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

To: Tommaso who wrote (50731)	1/22/2006 9:44:26 AM
From: shades	Respond to of 110194

The government measures of CPI are not accurate, not even including house costs and instead using rents, which have been held down as more renters bought houses. According to derivatives blog guy: Therefore a currency may be hyperinflated, and broad based inflation is not felt in goods and services, however assets inflate at a rate much greater than the increase in the money supply. We had asset inflation and loans kept the money out of general circulation - houses went way up - they had to be taken out of CPI - benson went into this with his dogfood for grandma article. The next leg perhaps money going into general circulation - then we will have inflation - general rise of goods and services prices - like zimbabwe. People go bald and give up hairdos just so they can afford food and school books for the kids. Rents will be interesting - supply will hit the market - while demand goes up from foreclosed homeowners needing somewhere to live - which force will be greater? Perhaps they balance each other out and rents dont change so much and the CPI doesn't have to be hedonically adjusted again. I sold my west palm beach real estate several months back - I made enough - no need to get greedy. Mish posted about 25 percent haircut for some homeowners in fl - OUCH. I took a lot of that money and put into vanguard consumer staples - Benson says buy inflation linked bonds - in the last depression those with money bought government bonds - they are mandated by the constitution to remain solvent - even while we let education, social programs, infrastructure decay - those things aren't mandated by the constitution eh?