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

To: mishedlo who wrote (39154)	10/13/2005 4:58:50 PM
From: CalculatedRisk	Respond to of 116555

Pricing the future Oct 13th 2005 From The Economist print edition The cost of living has been increasing faster than you thought FIGURES due on October 14th are expected to show that America's 12-month rate of consumer-price inflation rose above 4% in September, to its highest since 1991. Yet in recent years, this gauge may have understated the true pace of increase in Americans' cost of living. The problem with conventional inflation measures, such as the consumer-price index (CPI), is that they measure only the prices of goods and services consumed today. But because people live for many years they also care about the prices of what they will consume tomorrow. In a new paper, Ricardo Reis, an economist at Princeton University, has attempted to calculate a “dynamic price index” (DPI) for the United States, which takes account of future as well as current prices. Unlike the CPI, it includes the prices of shares, bonds and houses. Assets are claims on future goods and services, and so asset prices reflect the price of consumption in the future relative to the present. If share or house prices rise sharply, future consumption becomes more costly, and so the cost of living increases. To illustrate his calculations, Mr Reis takes somebody approaching retirement who has a given amount of money to live on until he dies. He then calculates by how much the retirement fund must be adjusted each year to allow the person to afford the same standard of living given changing prices. Over the past three decades as a whole, Mr Reis's DPI has followed a similar downward trend to the CPI. But in recent years the gap between the two has widened. In the four years to 2004, the average annual rate of inflation according to the DPI was 7.4%, compared with an average increase of only 2.3% in the CPI. This was largely due to the rising price of homes. The true rate of increase in workers' cost of living is calculated to be just as high. Still feeling as well off as you did? economist.com

To: mishedlo who wrote (39154)	10/13/2005 5:29:06 PM
From: GuinnessGuy	Respond to of 116555

Misheldo, "I hear KnightyTin is interested in list of names. He pays top dollar too! BTW what store sells steaks for $39 lb?" LOL. There are actually two stores in that category, and both within 1.5 miles of where I live. Central Market, which is an offshoot of H.E.B., which in turn, is the largest grocery store chain in Texas. And Whole Foods Market(symbol: WFMI). Take a look what a great stock WFMI has been for its shareholders: finance.yahoo.com From that chart, you can bet that somebody has been buying that high end stuff. More than a 20 bagger(2083% return) since it went public in '92. Craig