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

To: bart13 who wrote (91297)	2/5/2008 5:19:25 PM
From: Keith Feral	Read Replies (1) \| Respond to of 110194

Bart, I wouldn't have to keep posting about the obvious reversal in gold prices if people like yourself didn't keep responding. LOL! I have no love or respect for gold. If we head into a recession, people are going to dump all their hard assets to pay for the lower value of the financial assets and real estate. Just because it looks safe over the past 20 years of inflation doesn't mean it will be safe in the next year of deflation. Anyways, I like these kinds of debates since I learn something from the exchanges. I'll take a look at John Williams "fine work" to see what he has to say.

To: bart13 who wrote (91297)	2/5/2008 5:58:41 PM
From: Archie Meeties	Read Replies (2) \| Respond to of 110194

Let's use John Williams argument with the BLS in a real life scenario. He argues that the BLS was in its glory days when basket of goods and services was updated every 10 years, instead of 2. Lets pretend 3 years ago a consumer could only make long distance calls through a land line. The cost of those long distance calls, if it goes up, gets reflected in the cpi. 2 years later the consumer uses VOIP to contact relatives living in Asia. The cost of his long distance calls have dropped 50%. Ok so per old BLS methodology, you'd calculate the cost of his long distance using land line costs - and you'd do that for the next 7 years!. No substitution allowed! That's masking inflation! Using a cpi basket that adjust every 2 years you'd capture the change, the choices he has in communications.