This weekend Bob Brinker, perhaps after me hammering him for this for nearly 2 years, finally stated things correctly. Lest we forget how wrong he was, here is what he said.
In his April 30th, 2006 monologue, Bob Brinker said:
* "We have kept you informed what is really going on in the world of inflation, which is virtually nothing. As you know, oil prices have skyrocketed and are now setting up near all time highs in the low $70s. Oil prices literally going through the roof, and yet to the consternation of many, not listeners to Moneytalk, but to many, including, apparently, the Fed Chairman, they think oil prices are inflationary. That's because they don't understand, they don't understand the taxing effect that these higher gasoline prices have on your pocketbook. As we've discussed on the program, the vast majority of people in America today cannot even afford to fill up their gas tank. They can't put the $40, $50, $60, $70 worth into their gas tank because they don't operate on a budget like that. Sure, there are some well-heeled that can do it and not care very much about it, but the vast majority of Americans cannot even afford a $40, $50, $60, $70 fill-up on a regular basis-they just can't afford it.
It makes one wonder how much of his "model" is blind luck when he can't get the sign correct on higher prices for commodities and inflation when inflation is a part of his model.
He didn't even understand that a "taxing effect" means the effect of higher prices on inflation "lessens" the overall effect just as a tax lowers what you take home from your pay check. A tax doesn't mean you suddenly have negative income, yet this is how he's been talking for nearly two years!
If you want to trust your financial well being to someone who didn't understand this, then I guess ..... |
