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

To: dybdahl who wrote (1757)	10/28/2007 7:10:59 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 71462

Being at the risk to kick off yet another inflation and economic growth discussion...one general point of inflation measure is applicability. From what I see at home and also in various posts, people are more sensitive to price hikes in sub segments but hardly see the part which hever rises in price. I never considered income tax as a cost as it is deducted at the source and money paid for tax is not seen by the consumer. Looking at important subsections of expenses (not investments) I agree that housing is an important part. For the marginal renter, rents go up by 10% a year, currently. For the continued renters, rents seem to rise with the inflation rate (t-1). Social insurance is currently one of the most underestimated ites. In 18 years the maximum social insurance payable has risen by 145%. Thats 5.1% annually and therefore two times the inflation rate, which was always between 1.6% and 3%. Wage inflation assures that more people also pay the rising amounts. When it comes to technological progress, for measuring consumer inflation, how relevant is that? Even if it is easier to buy bigger TV sets, and faster computers with more storage.. would this be deflationary because the price of a byte inch or mips is down so much? Or is it inflationary as I am now forced to buy a machine every other year when I used a machine for 5 years, like a decade ago? And then how many machines TV sets do I need? After all it used to be an average consumer, constant-utility concept. The only problem is that the average consumer does not exist, as the personal preferences change a lot over time.