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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (21634)	11/11/2004 11:16:12 AM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Thu Nov 11 2004 09:49 trotsky (mugwump, 6:26) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved do you have a link for this? this is incredible - or rather, it is all too credible. reality has long fled the scene at the BLS, we all know that, but it becomes obvious here just to what extent it has done so. it should be clear that this always, and exclusively, concerns DOWNward adjustments. as Mr. King ( author of the King report ) has asked in connection with hedonics: how come, when 'substitution' is applied ( e.g. it is assumed that people switch to chicken, when beef is too expensive, and dog food when chicken becomes too expensive - leaving CPI unchanged regardless of which items increase in price ) , that there is no 'hedonic adjustment' for the associated LOSS IN QUALITY? note that nowadays, almost 50% of the CPI's components receive hedonic 'quality adjustments' ( quality always and exclusively increases of course ) , which is expressed as a reduction in price ( which does not in reality exist ) . the cumulative distortion in inflation, productivity and GDP data is so enormous by now that we get 'recoveries' that are in reality contractions, and are constantly served up 'productivity increases' and CPI data that require the credulity of a 3-year old to be swallowed. what's most astonishing is that in spite of the fact that even Bill Gross has by now written an extensive condemnation of this nonsense, US mainstream economists, politicians, bureaucrats and journalists all make as if these data were for real, could be discussed as if everything were perfectly normal, and form the basis for 'policy'. it's as if we were sitting around a black cloth and were earnestly debating which shade of white it is. please note: all the vacuous bluster about the 'superiority' of the debt-laden US economy stems from these data distortions. i don't know if the countries on the receiving end of criticisms by Mr. Snow ( -job ) are aware of this, but they should be. safehaven.com