatively cast shade

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Oct 29, 2016 5:10 pm
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What are you on about?

Frankly in order for it to be a 'cop out' I would need to be trying to convince you of something.

I'm not trying to do that; frankly I don't care if you believe me or not.

I'm just saying, this is the way I see the world.

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Oct 29, 2016 7:05 pm
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Rory wrote:
What are you on about?

I asked you a direct question. Here it is again:

iNow wrote:
So, if I read you correctly, your implication here is that central banks are using tools like quantitative easing (a modern equivalent of money printing) to intentionally raise inflation in other countries who have their local currency pegged to the dollar. You believe that is their reason for doing this, as opposed to trying to avoid local collapse in their own markets which they directly oversee... collapse which if allowed might itself spread like a contagion to other countries regardless of where they peg their currency. Correct?

In your next reply, instead of clarifying your intended meaning you gave the weasely answer of "maybe they are, maybe they aren't, but now they'll pay the price for these transgressions" you're clearly suggesting they've engaged in. Then, when pushed, you responded with this:

Rory wrote:
frankly I don't care if you believe me or not.

I'm just saying, this is the way I see the world.

Is your intent to post here in this community and not respond to direct questions and or criticisms of your stance as required by the rules to which you agreed when creating your account? If so, I can tell you right now that's simply not gonna fly.

You've been asked to clarify your point. Will you do this now to foster mature respectful dialog and further the conversation or will you instead continue down your current path of blatantly disrespecting me and your fellow members who are interested in learning more about the way you see the world and potentially filling gaps in their own worldview?

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Rory
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Oct 29, 2016 9:08 pm
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A "direct" question that took 5 sentences... I genuinely wasn't trying to evade your question, just didn't realise you asked one.

Direct answer: no, I am not claiming that governments or central banks have conspired to intentionally export inflation.

The point you overlooked in pursuit of an answer to your direct question - it doesn't matter if it was intentional or not.

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iNow
Post  Post subject: Re: Inflation lookout thread  |  Posted: Sat Oct 29, 2016 11:15 pm
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Thank you for answering. I have to disagree with you, though. I do very much think it matters, especially if we're looking to solve it. We must properly identify root cause of an issue if we're to have any chance of making it better. I suspect we both want things to get better, yeah?

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