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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (1750)	10/27/2007 12:30:10 PM
From: RockyBalboa	Read Replies (3) \| Respond to of 71462

What? Fake inflation numbers... for example,...in Argentina: Oct. 26 (Bloomberg) -- The widespread suspicion that the government of President Nestor Kirchner has manipulated inflation data and the likelihood that his wife Cristina Fernandez de Kirchner will succeed him are transforming the Argentine bond market into a financial bloodbath. Argentina's benchmark inflation-linked bonds have tumbled 24 percent this year, making the country's debt market the worst performer in the world, according to data compiled by JPMorgan Chase & Co. and Bloomberg. Polls show that Fernandez is the front-runner to replace Kirchner in next week's elections. She rebuts claims by government statisticians that Kirchner's administration forced them to tamper with consumer price data to hide the extent of inflation. Merrill Lynch & Co., the world's biggest brokerage, estimates prices may be rising at a 17 percent annual pace, double the official rate. .... bloomberg.com Fernandez said last month she will modernize the consumer price index, swapping outdated products for newer ones. That won't be enough to restore confidence, said Tomasz Stadnik, who manages $3.1 billion of emerging-markets debt at London-based ABN Amro Asset Management Services. ``The problem is the credibility of the change,'' Stadnik said. ``INDEC has lost its credibility.'' Inflation is about double the official 8.6 percent rate, the result of a 35 percent jump in government spending this year, according to New York-based Goldman Sachs Group Inc. The rate may climb to 25 percent by year-end, Merrill Lynch says. Rate Gap

To: RockyBalboa who wrote (1750)	10/28/2007 5:15:50 AM
From: dybdahl	Read Replies (1) \| Respond to of 71462

As I said, I'm not an economist, but I have an idea that inflation is some kind of statistic that can be calculated in many ways, with different weights on different kinds of products, and that the weights used are often a bit old fashioned, focusing more on products of last year than on products of next year. How do you measure a price index on PCs? Do you look at the price of a typical PC, price/GHz or price/Gflop? What about mobile phones - does the introduction of the iPhone increase prices of typical phones, or is the iPhone regarded as "increase in supply of goods and services" relative to other phones? It was all much easier in the days where the price of wheat or the price of oil was decisive. Today, oil prices can change a lot, and many people don't change how they consume. As far as I see it, retrospective inflation indexes based on ever changing products can be used for hysteresis loops in the economic figures, providing constant economic growth without making life better for the population. There are many other problems with inflation indexes, and I'm sure that economists can pull out many books about this topic. So, what kind of inflation index should the ECB provide?