Are You Richer or Poorer?
Jul 2, 2014 22:57:34 #
I really like Bill Bonner's daily newsletter. He's not exactly your typical economist! :lol:
by Bill Bonner, Chairman, Bonner & Partners
Baltimore, Maryland
Tuesday, 1 July 2014
Another quarter tucked away. Another three months of addled statistics and cockamamie figures.
Are stocks expensive or cheap? How much do you earn? Is the economy growing? Are we getting richer... or poorer?
It all depends on how you measure inflation. If nominal (unadjusted for inflation) GDP is falling at a 0.8% annual rate as it did during the first quarter and if consumer prices are going up at an annual 2.1% rate as the feds say they did during the first quarter then you get an annual real (inflation-adjusted) "growth" rate of MINUS 2.9%.
Real incomes, too, depend on how you measure inflation. The median household earns less this year than it did in 2000. Today's level is about $50,000. This is said to be about 7% lower than it was 13 years ago.
"Disappointing." "Worrying." "Lackluster." These are some of the words the press has used to describe this situation. Had the numbers been more t***hful, we would have heard words like "disastrous," "catastrophic" and "oh sh*t!"
Jiggling and Jiving
But heck, we don't trust numbers... especially when we make them up ourselves. Here's Barron's with more evidence that the inflation figures lie:
There's the official inflation rate. And then there's the real one.
A new report from the American Institute for Economic Research shows how rising costs for certain necessities make many Americans' personal inflation rate much higher.
So, while the CPI is up 47% since 2000, the institute's Everyday Price Index (EPI) is up 69%. Unlike the CPI, which tracks more than 200 categories from breakfast cereal to funeral expenses, the Everyday index includes only the prices of frequently purchased goods and services.
Barron's goes on to tell us we can avoid these higher costs by not owning a house or a car... by not eating much and remaining young forever. "For aging Americans," the report continues, "it's rising health-care costs that really hurt."
Well, that does it for us. We weren't that keen on aging anyway!
Calculating consumer price increases is not as easy as it looks. Let's cut the feds some slack. Consumers' cost of living is subject to interpretation... jiggling... jiving... and outright fraud.
But our beef with the feds is not that they pretend to calculate inflation, unemployment and GDP growth correctly, it's that they believe they have some special power never demonstrated to make these things turn out better than they otherwise would.
Turning Water Into Wine
The Fed believes it can turn water into wine... and multiply the loaves and the fishes. It claims to be able to perform these miracles by manipulating the price of credit. This, as we said yesterday, is either remarkably naive... mindbogglingly stupid...
...or just plain self-serving claptrap.
Look, the feds aren't stupid. They know what they are doing. They are t***sferring money and power to themselves and their crony sidekicks.
It doesn't help the average person to understate the rise in consumer prices. The typical household knows what things cost. Underestimating the cost of living doesn't help Americans afford good and services.
Nor is helpful to overstate (by failing to adjust properly for inflation) GDP growth and incomes.
Super-low interest rates don't help the typical household, either. Households are net savers. Low rates deprive them of income while providing a bonus to big borrowers.
Who's the biggest borrower of all?
You have raced ahead of us, haven't you, dear reader? You know the feds borrow more than anyone. And you also know that unlike household borrowers the feds have no intention of ever repaying their loans.
They simply "roll over" their debt. They take on new borrowings to pay for the old borrowings. And they count on the central bank to provide much of the funding.
This is the system that has evolved over the last 100 years since the founding of the Fed in 1913. Fraudulent numbers. Jackass theories. Price fixing. Market manipulation. Bubbles. Busts. And bum outcomes.
Regards,
Bill
by Bill Bonner, Chairman, Bonner & Partners
Baltimore, Maryland
Tuesday, 1 July 2014
Another quarter tucked away. Another three months of addled statistics and cockamamie figures.
Are stocks expensive or cheap? How much do you earn? Is the economy growing? Are we getting richer... or poorer?
It all depends on how you measure inflation. If nominal (unadjusted for inflation) GDP is falling at a 0.8% annual rate as it did during the first quarter and if consumer prices are going up at an annual 2.1% rate as the feds say they did during the first quarter then you get an annual real (inflation-adjusted) "growth" rate of MINUS 2.9%.
Real incomes, too, depend on how you measure inflation. The median household earns less this year than it did in 2000. Today's level is about $50,000. This is said to be about 7% lower than it was 13 years ago.
"Disappointing." "Worrying." "Lackluster." These are some of the words the press has used to describe this situation. Had the numbers been more t***hful, we would have heard words like "disastrous," "catastrophic" and "oh sh*t!"
Jiggling and Jiving
But heck, we don't trust numbers... especially when we make them up ourselves. Here's Barron's with more evidence that the inflation figures lie:
There's the official inflation rate. And then there's the real one.
A new report from the American Institute for Economic Research shows how rising costs for certain necessities make many Americans' personal inflation rate much higher.
So, while the CPI is up 47% since 2000, the institute's Everyday Price Index (EPI) is up 69%. Unlike the CPI, which tracks more than 200 categories from breakfast cereal to funeral expenses, the Everyday index includes only the prices of frequently purchased goods and services.
Barron's goes on to tell us we can avoid these higher costs by not owning a house or a car... by not eating much and remaining young forever. "For aging Americans," the report continues, "it's rising health-care costs that really hurt."
Well, that does it for us. We weren't that keen on aging anyway!
Calculating consumer price increases is not as easy as it looks. Let's cut the feds some slack. Consumers' cost of living is subject to interpretation... jiggling... jiving... and outright fraud.
But our beef with the feds is not that they pretend to calculate inflation, unemployment and GDP growth correctly, it's that they believe they have some special power never demonstrated to make these things turn out better than they otherwise would.
Turning Water Into Wine
The Fed believes it can turn water into wine... and multiply the loaves and the fishes. It claims to be able to perform these miracles by manipulating the price of credit. This, as we said yesterday, is either remarkably naive... mindbogglingly stupid...
...or just plain self-serving claptrap.
Look, the feds aren't stupid. They know what they are doing. They are t***sferring money and power to themselves and their crony sidekicks.
It doesn't help the average person to understate the rise in consumer prices. The typical household knows what things cost. Underestimating the cost of living doesn't help Americans afford good and services.
Nor is helpful to overstate (by failing to adjust properly for inflation) GDP growth and incomes.
Super-low interest rates don't help the typical household, either. Households are net savers. Low rates deprive them of income while providing a bonus to big borrowers.
Who's the biggest borrower of all?
You have raced ahead of us, haven't you, dear reader? You know the feds borrow more than anyone. And you also know that unlike household borrowers the feds have no intention of ever repaying their loans.
They simply "roll over" their debt. They take on new borrowings to pay for the old borrowings. And they count on the central bank to provide much of the funding.
This is the system that has evolved over the last 100 years since the founding of the Fed in 1913. Fraudulent numbers. Jackass theories. Price fixing. Market manipulation. Bubbles. Busts. And bum outcomes.
Regards,
Bill
Jul 2, 2014 23:14:51 #
BigMike wrote:
I really like Bill Bonner's daily newsletter. He's... (show quote)
yes we are like cattle to them we make them money then they steal from us, they are taking our investment hell they are even stealing the money from under our mattress by devaluating the dollar giving us the bill then we have to pay them for stealing from us ,also creating inflation it like a hidden tax besides think of all the loans across the nation they are making intrest off of nothing Plus they are investing and getting they are getting the investments and the profits those SOB need to lock up and the American people need to take the wealth they have accumulated over the last 101 years!!!!!!!!!!!!!!
Jul 2, 2014 23:51:10 #
C**pdecu wrote:
yes we are like cattle to them we make them money ... (show quote)
And yet some folks defend the Fed and fiat currency. It's mind-boggling how some folks refuse to admit they're being ripped-off.
Jul 2, 2014 23:51:44 #
About the dollar.
http://useconomy.about.com/od/inflationfaq/f/value_of_a_dollar_today.htm
http://useconomy.about.com/od/inflationfaq/f/value_of_a_dollar_today.htm
C**pdecu wrote:
yes we are like cattle to them we make them money ... (show quote)
Jul 3, 2014 00:34:24 #
bmac32 wrote:
Hey thanks everybody check out the inflation calculator on this sight if you want to see how much the dollar is devaluated $1,000,000 in 2009 is the same as 1,108,990 IN 2014
Jul 3, 2014 01:22:48 #
bmac32 wrote:
Thanks for the link. This one is worth following. :thumbup:
Jul 3, 2014 08:33:20 #
Am sure you've heard, 'dollar ain't worth a plug nickel', were getting closer every day.
BigMike wrote:
Thanks for the link. This one is worth following. :thumbup:
Jul 3, 2014 16:16:08 #
bmac32 wrote:
Am sure you've heard, 'dollar ain't worth a plug nickel', were getting closer every day.
The cure is so painful neither party dares to address it. They'd much rather maintain their cushy jobs than save the nation, and they call Bergdahl a deserter!
Go back to a gold/silver standard.
Trade in all the Federal reserve notes.
Mint coin for the cash supply.
Establish a national sales tax.
Get rid of the IRS, Fed and 20 kazillion pages of tax laws.
Mine baby mine! We have a lot of recoverable gold and silver! And supposedly we have a lot in reserve.
None of the above fits in with the Oligarchy's plan of a one-world government where the few dominate the many.
Jul 3, 2014 16:46:56 #
We went back to metal 11 years ago we say to hell with the government. You'd be surprised what you can put away by putting a small part away each month. All dollars are metal, nope metal doesn't spend, makes you think before t***sferring it to dollars plus loans come at a very good rate when metal is backing the loan.
BigMike wrote:
The cure is so painful neither party dares to addr... (show quote)
Jul 3, 2014 18:52:46 #
bmac32 wrote:
thanks for that sight makes devaluation easy to explain!!!!!!!!
Jul 3, 2014 20:44:50 #
bmac32 wrote:
We went back to metal 11 years ago we say to hell with the government. You'd be surprised what you can put away by putting a small part away each month. All dollars are metal, nope metal doesn't spend, makes you think before t***sferring it to dollars plus loans come at a very good rate when metal is backing the loan.
Dollars are not metal. They are debt. And we haven't been on the type of metal standard I'm referring to since 1971. This is why the Fed can buy 75 billion in Treasury bonds every month. The economy is high on the heroin of fiat currency and the only way for it to get well again is to go through withdrawl.
Jul 3, 2014 22:09:28 #
As 'we' I mean the wife and I. All saving have been converted to metals (gold or silver), been doing so for 11 years, 14 now. Average price per ounce was $290 today it's $1321, find me any other investment that does that well without huge risks.
BigMike wrote:
Dollars are not metal. They are debt. And we haven't been on the type of metal standard I'm referring to since 1971. This is why the Fed can buy 75 billion in Treasury bonds every month. The economy is high on the heroin of fiat currency and the only way for it to get well again is to go through withdrawl.
Jul 3, 2014 22:30:31 #
bmac32 wrote:
As 'we' I mean the wife and I. All saving have been converted to metals (gold or silver), been doing so for 11 years, 14 now. Average price per ounce was $290 today it's $1321, find me any other investment that does that well without huge risks.
I'm seriously considering doing the same thing. I'd like to invest in some silver. I don't think it will get much lower than it is now, but I'm in the middle of nowhere and need to do some research before I purchase online.
Jul 3, 2014 22:44:30 #
Wh**ever you do don't take paper that says you have it. Lots of brokers that are all too willing to c***t you. Also don't go looking for the lowest price, things like certificates matter and free shipping usually isn't free. I started with silver coins, went to bars and then gold. Will never be rich but comfortable is all we really want anyway.
BigMike wrote:
I'm seriously considering doing the same thing. I'd like to invest in some silver. I don't think it will get much lower than it is now, but I'm in the middle of nowhere and need to do some research before I purchase online.
Jul 3, 2014 22:46:57 #
BigMike wrote:
I really like Bill Bonner's daily newsletter. He's... (show quote)
Ask the Republicans with their hundreds of filibusters stalemating both progress and opportunity.
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