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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: TH who wrote (383)	2/21/2004 1:18:22 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

What do you think of the classic definition of inflation vs the general public view vs plungers proposal 1) rise in money supply 2) rising prices 3) rising wages In isolation #3 makes the most sense to me if forced to pick just one of the above. However 3 vs 2 makes the most overall sense to me in practical terms. I am a practical kind of guy. The classic inflation=rising money supply does not seem to cut it for any practical purpose. Ask Japan. To figure disinflation we have what. In classic terems is there even a definition? If inflation - rising money supply and deflation = falling money supply then disinflation and stagflation do not even fit the model so we have a hoge poge of crossly defined "flations" each using a different criteria (two using money supply, stagflation using rising interest rates vs growth, disinflation based on prices, and hyperinflation on rapidly rising prices). Yuck. No Wonder everyone is confused. Lets see if disinflation can fit into wages and prices. buts lets review and perhaps even simplify over my last proposal 1) inflation = prices rising faster than wages 2) deflation = prices falling faster than wages 3) disinflation = rate of change of prices is falling vs wages 4) stagflation = wages and prices in line 5) hyperinflation = rapidly rising prices vs wages 6) hpperdeflation = rapidly falling prices vs wages Hmm I am not sure these are any better. The risks of disinflation at one set of interest rates is far different than another. In a no debt situation, stagflation would seem rather nice, in a high debt situation not so nice. The real keys are wages IMO but falling wages and stagnant prices would be called inflation in the above example and I think that is wrong, and in fact rapidly falling wages vs less rapidly falling prices would be inflation and that surely is wrong. So a pure wage vs price does not cut it and my last attemt in the earlier post said it better. At any rate, I am sure that wages and job growth vs prices are what the FED is going to focus on and I see no reason wages or jobs are going up here. Also these hodge poge of terms based on unrelated things sure does not help cause it is very hard to get agreement as to what "inflation" is. Here take your pick. gggg google.com An increase in the general price level of goods and services; alternatively, a decrease in purchasing power of the dollar. www.sanrafaelvolunteers.org/Glossary%20Financial%20Detial.htm An increase in the amount of money or credit available in relation to the amount of goods or services available, which causes an increase in the general price level of goods and services. Over time, inflation reduces the purchasing power of a dollar, making it worth less. www.nmmfa.org/consumer/consGlosary_of_Terms.htm A general increase in prices of goods and services. www.morevalue.com/glossary/glossaryg-k.htm the number of dollars in circulation exceeds the amount of goods and services available for purchase; inflation results in a decrease in the dollar's value. www.hud.gov/offices/hsg/sfh/buying/glossary.cfm The average rate of increase in prices. When economists speak of inflation as an economic problem, they generally mean a persistent increase in the general price level over a period of time, resulting in a decline in a currency's purchasing power. Inflation is usually measured as a percentage increase in the consumer price index. www.fcac-acfc.gc.ca/eng/glossary.asp A rise in the prices of goods and services. www.fool.com/school/Glossary/glossaryb.htm A rate of increase in the general price level of all goods and services. (This should not be confused with increases in the prices of specific goods relative to the prices of other goods.) www.frbsf.org/publications/federalreserve/monetary/glossary.html An increase in the general level of prices. www.freddiemac.com/homebuyers/glossary.html an increase in the volume of money and credit relative to available goods and services resulting in a continuing rise in the general price level. brt.uoregon.edu/cyberschool/history/glossary.html The general price increase of goods and services in an economy. www.wdfi.org/ymm/kids/glossary/default.asp We refer to increases in the price of goods and services over time as inflation. www.tarausa.com/global/glossary.jsp The rate at which the general level of prices for goods and services is rising. Inflation has an uncanny ability to erode the value of securities that don't grow fast enough. That’s why investing only in a money market fund can be more risky than it appears on the surface. If inflation is rising at 3% a year and your money market is growing at 5% or 6%, you won’t have much money left over for your retirement. Measures of inflation include the consumer price index (CPI) and the producer price index (PPI). See "Monday Nights at Denny’s." BACK TO TOP university.smartmoney.com/glossary/index.cfm An increase in the general price level of goods and services; alternatively, a decrease in the purchasing power of a dollar www.nmac.org/tech_assistance/ta_resources/Fisc.ManagementGlossary.htm A general rise in the prices of goods and services. www.001269.com/glossary.asp The increase in the cost of living (prices for goods and services). Inflation is measured as an annual average by the CPI (Consumer Price Index.) www.dollarsandsense.com.au/index.cfm The process by which the prices of goods and services rise in terms of money. Sometimes you will read gold or silver inflation, which means that the price of goods in terms of silver rises, due to an increase in the quantity of gold or silver used as money. www.micheloud.com/FXM/MH/Glossary.htm A rise in prices of goods and services, as measured by the Consumer Price Index, which is based on a "market basket" of about 400 goods and services. Inflation can decrease the value of money. Therefore, money today is worth less than money tomorrow. www.strongkids.com/lib/dictionary.htm An increase in the general price level of goods and services; alternatively, a decrease in the purchasing power of the dollar. www.finet.com.hk/accounting/i.htm Rise in the price of goods and services that results from spending increases relative to the supply of goods. The Consumer Price Index (CPI) is commonly used as a measure of inflation. See also Consumer Price Index (CPI). www.aiminvestments.com/glossary_term/0,,1061__,00.html An increase in the amount of money or credit available relative to the amount of goods or services available. Inflation causes an increase in the general price level of goods and services. Over prolonged periods inflation can reduce the purchasing power of a dollar, making it worth less. www.easierhomeloans.com/glossary/glossary(i).htm A rise in the prices of goods and services which occurs when economic demand exceeds supply. The economy may grow so fast demand for products and services is greater than the available supply. This situation causes prices to rise. Over time, even with a relatively low inflation rate, the purchasing power of a dollar is reduced. Things cost more; your dollar buys less. www.visionfunds.net/education/glossary/general_terms.asp An increase in the cost of goods and services which, in turn, decreases the buying power of money over time. Inflation is usually measured by the Consumer Price Index and Product Price Index. www.schwab.com/SchwabNOW/ReDir/1,5348,%7C64%7C,00.html A persistent upward movement in the general price of goods and services that ordinarily results in a decline of the purchasing power of a nation's currency. Inflation resulting from government action to stimulate the economy is known as reflation. Disinflation is a downward movement of wages and prices that erases the effects of a previous round of price increases. Price inflation is most likely to set in under either one (or a combination) of the following conditions: 1) an increase in demand at a time when supply of labor is tight and industrial capacity is fully utilized; 2) a lack of congruence between increases in wage rates and increases in productivity; 3) a sharp decline in the sources of supply; and 4) a rise in money supply faster than output increases. www.indiana.edu/~ipe/glossry.html a sustained increase in the general price level www.imuna.org/manual/app_a.html The general price increase for all goods in the economy taken as a whole, expressed as an annual percentage. Also see escalation. www.bpa.gov/Corporate/KCC/defn/defnsmal/ijk.htm a general and progressive increase in prices; "in inflation everything gets more valuable except money" www.cogsci.princeton.edu/cgi-bin/webwn (cosmology) a brief exponential expansion of the universe (faster than the speed of light) postulated to have occurred shortly after the big bang www.cogsci.princeton.edu/cgi-bin/webwn lack of elegance as a consequence of being pompous and puffed up with vanity www.cogsci.princeton.edu/cgi-bin/webwn the act of filling something with air www.cogsci.princeton.edu/cgi-bin/webwn M