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Thread: interest rates on basic savings accounts are now above the target run-rate of inflation

  1. #21

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    Quote Originally Posted by SilverStocker View Post
    Certainly I agree with all of that and I for sure would never be one to present any investment as one without risk. Surely stocks and real estate have risk, same as metals, in which I have enjoyed the ups and dealt with the downs in all. My only problem was with the way FIAT was represented in which it is being used as an example of it being such a poor investment in its own right. Fiat is really only a process in which making transactions is easy and convenient. It is really nothing more.
    I never would recommend somebody to keep huge amounts of Fiat in a bank unless we are in a deflationist period.
    The problem people have is to choose a DECENT way of keeping their hard earned savings in a SAFE and inflation protected way.
    Stocks and bonds and the value of fiat can collapse in a moment. Turks, iranians, argentinians, venezuelians, chinese and russians have experienced these trauma, it means hundreds of millions of people have seen their icecream money melting on a word of the Bully ( Europe is in the mire, so we too should take precautions ). I mean that such disasters could also hit the US and not that all paper is just paper, the value of that paper is TRUST and that layer of TRUST is getting thinner and thinner.

    I mean that Gold has IMO been, - even when we consider the recent flamboyant stock and dollarrises a safe good choice -. I am not sure that all these fancy papervalues will hold. They can vanish overnight, even three days to get your money out of a bank " paying" you 2 % might be too big a risk.

    What inflation concerns, the inflation numbers are theoretical inventions. Years ago in France there was a huge discussion on the telly between Mr Leclerc the owner of a huge walmartlike buz and the chief of the INSEE ( the institute measuring inflation ) about inflation and Mr Leclerc who had of course the numbers gathered from his company could give proof that the inflation numbers PRESENTED by the INSEE were fabricated for the purpose of wage and other social contract payment jugulation.

    In the end the INSEE man agreed, because he had to defend the honour of the INSEE doing its job in a scientific way. The end was that the government manipulated the inflation numbers like a cuckoo kicking the eggs of the birds which do not interest him out of the nest.

    We had first "inflation" numbers, then "core-inflation". Of course when little by little you oust petrol, food, rent, electricity, taxes out of the nest, and keep only chicken eggs in the basket, manipulating even the eggprice, then you come obligatorily to a convenient inflation number...

    We know exactly that a 2 percent inflation number is a gross lie and everybody knows it.
    We get the fiatvalue spanking for our own stupidity and that reality is the reason why I do not believe a single word of all what the whole fiatdefendercluster says. They are all LIARS.

    Fiat is until further only a necessary accountant number which allows you to jump into other better value-corrosion resisting stuff, whatever it might be.

    Golditiki2+++

  2. #22

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    Quote Originally Posted by golditiki2 View Post
    I never would recommend somebody to keep huge amounts of Fiat in a bank unless we are in a deflationist period.
    The problem people have is to choose a DECENT way of keeping their hard earned savings in a SAFE and inflation protected way.
    Stocks and bonds and the value of fiat can collapse in a moment. Turks, iranians, argentinians, venezuelians, chinese and russians have experienced these trauma, it means hundreds of millions of people have seen their icecream money melting on a word of the Bully ( Europe is in the mire, so we too should take precautions ). I mean that such disasters could also hit the US and not that all paper is just paper, the value of that paper is TRUST and that layer of TRUST is getting thinner and thinner.

    I mean that Gold has IMO been, - even when we consider the recent flamboyant stock and dollarrises a safe good choice -. I am not sure that all these fancy papervalues will hold. They can vanish overnight, even three days to get your money out of a bank " paying" you 2 % might be too big a risk.

    What inflation concerns, the inflation numbers are theoretical inventions. Years ago in France there was a huge discussion on the telly between Mr Leclerc the owner of a huge walmartlike buz and the chief of the INSEE ( the institute measuring inflation ) about inflation and Mr Leclerc who had of course the numbers gathered from his company could give proof that the inflation numbers PRESENTED by the INSEE were fabricated for the purpose of wage and other social contract payment jugulation.

    In the end the INSEE man agreed, because he had to defend the honour of the INSEE doing its job in a scientific way. The end was that the government manipulated the inflation numbers like a cuckoo kicking the eggs of the birds which do not interest him out of the nest.

    We had first "inflation" numbers, then "core-inflation". Of course when little by little you oust petrol, food, rent, electricity, taxes out of the nest, and keep only chicken eggs in the basket, manipulating even the eggprice, then you come obligatorily to a convenient inflation number...

    We know exactly that a 2 percent inflation number is a gross lie and everybody knows it.
    We get the fiatvalue spanking for our own stupidity and that reality is the reason why I do not believe a single word of all what the whole fiatdefendercluster says. They are all LIARS.

    Fiat is until further only a necessary accountant number which allows you to jump into other better value-corrosion resisting stuff, whatever it might be.

    Golditiki2+++
    But the reality is there are no guarantees in life. The price of gold and silver move in different directions over different timelines. If you put your money in gold or silver 5 years ago you would have been far worse off than just sticking your cash under your mattress. Gold and silver have not hedged inflation and in fact performed far worse under those periods. Conversely, as we discussed in this thread, over the last 10 years gold has out performed cash while silver has broken even and under-performed cash. What will hold true for the next 1 year, 5 years, or 10 years is anyone's guess. So while there is risk in asset classes outside of PMs, there is also risk in PMs particularly if you are using it as a medium to hold your cash as you never know when you'll need access to said cash. Falling back on gold's tendency to hedge inflation over the long run (25, 50, 100 years) is only a partial comfort as inevitably you'll need to use cash during that time and thus be subject to whatever PM prices have done recently. This is hardly a "hot take" given I'm simply saying nothing in guaranteed in life -- all we can do is make our best estimations based on the information available to us.

    "We had first "inflation" numbers, then "core-inflation". Of course when little by little you oust petrol, food, rent, electricity, taxes out of the nest, and keep only chicken eggs in the basket, manipulating even the eggprice, then you come obligatorily to a convenient inflation number...

    We know exactly that a 2 percent inflation number is a gross lie and everybody knows it."
    This really is not how it works, like at all. At least not here in the US. The BLS reports a series of inflation numbers, both your traditional inflation number and core inflation and inflation less certain items, etc. The different measures are presented equally, at the same time, and in the same disclosure. There isn't one prioritized over the other in terms of the frequency at which they are calculated and released, it's just that policy makers benchmark against certain calculations over the other. If you don't believe me, you can check for yourself. Here is the latest CPI press release & calculation: https://www.bls.gov/news.release/cpi.nr0.htm. Notice how the first item reported is CPI-U (city average prices for all goods across the entire US). From there it individual breaks out the impact of food, energy, electricity, gas and other products, such as vehicles, housing, apparel, etc. From there it provides adjusted inflation results, such as All items - food & energy. There really is no conspiracy or attempt to manipulate data or present it in an altered manner, yet for some reason people continue to false suggest that that the inflation data is stripped out of everything to the point of nothing including any meaningful data.

    The CPI read less food and energy is still relevant to us because food & energy are well-known for their volatile pricing nature, since they are subject to outside influences not always tied to monetary forces & market inflation. For example, a famine or disease outbreak could drive up food prices, weather could impact crop yields, or political tensions could cause oil embargo and tariffs and all might that drive prices higher. We wouldn't want the Fed to look at the standard inflation print during those times and surmise the economy is overheating and inflation is running rampant and respond by rapidly increasing rates and dumping a tight monetary policy on top of these supply shocks. That's why we also measure inflation less food and energy and look at inflation from different angles and consider both qualitative and quantitative impacts.

    The 2% inflation number is a target, not the exact number. The Fed will allow inflation to range slightly above and below the 2% target before it responds with meaningful monetary policy to get it back within that target area. Pretty much the only people who insist inflation is a lie is people on the internet who hold very extreme economic views. It is worth pointing out that these are usually the same people who told us all QE was going to destroy the world, hyper inflation was around the corner, the Fed wouldn't be able to raise rates, the economy would collapse, the dollar would collapse, etc. Their record largely speaks for itself, so I wouldn't give them too much of your attention.

    But even if we ignore that, if for some reason you've reached a point where you don't view the inflation data as representing anything meaningful and truly think it's all a purposeful lie and grand conspiracy, then there really isn't much one can do with that assumption as you'll just make up whatever inflation number you want to fit a predetermined narrative. It becomes impossible to reason with as inflation will be good/terrible up until the point said person subjectively decides it is no longer good/terrible.
    Last edited by Ryanferr; 11-07-2018 at 12:41 PM.
    The answers are in the data

  3. #23

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    the best way see what true inflation is, is to take the actual prices of the top 100 (by gross natio7nal reciepts) commodity, rent, fuel/energy, taxes, and consumer goods costs have been year to year for the last 10 years, then divide by ten.

    Pugh did just this and the all in AVERAGED prices have increased roughly 5.6 percent annually, Using the Govts OWN COMPILED PRICE CHARTS of actual used volume/measure compilation. For example the govt now uses the 16.3 oz peanut butter unit, at slightly more expensive now than the previous used 18 oz size(a loss of 9.5% actual product) and tries to tell us that true product volume inflation should not matter, because the "unit" cost remains the same. Decivious to the rotten core of all the govt liars in their accounting.

    Why believe numbers put out by any company that Has to cook the numbers lower or face insolvency by the true COLA mandated yearly adjustments.

    I know of no more accurate way to measure inflation AS IT DIRECTLY AFFECTS THE POCKETBOOK OF THE AVERAGE PERSON than to actually measure ALL costs that the average person has to spend.

    Any other way, that cherry picks from select banker approved sectors Is a DAMN LIE.

    I challenge anyone posting here to defend their use of a 2 percent manipulated figure as the actual inflation we should accept when the actual erosion of what the average peoples ability to purchase with a set income is shrinking by over 5 percent a year.

    A question to think about, next time a financial sector spokesperson tries to tout a govt created number. That is a classic conflict of interest created number, as the govt has a HUGE interest to artificially keep the inflation rate lower than it actually is, or face instant insolvemcy with COLA annual adjustments that bankrupt the treasury.
    Last edited by shades; 11-07-2018 at 01:55 PM.

  4. #24

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    Quote Originally Posted by shades View Post
    the best way see what true inflation is, is to take the actual prices of the top 1000 (by gross national reciepts) commodity, rent, fuel/energy, taxes, and consumer goods costs have been year to year for the last 10 years, then divide by ten.

    Pugh did just this and the all in AVERAGED prices have increased roughly 5.6 percent annually, Using the Govts OWN COMPILED PRICE CHARTS!

    I know of no more accurate way to measure inflation AS IT DIRECTLY AFFECTS THE POCKETBOOK OF THE AVERAGE PERSON than to actually measure ALL costs that the average person has to spend.

    Any other way, that cherry picks from select banker approved sectors Is a DAMN LIE.

    I challenge anyone posting here to defend their use of a 2 percent manipulated figure as the actual inflation we should accept when the actual erosion of what the average peoples ability to purchase with a set income is shrinking by over 5 percent a year.

    A question to think about, next time a financial sector spokesperson tries to tout a govt created number. That is a classic conflict of interest created number, as the govt has a HUGE interest to artificially keep the inflation rate lower than it actually is, or face instant insolvency with COLA annual adjustments that bankrupt the treasury.
    Amen Shades. They simply have to measure inflation the way they measured it before 1983
    1983 housing prices were removed from calculation
    1998 Hedonics were introduced
    1999 product substitutions were introduced

    I do not believe that inflation is as high as some say but I certainly believe it is higher than what the government states.

  5. #25

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    Quote Originally Posted by shades View Post
    the best way see what true inflation is, is to take the actual prices of the top 100 (by gross natio7nal reciepts) commodity, rent, fuel/energy, taxes, and consumer goods costs have been year to year for the last 10 years, then divide by ten.

    Pugh did just this and the all in AVERAGED prices have increased roughly 5.6 percent annually, Using the Govts OWN COMPILED PRICE CHARTS!

    I know of no more accurate way to measure inflation AS IT DIRECTLY AFFECTS THE POCKETBOOK OF THE AVERAGE PERSON than to actually measure ALL costs that the average person has to spend.

    Any other way, that cherry picks from select banker approved sectors Is a DAMN LIE.

    I challenge anyone posting here to defend their use of a 2 percent manipulated figure as the actual inflation we should accept when the actual erosion of what the average peoples ability to purchase with a set income is shrinking by over 5 percent a year.

    A question to think about, next time a financial sector spokesperson tries to tout a govt created number. That is a classic conflict of interest created number, as the govt has a HUGE interest to artificially keep the inflation rate lower than it actually is, or face instant insolvemcy with COLA annual adjustments that bankrupt the treasury.
    As a I said, there's a select minority of folk who take views such as the above. The track record of those folks largely speaks for itself. If you want to create your own reality there isn't much that can be done -- just don't be surprised when reality doesn't break in favor of what your assumptions suggested would occur.
    The answers are in the data

  6. #26

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    Really Ryan,

    what exactly is "my track record here"? So far, what you know from my posts is that I am a structurals engineer, Architect, specializing in materials analysis( regarded high enough in my field that My firm was chosen over others to analyze and quantify the post 9-11 debris fields), and a cattle rancher selling top end botique free range cattle to top cost venues. (by the way, my selling price per head is up over 30 percent from 5 years ago due to operational cost increases.... there is your 5% right there.

    Are you calling the orginazations compiling govt data that measures actual like quantities LIARS for using actual volumetric price per unit figures?

    Ok, then explain how actual square foot and amenities in new housing construction were changed to "average new housing unit. Only an imbecile would consider the increase of condos and apartmemts to be the same "value" as a sfr on its own same sized lot as the average home was built on 20 years ago. 6400sqft, as compared with 3100sqft overall average today. Yet the govt figures equivilate them as a "housing unit" Then the average interiors now being made with vastly cheaper presaboard IKEA style materials.

    20 years ago, a custom built solid wood trimmed, and no pressboard cabinets crap filled 3 bed 2000 sqft home could be built for around $115 a sqft. Today, my builder subs tell me same exact home would cost $280 to build here, so I have to either increase the cost of the home, or design an inferior home for same price as last year.

    I am directly mired in the constant increase of materials and labor costs. You, as I recall from 3 years ago, tried tp tell is tje rodocilous notion of a simgle shopping cart of food for your family that cost $100 in 2010 and then averaged $150 in 2015 was not higher than govt onflatiom numbers..... them we found put you lives on a sotuation where you don't even be the front person who buys your own consumables, so you had no first hand knowledge of actual costs of doing business or surviving, especially as your line of work has practically less than 1 percent of materials and services/labor costs attached to it(sitting in front of a computer screen every day)

    There is your True inflation. Average building costs up 243% in 20 years, makes it 12.4 percent per year.

    Refute that, I'm waiting

    I KNOW this, as I constantly do projects of this sort.
    Last edited by shades; 11-07-2018 at 02:36 PM.

  7. #27

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    Quote Originally Posted by brutus2 View Post
    Amen Shades. They simply have to measure inflation the way they measured it before 1983
    1983 housing prices were removed from calculation
    1998 Hedonics were introduced
    1999 product substitutions were introduced

    I do not believe that inflation is as high as some say but I certainly believe it is higher than what the government states.
    Rents are included in the CPI, because they are expenditures that are "consumed" in current period of time. But house prices are not, because they are expenditures on an asset to be consumed over many years. If you own a house, you will benefit from the rising prices--if and when you sell it. In a sense, houses are treated like capital goods--for consumers. That is, rising house prices are not a burden to home owners, whereas rising rents are a burden to renters. But if you have a broader concern about housing prices being ignored in general, rest easy because the government tracks a myriad of housing statistics and there are whole industries based around tracking housing pricing and trends. Simply put housing isn't ignored in totality.

    Product substitution is also logical. The formula was changed to reduce bias in the calculation to reflect the fact consumers often substitute among like-brands. The new CPI formula (aka in 1999) effectively presumes modest consumer substitution within item categories. That is, it assumes that consumers will substitute away from one brand or type of item, such as away from higher priced Ford sedans to comparable and like Toyota sedans. It does not assume, however, substitution between steak and chicken or between cars and bus fare. It would be somewhat unrealized to assume a consumer's basket of goods never changes given all the substitutes available. For example, I am not going to continue buying loaves of white Wonder Bread if Wonder Bread prices double while Sunbeam White bread prices remain the same. In such a situation the price increase in Wonder Bread could be unique to them, such as supply chain issues, and thus capturing that price change would skew the results if all comparable substitutes saw their prices unchanged.

    You can read about these impacts here: https://www.bls.gov/opub/btn/volume-...the-us-cpi.htm

    I've had these back and forths with people on these boards for years now. I explain it repeatedly but no one ever seems to want to understand. Instead we see the same myths recycled. While CPI is certainly imperfect and broad average that may not align with what we individually see in our specific consumer baskets and local geographies, it is hardly a grand conspiracy where the October print said 2.3%, but instead inflation is actually 15% and it's all a secret conspiracy. But alas people will believe what they want to believe I suppose....in some ears and out the other.
    Last edited by Ryanferr; 11-07-2018 at 02:20 PM.
    The answers are in the data

  8. #28

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    Quote Originally Posted by shades View Post
    Really Ryan,

    what exactly is "my track record here"?
    Sorry -- I wasn't talking about your specific tract record. I was talking about how there is a rather unique minority of people who have the ideology you suggested above. It's the same crowd that told us all hyper inflation was right around the corner, QE would never work and would destroy the fabrics of society, the Fed could never raise rates, gold and silver would go to the moon, the dollar would collapse, all the numbers are a conspiracy, etc. Think the Peter Schiffs and Marc Fabers of the world and naturally a lot of that stuff gets parroted here on these boards by a variety of users. Simply put none of those supposed truths have come to fruition and ultimately were all wrong, yet for some reason many still give credence to the fairy tale CPI is purposefully doctored and manipulated and it's all a conspiracy against the people.

    I understand I won't convince you that view of CPI is false and we don't have to litigate it any further, but it's getting these core building blocks incorrect that ultimately lead to disconnects down the road when reality plays out differently than many here assume it will. For reasons unknown to me a lot of people here never want to go back and revisit their core assumptions in light of the new information and as a result set themselves up for continued frustration down the road.
    Last edited by Ryanferr; 11-07-2018 at 02:31 PM.
    The answers are in the data

  9. #29

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    Quote Originally Posted by Ryanferr View Post
    Sorry -- I wasn't talking about your specific tract record. I was talking about how there is a rather unique minority of people who have the ideology you suggested above. It's the same crowd that told us all hyper inflation was right around the corner, QE would never work and would destroy the fabrics of society, the Fed could never raise rates, gold and silver would go to the moon, the dollar would collapse, all the numbers are a conspiracy, etc. Think the Peter Schiffs and Marc Fabers of the world and naturally a lot of that stuff gets parroted here on these boards by a variety of users. Simply put none of those supposed truths have come to fruition and ultimately were all wrong, yet for some reason many still give credence to the fairy tale CPI is purposefully doctored and manipulated and it's all a conspiracy against the people.

    I understand I won't convince you that view of CPI is false and we don't have to litigate it any further.
    I admire your FAITH in the works of the LIARS.

    I see how much my expenses increase year over year and remark through calculations and observations that those who make up these CPIs and other statistics are gerrymandering politically the published statistics. There is no other explanation if we come to different conclusions.

    The fact that the moneyLIARS could ward off a disaster does not mean everything is fine.
    You have now 21 trillion of debt instead. That's why those who expected hyperinflation their prognosis didn't work out: but the fact that it hasn't happened YET, doesn't mean that the spook is not in everybodies' mind. We all cross fingers.

    Inflation evaded in the prices of stocks and housing. Just read W Buffett thinks stocks are overpriced. I don't know if he really thinks so. These scribes write nowadays whatever comes to their mind, but if he really sits on 100 billion fiat and thinks so, it means he hasn't great confidence in the actiual value of stockprices. WB is somebody who appreciates richess through good work producing dividends, not through moneyspeculation.

    Of course people who only hopped in gold when it was at its peak level made a mistake, but you cannot blame gold but their wrong mindsets, like we cannot blame those who will get pinched when stocks crash. Tailriding is always a dangerous game.

    The point is that we belong to another world of belief.
    I do not believe human organisations can be honest. All empires desintegrate because little by little those who are at the helm are pushed to dishonesty, or fraudulous behaviour pushed by their wish to stay in the saddle.

    I stay with my pagan goldbelief, you can be a fiatbeliever ( it means one who IMO accepts rampant fraud will make us all nominally rich).

    Golditiki2+++

  10. #30

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    Quote Originally Posted by golditiki2 View Post
    I admire your FAITH in the works of the LIARS.

    I see how much my expenses increase year over year and remark through calculations and observations that those who make up these CPIs and other statistics are gerrymandering politically the published statistics. There is no other explanation if we come to different conclusions.

    The fact that the moneyLIARS could ward off a disaster does not mean everything is fine.
    You have now 21 trillion of debt instead. That's why those who expected hyperinflation their prognosis didn't work out: but the fact that it hasn't happened YET, doesn't mean that the spook is not in everybodies' mind. We all cross fingers.

    Inflation evaded in the prices of stocks and housing. Just read W Buffett thinks stocks are overpriced. I don't know if he really thinks so. These scribes write nowadays whatever comes to their mind, but if he really sits on 100 billion fiat and thinks so, it means he hasn't great confidence in the actiual value of stockprices. WB is somebody who appreciates richess through good work producing dividends, not through moneyspeculation.

    Of course people who only hopped in gold when it was at its peak level made a mistake, but you cannot blame gold but their wrong mindsets, like we cannot blame those who will get pinched when stocks crash. Tailriding is always a dangerous game.

    The point is that we belong to another world of belief.
    I do not believe human organisations can be honest. All empires desintegrate because little by little those who are at the helm are pushed to dishonesty, or fraudulous behaviour pushed by their wish to stay in the saddle.

    I stay with my pagan goldbelief, you can be a fiatbeliever ( it means one who IMO accepts rampant fraud will make us all nominally rich).

    Golditiki2+++
    Relying on an anecdotal approach like this opens you up to bias though. We are naturally biased to notice when prices increase, but never notice when let's say that apple we buy every other week falls in price by a few cents. It's a known cognitive bias. Secondly, we as consumers don't take measures to make sure we consistently measure the same basket of fixed goods. Our purchases change as needed and don't take a scientific approach. The formulas for CPI do.

    And again, I will remind you that CPI results measure broad averages the entire country. Your basket of goods in your town may experience price trends that differ with other locations. That doesn't mean people are lying to you, it just means your local market is seeing different pricing trends than the broader country. CPI is not a local statistic and never claimed to be one, thus it's a fallacy to suggest that because you experience different price trends that CPI is lying to you. Plus, you live in Europe while the CPI is a US statistic -- I wouldn't expect your experiences to match up.

    If the inflation data was wildly wrong then it would have been exposed by now as inflation eats into investor returns. Banks, hedge funds, lenders, and investors would all demand additional premiums to account for the fact inflation is actually far higher than the data suggests. But alas, that doesn't happen.

    As for the fact you see prices increase, well yeah, we target positive inflation so prices will certainly increase each year. That isn't really anything surprising. You should expect price increases each year, but again, that doesn't mean CPI is wrong or people are lying to you.

    None of this "evidence" being put forth by you guys is particularly compelling.
    Last edited by Ryanferr; 11-07-2018 at 03:15 PM.
    The answers are in the data

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