Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: CalculatedRisk who wrote (12447)	9/28/2004 10:49:03 PM
From: mishedlo	Read Replies (1) of 116555

I find it amazing taht he and McCaully (sp) work at the same company. Their viewpoints are so divergent. Personally I think it is abusrd to not include some hedonic adjustments. If a product is better then why the F should you not pay more for it. The problems I have are this: 1) The adjustments are probably overstated 2) There should not be ANY adjustmenst to the GDP Of the two, the latter is by far and away the more serious issue. Hedonic adjustmenst look like we are growing when we are not. As far as GDP is concerned there is one and only one thing that matters IMO and that is price*volume. If MOT sold $1B in goods it is absurd to say they were worth $2B. As far as CPI is concerned if there really was an improvement then people are getting more for their money and the CPI should reflect it. I rest my case on this: Who here wants to drive a 1927 ford? Why should the cost of a Ford in 1927 be compared to the price of a Honda Accord today? The comparison is of course abusrd and to say that the price of a car has gone up 5000% or whatever it has, is of course absurd as well. Mish

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