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To: Sonki who wrote (26868)	1/4/1998 3:05:00 PM
From: hpeace	Read Replies (2) \| Respond to of 176387

Sonki, as I've stated many times. Greenspan is saying that the stats are incorrect. i.e. the CPI .they don't use that stat. they get their inflation number from Columbia organization I think. Greenspan has inflation at 1+% not 3%. The inflation number is key to the index in Soc. Ser. payments, labor contracts etc. etc. Milton Freidman just released research that if we have deflation it will not hurt but help. Don't think anyone on SI could debate him on it.. Some of the paradigm shifts that are wrong with this cpi are: 1.they don't reflect baby boomer purchasing footprint i.e. pcs etc. 2. they don't include enough services 3. they don't reflect buying habits like using coupons and shopping on days that you get double and triple coupon value. 4. they don't account for buying patterns that say " we will buy it when it's on sale and wait til them" 5. they don't factor in the Walmart effect. they have drastically lowered the price of just about everything 6. Even though the basket of goods took out buying a new house it still includes allot of the elements of that house. How many times this yr. did you buy wood<ggg>faulty basket again. 7. Fail to factor in that 30% more features may be in a month to month comparison. Take a refrigirator. they don't have the exact same refrig to compare with every month.Sooner or later the refrig gains allot of extra features. some of these features may even drastically lower total cost of ownership like saving on electricity. 8. In fact total ownwership cost can drastically be lowered since oil embargo days through technology. 9. world is still in a phase of regardless of labor component going up they cannot and will not raise prices. PRODUCTIVITY INCREASES KEEP ALLOWING LOWER AND LOWER PRICES. This de-couple the unemployment vs. inflation laws. The above is nothing new..it's part of a paper I published in the 80's. Greenspan is just saying the numbers are false and you can't count on the raw numbers anymore.

To: Sonki who wrote (26868)	1/4/1998 3:16:00 PM
From: Lee	Respond to of 176387

Sonki, Off Topic - <<What is Greenspan saying below?>> The press has, as usual, taken only the most "headline grabbing" comments by the Chairman out of context in order to sell copy. Below is the link to the entire speech. Judge for yourself if Greenspan is worrying about deflation. bog.frb.fed.us Regards, Lee