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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: John Vosilla who wrote (53886)2/16/2006 12:13:32 AM
From: TimbaBear  Read Replies (1) of 110194
 
GST and Mish couldn't agree as to what real CPI is today anyway and neither can most of us here<g>

CPI stands for what? Consumer Price Inflation, no? How is that measured, by changes in money supply or changes in the cost(prices) of a basket of goods?

No wonder there is such room for debate: one side says supply shocks and demand shocks don't count, just changes in money supply but fail to explain how increases in money supply have in certain situations not led to inflation (see Japan for example).

The other side says that whether money supply increases or decreases is less important than watching the overall trend of prices but offers no real solution to how to mitigate the changes.

One side ignores currency strength or weakness and focuses primarily on currency volume, the other sees fiscal impacts on currency strength and concludes a change in inflationary forces is near.

Interesting debate with the industry interchanging the definitions as cited above with the CPI.

Timba
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