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ChrisGraley (29.75)

Obama's last moment of meaningful power...

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November 19, 2012 – Comments (81)

If 1/1/2013 comes and goes without any meaningful compromise between right and left, the alternative minimum tax will effect everyone making over $75,000. Not people making $75,000 next year, but people making $75,000 this year. This is a huge amount of voters that picked Obama that will be caught off-guard. Hardest hit will be people with large families and people counting on big mortgage deductions. 

I find it very funny that the people voting against the evil rich will find out that they are the evil rich when the tax bill comes.

The impotence of the government that will result is exactly what the country needs. Expect 4 years of nothing. This is good, because neither side really cares about us,.

Unfortunately the stock market will suffer and this is on top of the fiscal cliff scenarios everyone is talking about.

Also unfortunately, my opinion is that the impotence of the government will result in a 4 year delay of addressing market concerns.

I am personally liquidating anything that has exposure to the S&P. I am trying to make up for it by buying commodities. I expect double digit inflation for 3 out of the next 4 years. 

I was initially upset that that we had 2 extremely bad choices for  president yet again, but I think the public got it right this time. We need this kinda of pain for both sides to reinvent themselves. The people will reinvent themselves too! Maybe they will figure out that there is a better choice than right or left.

May God help us all

 

81 Comments – Post Your Own

#1) On November 19, 2012 at 7:33 PM, JakilaTheHun (99.93) wrote:

AMT is just the start of it.  About 75% of the revenue from the fiscal cliff comes from lower and middle income tax increases:

Fiscal Cliff Will Mostly Hit Middle Class

In a way, I totally agree with you Chris. Romney wasn't much better than Obama.  Even though I dread the next four years and believe it will be an economic nightmare, I'm hoping that maybe people finally begin to realize how much of a disaster that these policies are.  Then again, maybe I'm putting too much faith in the American public. 

For the record, if we do go off the fiscal cliff, my prediction is that 2013 is a terrible year for the market, but 2014 sees a rebound (more because of inflation, than becasue of good economic news.)

I'm already seeing signs of inflation in M2 data right now.  Also, if you take a look at housing price data, it's very funky.  Price increases look more like they did during the height of the bubble in 2002, than they did during the last housing recovery back in the early 90's.  I'm not totally sure what to make of it, but I think it might be an early sign of stagflation. 

But the fiscal cliff is big enough, so that it could send up back into recession and temporarily stave off inflation. But even with all the taxes in the fiscal cliff, it would still only half the deficit.  And a recession will likely result in Obama trying to increase spending yet again, thereby increasing the backdoor monetary stimulus even more. 

Ugh.  I just hope we get some sane choices for President in 2016. 

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#2) On November 19, 2012 at 7:49 PM, TheDumbMoney2 (98.59) wrote:

Meh.  I am personally ignoring all talk of the fiscal cliff and would not have clicked on your piece if that's what I thought it was about. 

The only thing in the last fourteen years the media did NOT tout beforehand as a huge crisis was the actual financial crisis, which was a crisis precisely because of its more hidden nature.  ;-)

They'll compromise, just as they did on the debt ceiling, all while everyone talks about how they never compromise.  It's only newsworthy to the extent the media hyperventilation actually causes enough people to get freaked out that there is some meaningful economic slowdown beforehand.  The Euro crisis is newsworthy.  The Fiscal Cliff is a graphically-named game of chicken.

Also, I don't see signs of inflation in M2 data right now.  I would look to actual CPI data, or the confirmatory Billion Prices Project data for inflation.  I'll eat my hat if we see inflation over 4% anytime in the next couple of years, and it would flabbergast me if we even saw it get that high.

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#3) On November 19, 2012 at 8:00 PM, NOTvuffett (< 20) wrote:

Chris, I am tired of voting for the lesser of two evils.  Maybe it is time for a third party.

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#4) On November 19, 2012 at 8:21 PM, NOTvuffett (< 20) wrote:

TheDumbMoney2 wrote "I'll eat my hat if we see inflation over 4% anytime in the next couple of years, and it would flabbergast me if we even saw it get that high.".

Ask any housewife, you know the ones- the ones that have to fuel up the minivan to take kids to school each morning, that have to buy groceries.  Ask her if the govt. statistics are correct.

 

 

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#5) On November 19, 2012 at 8:56 PM, TheDumbMoney2 (98.59) wrote:

Notvuffett, unlike you apparently, I fuel my own car.  But thanks.  Your housewife comment above is the kind of meaningless anectodatal nonsense that a politician says -- a very bad politician -- while running for city council or something.

Also, I care about data.  Data means the basis for things like gas price increases, not just the fact that gas is increasing. 

Also, where I live, gas prices have been in massive decline for a month, and before that were spiked by a refinery fire, not "inflation."  The numbers are basically right.  The Billion Prices Project independently confirms the fed's CPI calculations, largely though not perfectly.  (And the fact that it is not perfect confirmation is actually evidence of their broad correctness, given the difficulty of making the anlysis.)  Nor is there a conspiracy between MIT and the Fed.  Also, Obama did not steal the election, the moon landing was not faked, 9/11 was not an inside job, and Oliver Stone is an idiot. 

People can either choose to live in a fantasy-land of made up data, like the idiots who did unskewedpolls and attacked Nate Silver all during the election for doing math, or they can choose to live in the real world, the one with actual facts. 

The CPI attackers are the unskewedpolls of monetary policy.

Turn away from the dark side, Luke.

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#6) On November 19, 2012 at 8:57 PM, ChrisGraley (29.75) wrote:

TDM is doing the the "pretend the inflation doesn't exist" thing. Handbook page # 23.

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#7) On November 19, 2012 at 9:09 PM, ETFsRule (99.94) wrote:

"I'm already seeing signs of inflation in M2 data right now. "

Please elaborate. This is too vague of a statement to really be meaningful.

"Also, if you take a look at housing price data, it's very funky. Price increases look more like they did during the height of the bubble in 2002, than they did during the last housing recovery back in the early 90's."

Same for this. In what way is the data "funky", and in what ways do they look more like 2002?

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#8) On November 19, 2012 at 9:12 PM, ETFsRule (99.94) wrote:

"ChrisGraley (99.49) wrote:

TDM is doing the the "pretend the inflation doesn't exist" thing. Handbook page # 23."

Why do you always resort to snarky comments?

Isn't it true that the BPP is independant of the Fed's calculations?

If you disagree with what TDM said, why not give us some factual support, and explain your views on inflation like a rational adult?

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#9) On November 19, 2012 at 9:13 PM, ETFsRule (99.94) wrote:

.

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#10) On November 19, 2012 at 10:43 PM, Melaschasm (55.51) wrote:

The republicans will cave in like usual.  I am guessing the AMT fix along with a few other provisions will be included in the deal.

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#11) On November 20, 2012 at 1:15 AM, awallejr (81.55) wrote:

Since I have been pretty good on predicting on this site since March 2009, I am going to continue and say that Boehner did see the writing on the wall this last election.

There will be COMPROMISE (unlike "common ground" crap) because the people did speak. The Republicans lost ground in both House and Senate during an election they thought they would crush. They are still scratching their heads.

Chris I told you elsewhere housing has bottomed and started to improve and the recent data has supported this argument. This will add to GDP.

You can liquidate if you want, but Bernanke told you that holding cash will suck.  

 

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#12) On November 20, 2012 at 9:30 AM, ChrisGraley (29.75) wrote:

That's why I am going with commodities. Cash will continue to be devalued.

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#13) On November 20, 2012 at 10:36 AM, edwjm (99.87) wrote:

Please read this http://caps.fool.com/Blogs/the-real-fiscal-cliff/774021 for my thoughts on the Alternative Minimum Tax

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#14) On November 20, 2012 at 11:00 AM, JakilaTheHun (99.93) wrote:

Chris,

The problem with commodities is that they are more tied to China than the US (for the most part; there are exceptions).  Housing, on the other hand, will be more likely to rise if there's stagflation (see the 1970's). 

There is a secondary problem.  While I'm certain we will see stagflation, it doesn't necessarily mean that inflationary investments will be automatically good.  The problem with "stagflation" is that it's difficult to predict how much "stagnation" will offset the "inflation." 

Technically, we could have 2% inflation (which sounds reasonable) and still have stagflation if there is 1% growth.  That's what I hate about this environment.  So difficult to predict precisely how it will play out.  All I know is that it will be rotten with a combination of dimwitted tax policies, Dodd-Frank, Obamacare, and increasing regulation. 

I'm actually wondering if I should start looking towards places like Turkey, Latin America, and Africa for investments. 

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#15) On November 20, 2012 at 11:08 AM, whereaminow (20.23) wrote:

Also, Obama did not steal the election, the moon landing was not faked, 9/11 was not an inside job, and Oliver Stone is an idiot

You can always count on intelligent conversation from DumbMoney.

I'm on board with awallejr.  Despite our political differences, we have similiar views on the effect of monetary policy.  The housing market is erupting in many places around the country.  We still have a trillion and a half sitting in excess reserves.  Bernanke is annoyed (now, as opposed to 2007), that lending is not happening fast enough.

We are entering a very important boom period. This will cause even greater destruction when it crashes again (as it inevitably must).

As for price inflation, if someone can explain to me how utility can be objectively quantified, I will buy your argument that it is not a big deal right now.  

But one thing I am certain of, neither ETFsRule nor TheDumbMoney2 have the knowledge to figure out where to start with that.

So they will continue to smear and slander rather than engage in actual intellectual discussion.

David in Liberty

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#16) On November 20, 2012 at 12:37 PM, Turfscape (42.51) wrote:

>>I find it very funny that the people voting against the evil rich will find out that they are the evil rich when the tax bill comes.<<

Undoubtedly, some people...probably a small amout...will experience authentic shock with being stung by AMT. But, figuring that most estimates show about 33 million people being affected should this course continue unabated, and that about 62 million people voted for Obama and about 58 million voted for Romney, and that the tax-filing population of the U.S. is about 140 million, it can be reasoned that maybe as many as 17 million people who could be affected by the AMT also voted for President Obama.

But, out of that 12% of the tax-filing population, there will undoubtedly be a portion who truly believe that this kind of action needs to be taken to resolve budgetary issues (deficit and debt) (See Matt Damon for Exihibit A). They may truly believe that allowing AMT to affect those whose income is greater than $75,000/yr is the right thing to do.

Either way, I don't think people are really as dumb as we might make them out to be. I don't think there will be a massive movement of people who suddenly realize they were somehow "duped" into thinking that their taxes would not be impacted by this election. Some, yes. Most, no. Either they're well aware and voted for the other guy, or they're well aware and agree that it should be done, or they don't necessarily think it's that big of a deal. Those who are authentically shocked should view it as a learning opportunity.

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#17) On November 20, 2012 at 12:45 PM, Schmacko (55.25) wrote:

@ #14) "I'm actually wondering if I should start looking towards places like Turkey, Latin America, and Africa for investments. "

Chile has a lot of good ADRs on American exchanges and has boasted the most stable investment friendly economy in S.America for a while.  Colombia and Peru have some potential as well.  Stay away from Argentina as long as Kirchner is there.  Brazil has potential catalysts with the World Cup and Olympics both going there soon and has the most overall potential but they're market just seems volatile and has been rather dissappointing ever since Lula left office.

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#18) On November 20, 2012 at 12:47 PM, JakilaTheHun (99.93) wrote:

Also, I don't see signs of inflation in M2 data right now. 

Maybe you're not looking very hard.  Since around July '11, YOY increases in M2 have hovered in the 6% - 11% range, which is historically high.  That's fine for very short periods of time, but it's been going on for about two years now.   It actually bottomed at 5.8% YOY growth in August (which is still high, btw), but it's back on the rise again at 7.6% YOY growth. 

What's more is that you have to consider what that number means.  We should expect to see 7.6% YOY growth if the economy is growing 8%.  If the economy is growing 1.5% - 2.0%, on the other hand, 6% - 11% M2 growth seems extremely high. 

 

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#19) On November 20, 2012 at 12:51 PM, JakilaTheHun (99.93) wrote:

Chile has a lot of good ADRs on American exchanges and has boasted the most stable investment friendly economy in S.America for a while. 

Chile is definitely one of the best nations to invest in and frankly, has probably become more economically free than the US.  But my main concern with Chile is its high exposure to copper. 

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#20) On November 20, 2012 at 12:54 PM, ETFsRule (99.94) wrote:

"As for price inflation, if someone can explain to me how utility can be objectively quantified, I will buy your argument that it is not a big deal right now."

I do not know how utility can be objectively quantified.

Do you?

Next: please explain what this has to do with the current discussion. In my view, you are overcomplicating things. Prices simply are not increasing at a high rate right now. Therefore, inflation is low (and, clearly I have won the little bet on inflation that we made a while ago, whenever that was).

If you have some point to make about utility, then it is your responsibility to make a convincing case for your point of view. It is not enough to just throw a vague idea out there, declare yourself the winner of the discussion, and start insulting people who have a different point of view.

"But one thing I am certain of, neither ETFsRule nor TheDumbMoney2 have the knowledge to figure out where to start with that.

So they will continue to smear and slander rather than engage in actual intellectual discussion. "

I was merely responding to Chris, who was rather rude in his response to TDM. I have been perfectly civil here, and in fact have been trying to steer Chris into a more meaningful discussion, rather than hurling insults which is what he was doing.

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#21) On November 20, 2012 at 1:04 PM, buffalonate (94.22) wrote:

There is little chance they will go off the fiscal cliff.  They are planning on doing a smaller deal right now and then working on the rest of the deal in 2013.  It will be an ugly drawn out affair but congress will get things done over the next year. 

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#22) On November 20, 2012 at 1:12 PM, JakilaTheHun (99.93) wrote:

There is little chance they will go off the fiscal cliff.  They are planning on doing a smaller deal right now and then working on the rest of the deal in 2013.  It will be an ugly drawn out affair but congress will get things done over the next year. 

I'm not so sure. 

I think there's actually a reasonable chance that Obama does want the fiscal cliff.  It gives him many of the tax increases he desires, and it requires virtually no cuts in the entitlement programs. 

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#23) On November 20, 2012 at 1:40 PM, whereaminow (20.23) wrote:

ETFsRule,

Oh yeah, you're the height of civility. 

I'm directly calling you out.  You think price inflation is low. Explain to me how Geometric Mean Substitution adequately reflects ordinal utlititly rankings for consumer exchange.

Don't cry me a river about how civil you are. It's a joke and everyone knows it.  Just explain how it works and why it's valid for measuring inflation.

David in Liberty

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#24) On November 20, 2012 at 1:43 PM, ETFsRule (99.94) wrote:

"Don't cry me a river about how civil you are. It's a joke and everyone knows it."

And you should talk.

"Just explain how it works and why it's valid for measuring inflation."

It's valid because it uses price movements. Prices going up is inflation, prices going down is deflation.

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#25) On November 20, 2012 at 1:46 PM, whereaminow (20.23) wrote:

You have NO IDEA how it works.  Classic.  And so you've been on this website for 4 years+ mocking and slamming anyone who claims that inflation is higher than it appears.

Love it. 

Go study.  Learn something.  You can Google it and see what it actually does.

"It uses price movements." Yeah, that's what it does.

David in Liberty

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#26) On November 20, 2012 at 2:00 PM, ETFsRule (99.94) wrote:

lol

David, the geometric mean substitution methodology is fully explained on the BLS site. If you bothered to do any research, you would understand why it is valid. And if you had a legitimate disagreement with their explanation, you would have no problem articulating it here.

In the past, I have actually seen you resort to citing ShadowStats for inflation numbers. That just shows me how politically motivated your position is, and that is why you deserve to be mocked.

SS is a black box that just spits out whatever numbers they want - and people believe them. Disagree? Then show me their calculations and methodologies. And don't give me some nonsense about calculating inflation the way it was done in the past. Show me the actual numbers. You can't, because SS doesn't actually use any numbers or calculations to arrive at their inflation numbers.

Also: as has already been pointed out in this very discussion, the BPP's yearly inflation figure is very similar to the BLS. Think about that for a minute.

The BLS uses geometric mean substitution. The BPP does not. Yet, they consistantly arrive at very similar numbers for price inflation.

That alone should tell you that you need to re-think your objections to geometric mean substitution. But if you have some quantitative data that shows otherwise, I would love to see it.

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#27) On November 20, 2012 at 2:10 PM, whereaminow (20.23) wrote:

Nice. Change the subject to Shadow Stats.  When in trouble in a debate, try to paint the opposition as "extreme" or "conspiratorial."

You have no idea how Geometric Mean Substitution works. You have no idea what I mean when I ask you how it relates to ordinal utility rankings.

I might write a blog explaining it to you. Educating your dolt arse is not on the top of my priority list however.

David in Liberty

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#28) On November 20, 2012 at 2:19 PM, TheDumbMoney2 (98.59) wrote:

1) "Technically, we could have 2% inflation (which sounds reasonable) and still have stagflation if there is 1% growth."  That is JakilatheHun above.  He gets it.  THAT is the real risk, the above scenario, not 10+% nominal headline inflation.  (in my view)  Well put.  Everyone should read that sentence a few times.

2)  As to M2, Jakila,  I get now that you are trying to predict future inflation.  You original comment to me implied you were trying to say M2 showed evidence of actual inflation now.  It doesn't.  Nor now do I think that is what you meant to say.  You are making an argument for potential future inflation.  This is also, wrong, in my view, at least if you choose to believe the TIPS spread, which shows expected 10-year inflation at less than 2%, here.  Now, obviously the counter-argument to that is that Fed purchases of long-term bonds (and TIPS) are manipulating that expectation.  That's a discussion I would be willing to have.  But let's be sure if we want to talk about inflation expectations that we are starting from a solid foundation.

3)  The dollar is not being devalued.  Here is the U.S. Dollar index since the 2008 crisis, look at the five year view:  http://www.marketwatch.com/investing/index/dxy

Despite a lot of volatiility, the dollar is not depreciating against a basket of six major currencies.  And if you want to consider gold a currency, which to some extent it is (a proxy currency for a worldwide virtual nation-constituency of mistrust in country currencies), the U.S. Dollar has been pretty flat against that for some time now as well.  Basically, there is no risk of a real flight from dollars while the Eurozone continues to suck as much as it does.  The renminbe is rising against the dollar, but as a result of Chinese loosening of the dollar-peg, which they are likely doing because that peg has been undervaluing their currency, and, more importantly, importing our nominal inflation to China (which hurts them, particularly their consumers), which is inevitable, and which keeps the real exchange rate equalized notwithstanding their export-driven peg of the nominal exchange rate.  Now the question as to China is whether this is a long-term trend, or whether this was something they were doing in the leadup to their power transition in order to encourage social stability.

4)  I note that nobody above substantively criticizes the independent nature of the Billion Prices Project, nor how it roughly confirms the Fed's CPI data.

5)  I note that as usual, whereaminow makes ad hominem attacks on others while providing no actual data.  David, as I always like to remind you, you were making all of the exact same arguments even before I taught you about the existence and meaning of excess reserves about a year and a half ago.  Kisses, pookie.  Darn it, you have a worldview, and no matter what you see, you're gonna find a way to make sure it conforms to that view!

6)  As for me, yes, I plead guilty:  to the extent people simply refuse to accept things like CPI data, or Nate Silver's poll aggregation numbers (or that Princeton guy's, whose numbers were even better than Silver's), or the BPP, and you insist on relying on things like anecdotal quotes about housewives filling up their SUVs, and if whenever you are (inevitably) proven wrong, you then make up a conspiracy to justify why you were wrong, rather than simply accepting that your assumptions were bad and/or ideologically driven, then yes, I think you have a problem.  I just do.  I am past the point of thinking that everyone's opinions should be respected.  Some opinions suck, and are based on bad data, and if people persist in them, it is either because: a)  they are deliberately trying to fool stupid people, or b) because they are stupid, and have been fooled by a party in group a, or c) because notwithstanding the fact they are smart (as I think is actually the case here with some above), they willfully choose to remain ignorant.  I have no patience for any of it anymore.  I just don't.  If I'm wrong about something, I'm wrong, and I'll admit it, and move on.  I have in the past.  But I will not accept baseless conspiracy theories, and in case anybody is on here who has less experience dealing with those who traffic in them, I want to make sure there is a voice calling out the BS.

 

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#29) On November 20, 2012 at 2:31 PM, ETFsRule (99.94) wrote:

"Nice. Change the subject to Shadow Stats. When in trouble in a debate, try to paint the opposition as "extreme" or "conspiratorial." "

lol. I am not painting you as anything. You are extreme and conspiratorial, and you did resort to citing Shadow Stats. This is relevant because it illustrates that you are not really interested in seeing anyone defend their methodologies, or use accurate calculations. You just want to find someone, anyone, who will post a high inflation number.

If anything that I said about Shadow Stats is wrong, then please, make your case.

"You have no idea how Geometric Mean Substitution works. You have no idea what I mean when I ask you how it relates to ordinal utility rankings.

I might write a blog explaining it to you. Educating your dolt arse is not on the top of my priority list however."

David, again, you cannot win by rhetoric alone. If you have a criticism to make of Geometric Mean Substitution, you will have to make your case using statistics and mathematics. There is no other way. I understand GMS, but I am not going to write a novel for you. It is already explained in detail by the BLS.

If you believe the BLS numbers are too low, then you will have to prove it. Numbers and facts are all that matters - not your gut instinct or your indignation.

And once again, please explain: if GMS is so bad, then how could the BPP and the BLS consistantly agree with one another? The answer, of course, is that this would not be possible if the GMS method was skewing the BLS data.

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#30) On November 20, 2012 at 2:57 PM, geneticbiscuit (98.27) wrote:

@TheDumbMoney2 - I think you'll enjoy this, given your point #6 above. http://www.nature.com/nature/journal/v489/n7414/full/489170a.html

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#31) On November 20, 2012 at 3:09 PM, whereaminow (20.23) wrote:

I understand GMS, but I am not going to write a novel for you.

No novel is required.  If you had an answer, you'd just say it.  I asked you how it relates to ordinal utility.  It's not hard. Just tell us.  If you can.

For both you and DumbMoney2, it's amazing the lengths that you both will go to in order to avoid an uncomfortable question.

No 5 paragraph novels are required. No lengthy diatribes about how you have it all figured out and everyone else as a,b,c, or d.

Just answer the question. 

If you can.

David in Liberty

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#32) On November 20, 2012 at 3:13 PM, whereaminow (20.23) wrote:

genetic,

You're assuming that DM2 actually knows the mechanics (science) behind econometrics (which is not economics.)

He doesn't. Hence the appeal to authority that this 3 letter acronym is perfectly in sync with that 3 letter acronym.

None of these jokers actually know how the mechanics work and how they're flawed.  That's the beauty of this.

I realize not everyone takes the time to study the opposition's theories.  I do.  They don't. That's why they can't answer the question and why they have no idea how utility fits into the picture here.

David in Liberty

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#33) On November 20, 2012 at 3:27 PM, TheDumbMoney2 (98.59) wrote:

David,

Your questions are a rhetorical device that you consistently use in order to make yourself sound deep, while actually saying nothing that substantively undermines anything else anyone else has previously said.  It is mockably transparent.

Kisses, Pookie.

DM

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#34) On November 20, 2012 at 4:02 PM, whereaminow (20.23) wrote:

DM,

It's very sad that you can't answer such a simple question.  

I'm really not worried about how you feel about me. 

David in Liberty

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#35) On November 20, 2012 at 4:24 PM, whereaminow (20.23) wrote:

So if anybody else wants to tackle this, you are welcome to do so.  I'll assist you here.

GMS is a method by which the BLS attempts to calculate the cost of goods the consumer is purchasing.  Geometric mean itself is a simple arithemetic concept.  GM Substition, however, attempts to determine the cost of substiting some goods for other in the "basket" when prices rise (they're pretty much always rising.)

Now, if you're intuitve and knowledgeable enough about how utiltiy works and how consumers behave in a market economy, you should already see some problems here.

Or you could also assume DM2 and ETFs have it all figured out.

Up to you.

David in Liberty

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#36) On November 20, 2012 at 4:59 PM, ChrisGraley (29.75) wrote:

Etfs I tend to ignore you because you have a false omnipitence when it comes to Keynesianism. It's pretty much the only topic that you have an opinion on that is close to defendable and it's a poor one at that.

 It would be a sin to leave this out debt 1940 to 2010.

The last couple of posts I remember from you were begging people to deny that printing money was the problem and that Obama's biggest flaw was that he didn't print enough money to get us out of the problem that Keynesianism created. My kids are honestly in enough debt ETF's. They don't need any more debt created for them by the govenment on their behalf. The housing crisis was created because government had to relax lending standards to allow people to buy homes they can't afford because the values of those homes are inflated due to a weak dollar policy. My kids will work most of their lives to repay a debt made to pay my bills, not theirs.

So if I am a little snarky, you might be able to understand. I'm a little protective of you robbing the kids piggy bank.

TDM, I do agree that stagflation is probably what will happen.I said inflation, but I was talking strictly about the dollar. The reason I am pulling money out of the stock market because I fear stagflation. 

ETF's I would hope you would refrain from ever telling anyone that "they might learn something" from anything you post. They probably will, but the only thing they will learn in the end is that the policies that you cling to are totally wrong. My kids can't afford too many more people that think like you.

If it makes you feel any better, the monetarists are wrong too.

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#37) On November 20, 2012 at 5:10 PM, ChrisGraley (29.75) wrote:

TDM a gas prices link for you

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#38) On November 20, 2012 at 5:29 PM, Turfscape (42.51) wrote:

>>and that Obama's biggest flaw was that he didn't print enough money to get us out of the problem that Keynesianism created<<

Keynesian economics have never been instituted in this country. Specific policies have been put into action using Keynesian theory as justification, but even the most ardent of critics cannot reasonably say that the US has ever actually instituted Keynesian theory as its economic policy.

In short, politicians have pushed to increase spending to spur economic activity, as laid out in Keynes' theory, but the flip side of cutting spending/increasing revenue during times of economic strength don't precede or follow the spending.

Keynesian economics may be flawed, but one can't point to the state of the US economy as proof anymore than one could point to the Reagan era as proof that Austrian theory is incorrect. We're simply not very good at understanding and implementing economic theory.

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#39) On November 20, 2012 at 5:46 PM, ETFsRule (99.94) wrote:

"Your questions are a rhetorical device that you consistently use in order to make yourself sound deep, while actually saying nothing that substantively undermines anything else anyone else has previously said. It is mockably transparent."

Agreed. When David has no answer, he responds by answering a question with a question. Because he has nothing else to say.

"Etfs I tend to ignore you because you have a false omnipitence when it comes to Keynesianism. It's pretty much the only topic that you have an opinion on that is close to defendable and it's a poor one at that."

Chris,

I tend to ignore you because you simply express your opinions with no concerns for facts and data. I remember once you tried to argue that the warming of the Earth was caused by solar flares. When I pressed you to provide factual support for this theory, you basically just kept responding with insults, and ultimately left the discussion without any real support, or debate, of the topic.

This approach leaves you open to people like Sarah Palin, George W Bush, and David, who make arguments "from their gut". David tries to hide behind his weird philosophies, but he is really no different from Michele Bachmann, Glenn Beck, or any of the others.

"The last couple of posts I remember from you were begging people to deny that printing money was the problem and that Obama's biggest flaw was that he didn't print enough money to get us out of the problem that Keynesianism created."

Perhaps you should have tried paying attention instead of ignoring what I said.

I am just as concerned with the debt as you are - probably more. The difference between us is that I take an analytical approach to the problem rather than an emotional approach.

Look at your graph of the national debt. It provides a perfect contrast between the Keynesian period (around 1945-1975) and the period after Keynesianism became unpopular (around 1975-present).

I work hard for my money, and I do not want to be left with debt from non-Keynesian "conservatives" like you, who think they can just spend whatever they want, and grow the debt like crazy with no regard for the long-term consequences.

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#40) On November 20, 2012 at 5:46 PM, ETFsRule (99.94) wrote:

.

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#41) On November 20, 2012 at 5:50 PM, ChrisGraley (29.75) wrote:

#38) On November 20, 2012 at 5:29 PM, Turfscape (48.31) wrote:

Keynesian economics have never been instituted in this country.

In short, politicians have pushed to increase spending to spur economic activity, as laid out in Keynes' theory, but the flip side of cutting spending/increasing revenue during times of economic strength don't precede or follow the spending. 

I would agree with that. But I would say that is the major flaw in both Keynesianism and Monetarianism. You just can't count on any politician to allow austerity.

Keynesian economics may be flawed, but one can't point to the state of the US economy as proof anymore than one could point to the Reagan era as proof that Austrian theory is incorrect. 

If Reagan is a freakin Austrian, I am Mother Theresa! Reagan is about Monetarist as a Monetarist can get. Even ETF's would probably agree with that. I get your point, but the only 2 things we have tried are Keynes and Monetarism and we have proven that we aren't capable of making it work. Austrian economics does not ask us to make up for earlier indulgences. It's quite possible that trying it once might be a good idea.

 

 

 

 

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#42) On November 20, 2012 at 5:52 PM, whereaminow (20.23) wrote:

I've been accused of a lot of things, but I don't think anyone would agree that I've run out of things to say.

I am amazed, however, that you keep coming back here and writing so many words without addressing the question I posed.

I'll make it even easier. 

Is utility objectively quantifiable?

David in Liberty

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#43) On November 20, 2012 at 5:58 PM, JakilaTheHun (99.93) wrote:

Keynesian economics may be flawed, but one can't point to the state of the US economy as proof anymore than one could point to the Reagan era as proof that Austrian theory is incorrect. We're simply not very good at understanding and implementing economic theory.

Not sure why you use Reagan as an example of "Austrian theory", because Reagan is probably the President with the most legitimate claim of implementing Keynesian economic policies. In order to fight an economic downturn, Reagan lowered taxes and increased spending.  That's textbook Keynes. 

But the real reason that Keynesian economics (or at least, Keynesian fiscal policies, which is what people normally mean by "Keynesian economic theory") has not been "instituted" on a grand scale is because the entire theory has a majorly flawed assumption. 

Keynesian theory assumes that government officials are somehow above self-interest and hence, have superior insight into boom and bust cycles that the private sector lacks.  But the truth is that government officials are no more wise, benevolent, or enlightened than the rest of us.  Indeed, they are probably less so. 

Why Keynesian Spending Policies Do Not Work In Reality

In reality, government officials tend to excerabate natural economic cycles, rather than moderate them.  The US banking system is a great example. 

When the boom was on, the regulators were basically saying "EVERYTHING GOES!" and adding fuel to the fire, even ignoring the regulatory standards put into place.  When the boom turned to bust, then suddenly, the regulators started putting the brakes on everything, even though the brakes were already on. 

The problem is that bureaucrats really don't know any more than market participants, and they normally know significantly less.  That means they make decisions based on "animal spirits" or emotions even more so than market participants do.

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#44) On November 20, 2012 at 6:03 PM, ETFsRule (99.94) wrote:

"GMS is a method by which the BLS attempts to calculate the cost of goods the consumer is purchasing. Geometric mean itself is a simple arithemetic concept. "

Correct.

"GM Substition, however, attempts to determine the cost of substiting some goods for other in the "basket" when prices rise (they're pretty much always rising.)"

False.

David, if you want to really understand this topic, the BLS has plenty of information on their site.

http://www.bls.gov/cpi/cpiqa.htm

I will give a quick explanation, in case anyone with an open mind is actually reading this.

If filet mignon rises by 5%, but ground beef only rises by 4%, then a certain amount of people will switch from filet mignon to ground beef.

However, the opposite is also true: if ground beef goes up by 5%, but filet mignon only rises by 4%, then there will be a certain amount of people who switch in the opposite direction. Filet mignon is still more expensive than ground beef, but in this case the difference in price has been reduced. As a result, consumer's preferences will change. Preferences can also change for other reasons (not just price) - reasons like quality, etc.

The BLS method is a model of what people are actually buying. It does not assume that people are always switching to cheaper products.

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#45) On November 20, 2012 at 6:13 PM, whereaminow (20.23) wrote:

ETFs,

Baby steps.

then a certain amount of people will switch from filet mignon to ground beef.

The economic law that determines whether people will switch from filet mignon to another item is called The Law of Marginal Utility.

Considering that utility is not objective quantifiable, how many people will switch from filet to gb?

David in Liberty

 

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#46) On November 20, 2012 at 6:21 PM, awallejr (81.55) wrote:

I'm on board with awallejr.

Man I shot hot coffee thru my nostrils when I read that.  Let me tell you it hurt.

I kind of feel relieved that at least for this thread I am not the subject of ire;)

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#47) On November 20, 2012 at 6:32 PM, ChrisGraley (29.75) wrote:

#39) On November 20, 2012 at 5:46 PM, ETFsRule (99.88) wrote:

 I tend to ignore you because you simply express your opinions with no concerns for facts and data. I remember once you tried to argue that the warming of the Earth was caused by solar flares. When I pressed you to provide factual support for this theory, you basically just kept responding with insults, and ultimately left the discussion without any real support, or debate, of the topic.

This approach leaves you open to people like Sarah Palin, George W Bush, and David, who make arguments "from their gut". David tries to hide behind his weird philosophies, but he is really no different from Michele Bachmann, Glenn Beck, or any of the others. 

ETF's you are in no place to argue that someone else ever argues without the support of facts. I have never seen you post one fact in any of your posts. Maybe a graph or chart from some liberal website but you don't even back that up with a solid opinion.

I specifically remember arguing with you about climate change and I do believe that the answer I gave you about why it is getting hotter is because "It has been getting hotter since the last Ice Age." That was met with the message board version of a glassy stare. I do remember telling you that we have more proven data of solar flares influencing climate than we do for Carbon.  Again arguments without digesting what I said. I also remember you pressing me to explain why Icebergs were melting. I said, in the north it was hotter, but in the south icebergs were growing. Again nothing from your end. You kept pressing me, but gave nothing of your own to suggest it was not the way I said it was. Which like I said, is pretty much why I ignore your posts.

The fact that you don't understand that I am the opposite of being open to someone like Bush 2, Palin, Bachmann or Beck just proves that you aren't listening to anything that I am saying. You are out to prove a point, without being equipped enough to do it. 

The difference between us is that I take an analytical approach to the problem rather than an emotional approach. 

No you don't. If you looked at the graph and are old enough to remember 1972. You would see the same thing now that we saw then. We are facing stagflation. We are hitting that point for the same reason. There is only so much money that you can print when you avoid every other concern. 

I work hard for my money, and I do not want to be left with debt from non-Keynesian "conservatives" like you, who think they can just spend whatever they want, and grow the debt like crazy with no regard for the long-term consequences. 

I understand that you are upset and you had to call me the dirtiest word you can think of in a liberal persective which is "conservative" but you should really just scroll up to the top.

The difference between a liberal and conservative in this country is that while both sides will spend as much as they can, liberals will spend more and try to pay for it later by taxing the rich and conservatives will do the same and try to pay for it later by taxing the poor. 

The middle class is rich or poor depending on who needs the tax money. 

You are honestly as bad as they are. You can pretend to have my kids interests in mind, but you are in favor of putting them into more debt. 

 

 

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#48) On November 20, 2012 at 6:36 PM, ChrisGraley (29.75) wrote:

lol awallejr,

I don't agree with your politics, but i think we have always been civil. Are you really the object of ire?

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#49) On November 20, 2012 at 6:57 PM, ETFsRule (99.94) wrote:

"Considering that utility is not objective quantifiable, how many people will switch from filet to gb?"

That's easy. You can observe how many people have bought each product. The CPI isn't predictive; it is a measurement of what has already happened.

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#50) On November 20, 2012 at 7:01 PM, ChrisGraley (29.75) wrote:

It's actually not that easy. He asked "How many people will switch?"

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#51) On November 20, 2012 at 7:01 PM, whereaminow (20.23) wrote:

No its not. It's the Geometric Mean, not an observation of what took place. The GM is the econometrician's way of guessing (and it is just a guess) how many people bought one good versus another. 

If they had observed it, then they would know exactly. Hence, the employment of a model.

You really don't understand how this works.

David in Liberty 

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#52) On November 20, 2012 at 7:04 PM, ETFsRule (99.94) wrote:

"I specifically remember arguing with you about climate change and I do believe that the answer I gave you about why it is getting hotter is because "It has been getting hotter since the last Ice Age." That was met with the message board version of a glassy stare. I do remember telling you that we have more proven data of solar flares influencing climate than we do for Carbon. Again arguments without digesting what I said. I also remember you pressing me to explain why Icebergs were melting. I said, in the north it was hotter, but in the south icebergs were growing. Again nothing from your end. You kept pressing me, but gave nothing of your own to suggest it was not the way I said it was. Which like I said, is pretty much why I ignore your posts."

Chris, now you are simply lying and you know it. Go dig up the conversation and tell me who posted more facts and statistics to support their position. Count the number of facts, and tell me who posted more.

Did I fail to respond to your solar flare theory? Or did I simply ask you to provide factual support for it? Hmm - might want to check on that too.

Did I not post factual data regarding total ice extent of the Earth? It is true that the ice caps are melting in the northern hemisphere, while they are also growing in size in the southern hemisphere. That is why, as I explained in that discussion, it is important to look at the total amount of ice on the Earth - which decreasing. This was all explained to you and supported with the relevant facts and data.

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#53) On November 20, 2012 at 7:07 PM, ChrisGraley (29.75) wrote:

ETF's it is getting hotter. 

I explained this. 

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#54) On November 20, 2012 at 7:11 PM, ChrisGraley (29.75) wrote:

ETF's are you going to ignore the rest of my last post?

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#55) On November 20, 2012 at 7:17 PM, TheDumbMoney2 (98.59) wrote:

Chris,

Thank you for your gas chart.

1)  Obama took office while the greatest deflationary financial crisis since the Great Depression, and yes, prices are up since he took office.  Here is a longer term chart going back to 2007, showing there has, net, been less than zero increase in gas prices since the last peak in 2008.  And in fact in California where I live I even remember paying more for gas in 2008.  We are still below that peak, four years later, notwithstanding all of the QEs, etc.  (Now if you go back to 2000, you see a much more significant increase, from about 1998 through 2008.)  Are you focusing therefore on the "starts with Obama" chart you linked to because: a) you are genuinely fooled by the lack of context in that chart; b) you seek to fool others for ideological reasons; or c) you genuinely believe for some other reason unknown to me that the price of gas prior to January 2009 is completely irrelevant?  I seriously would like to know, because it has to be one of those three options.

2) Gas prices are only one component of CPI.  I'm sure you know that.  By contrast, the rental value of homes (another component of CPI) has gone down since Obama took office.  Naturally the Case-Shiller home price index does not perfectly track the rental value of homes, but it is indicative.  There are many components of CPI, of which gas is only one, and not all of them have trended up in the same way since Obama took office.  Other short-term spikes, such as the one in corn in June/July 2012, are more logically attributable to drought, as has also been widely reported.  There are skads of other inputs to CPI as well.

3) And that's not even to talk about geopolitical issues, refinery fires and perceived or real shortages, closures in the Gulf, increased regulation under the Obama administration, Hurricane Sandy, etc., etc. and the effect on certain prices both up and down.

So in conclusion, I'm not sure what the mere price of gas since January 2013 alone (whether in chart form, or in the form of an anecdote of a soccer mom filling up her SUV while in possession of a specialized form of human memory that only begins on that date) says or is meant to say about either the validity of the CPI measurements, which take it into account, or policies of Obama or Bernanke since that time.

Best,

DM

 

 

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#56) On November 20, 2012 at 7:21 PM, ETFsRule (99.94) wrote:

"ETF's it is getting hotter.

I explained this."

That's a response? Seriously? Why not just admit that you were wrong, and that I did in fact respond to your point about solar flares, and that I did in fact post facts to support my position?

"ETF's are you going to ignore the rest of my last post?"

Ok I will respond.

"No you don't. If you looked at the graph and are old enough to remember 1972. You would see the same thing now that we saw then. We are facing stagflation. We are hitting that point for the same reason. There is only so much money that you can print when you avoid every other concern."

You're entitled to make whatever prediction you want. We'll see what happens. I personally do not predict stagflation.

"I understand that you are upset and you had to call me the dirtiest word you can think of in a liberal persective which is "conservative" but you should really just scroll up to the top.

The difference between a liberal and conservative in this country is that while both sides will spend as much as they can, liberals will spend more and try to pay for it later by taxing the rich and conservatives will do the same and try to pay for it later by taxing the poor.

The middle class is rich or poor depending on who needs the tax money.

You are honestly as bad as they are. You can pretend to have my kids interests in mind, but you are in favor of putting them into more debt. "

What kind of response do you really expect? You are just insulting people without any basis whatsoever. Hence my comment about you being a conservative wanting to drown us in debt.

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#57) On November 20, 2012 at 7:28 PM, whereaminow (20.23) wrote:

It's a beautiful late afternoon in socal, so i will wrap this up. 

GMS assumes that for every substitution the percentage of consumers who switch from one product to another will be the geometric mean of the price changes.

If you're an economist and not an econometrician, you know that this is impossible and impossible to even know. GMS is a guess with no basis in reality. Utility is no more subject to exact quantifiable measurements as is happiness.

I bring this up because although the housewife example is anecdotal, at least it is reality, whereas price level measurements have no basis in reality.

I know its upsetting to have no super stat like Win Shares or DVOA to tell us more about the economy. But that doesnt excuse people for blindly following the ones in use as if they were gospel. Price level suffer from many fundamental flaws, including the one discussed here. 

Have a great Thanksgiving all.

David in Liberty 

 

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#58) On November 20, 2012 at 7:39 PM, ETFsRule (99.94) wrote:

"No its not. It's the Geometric Mean, not an observation of what took place. The GM is the econometrician's way of guessing (and it is just a guess) how many people bought one good versus another.

If they had observed it, then they would know exactly. Hence, the employment of a model.

You really don't understand how this works."

David: you have no idea what you're talking about. That's why you are trying to go around in circles. The key point of this entire discussion is that the BPP independently proves that GMS is not causing any problems in the BLS data.

The CPI uses observations of "categories". Not broad categories. Very narrow categories. They know the amount of steaks that are bought, the number of ice cream cones, etc. And that is how they assign a "weight" to that category in the CPI calculation.

They do not observe the specific brands that are bought in each category. And they never have - which is why the previous methods are not superior to the geometric mean method. Any implication that the prior methods were superior, is simply untrue and completely unfounded.

The geometric mean model reduces the substitution effect. That is the whole point; they use it to reduce the substitution effect. So if you want to go back to the older methods, then you are the one who actually wants them to start guessing what brands of clothing people are buying.

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#59) On November 20, 2012 at 7:48 PM, ETFsRule (99.94) wrote:

"I know its upsetting to have no super stat like Win Shares or DVOA to tell us more about the economy. But that doesnt excuse people for blindly following the ones in use as if they were gospel. Price level suffer from many fundamental flaws, including the one discussed here. "

That is so cute David. After wasting all this time, you finally respond, and then promptly head for the door.

The BPP does not use a geometric mean. It simply measures prices over time for transactions of the exact same product. Its results are nearly identical to the BLS data.

No one accepts the BLS as gospel. It is true that any model could potentially cause errors. That is why it should be compared with independant sources such as the BPP.

And once again, you are the one who relies on sites like Shadow Stats. You pretend to be concerned with every excrutiating detail of the BLS methodology - yet you take Shadow Stats at face value, with no skepticism whatsoever. SS is a black box that discloses nothing at all. Therefore, your criticism of the BLS is obviously biased and is not an argument made in good faith.

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#60) On November 20, 2012 at 7:49 PM, ETFsRule (99.94) wrote:

.

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#61) On November 20, 2012 at 7:54 PM, ChrisGraley (29.75) wrote:

That was a well thought out but totally flawed staement DM.

I do agree that CPI measures many other things besides gasoline, but would argue that it's basically designed to make things better than they usually are. That's not a knock on this administration. It's been that way as long as politicians have figured out how to cover their keisters. 

I could pick out other things in the CPI but I'd really like to talk about gas more. A favorite statement of the liberals is that the President has no control over the current gas price. Zero. None.

Well, every single oil refiner pays an EPA fine for not blending gas with cellulosic ethanol. They have been paying that fine since Obama's first year. The problem is that cellulosic ethanol doesn't exist. It's never existed. Now, I have heard from liberals that it works as a tax and an incentive to get oil companies involved to make this happen. I could agree to that thought process to a point. The truth is even in a booming economy, I would probably disagree. The government is trying to influence companies to invest in something that may never exist. They are trying to influence morals the same way that conservatives try to influence religous morals. It's wrong on principle.

Now, let me get back on topic. The above argument would have been my only argument in a booming economy. We aren't even close to that. BP is not paying the fine for the non-existent fuel, but the guy filling up his Chevy Nova is. The guy that probably won't get a job for the next 4 years is. So when you look at that chart and think about outside influences on gas prices, think of something that is controllable and could help our economy. I would normally argue from a moral standpoint, but now I find it insane that it's not being argued from an economic standpoint. 

Most people find their dogma to be more important than right or wrong or surviving. 

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#62) On November 20, 2012 at 8:13 PM, ChrisGraley (29.75) wrote:

#56) On November 20, 2012 at 7:21 PM, ETFsRule (99.88) wrote:

 "ETF's it is getting hotter.I explained this."

That's a response? Seriously? Why not just admit that you were wrong, and that I did in fact respond to your point about solar flares, and that I did in fact post facts to support my position?

Yes dammit yes! It's the same freaking glassy stare! It's getting hotter! It's been getting hotter and it will freakin keep getting hotter until it starts getiing colder and we start into the next Ice Age! This is something you should have learned in about the 4th grade! If you are shocked by this, I honestly can't help you. Carbon has nothing to do with the same cycle that has happened over and over again since before man was on the Earth! Actually both man and oil does have an effect, but I can't get you past this simple point to even begin to talk about that. 

My answer to your touche moment of "why is there a net loss of ice?" is the same! It is freakin getting hotter! It will keep getting hotter. I am not arguing that it is not getting hotter! Do you understand the freaking words coming out of my mouth!?! 

Let's get past this and I will address the rest of your post. 

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#63) On November 20, 2012 at 8:13 PM, TheDumbMoney2 (98.59) wrote:

Chris,

I don't consider myself a stupid person.  But it seems to me your comment #61 calls my statement "totally flawed," yet then, as far as I can honestly tell, talks about a bunch of things that are simply not at relevant to actually demonstrating why the particular point I was making was flawed. 

It seems you even acknowledge this when you say, in paragraph 4 (!), "[n]ow, let me get back on topic," but then everything that follows is again (as far as I can tell) not relevant to my point, which is a limited point:  Your gas chart proves absolutely nothing about the quality of CPI nor Obama's or Bernanke's policies.  (Though admitedly, paragraph 3 was particularly off-topic.)

In your mind, do you think you refuted my limited point about the gas chart?  Or are you executing a rhetorical center peel manuever and deliberately falling back on your more generalized attack on CPI, as well as giving additional non-monetary-policy-related reasons why gas prices change (which supports my point -- in fact, I too mentioned Obama regulations), while feigning an ongoing attack on my rhetorical gas argument troops?  Because honestly, that's how I read #61.

Best,

DM

 

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#64) On November 20, 2012 at 8:37 PM, ETFsRule (99.94) wrote:

"Yes dammit yes! It's the same freaking glassy stare! It's getting hotter! It's been getting hotter and it will freakin keep getting hotter until it starts getiing colder and we start into the next Ice Age! This is something you should have learned in about the 4th grade! If you are shocked by this, I honestly can't help you."

Chris, I agree that the long-term trend is hotter between ice ages, then colder. Yes, this is all incredibly obvious. I have never disagreed with you on this point, ever.

"Carbon has nothing to do with the same cycle that has happened over and over again since before man was on the Earth! Actually both man and oil does have an effect, but I can't get you past this simple point to even begin to talk about that. "

Chris, this was never the point that we were debating. It's true, of course, that there is a very long-term heating and cooling cycle. This does not prove one way or another that man is or is not causing *additional* global warming. If you are willing to admit that man and oil each play a role, then that is good enough for me.

Climate debate over?

"My answer to your touche moment of "why is there a net loss of ice?" is the same! It is freakin getting hotter! It will keep getting hotter. I am not arguing that it is not getting hotter! Do you understand the freaking words coming out of my mouth!?! "

Ok, I'm glad you agree that the ice is melting on a global basis. Because earlier you kept pointing to the southern hemisphere in isolation, which seemed to be some kind of argument that the ice wasn't really melting, or that the Earth wasn't really heating, or something. I don't know why you made that argument, it made no sense to me at the time. But now you are making a lot more sense.

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#65) On November 20, 2012 at 8:37 PM, ETFsRule (99.94) wrote:

.

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#66) On November 20, 2012 at 9:14 PM, ChrisGraley (29.75) wrote:

#64) On November 20, 2012 at 8:37 PM, ETFsRule (99.88) wrote:

Chris, this was never the point that we were debating. It's true, of course, that there is a very long-term heating and cooling cycle. This does not prove one way or another that man is or is not causing *additional* global warming. If you are willing to admit that man and oil each play a role, then that is good enough for me. 

Thank you!

It's not at all what you want to here. Just go tell your friends that global warming is caused by man and oil.

They might elect you hero.

You won't understand why, but you didn't when you voted either.

Just you and your friends keep telling eachother how you are the good people and the good people don't have to be that smart. 

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#67) On November 21, 2012 at 12:19 AM, awallejr (81.55) wrote:

Lol this thread has now transformed into talking about global warming, one of the few areas Chris and I agree on heheh.

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#68) On November 21, 2012 at 10:31 AM, Turfscape (42.51) wrote:

>>Not sure why you use Reagan as an example of "Austrian theory", because Reagan is probably the President with the most legitimate claim of implementing Keynesian economic policies. In order to fight an economic downturn, Reagan lowered taxes and increased spending.  That's textbook Keynes. <<

Please don't misunderstand...I definitely do not hold Reagan up as an example of Austrian policy. Rather, I aimed to make the point that modern conservatives have a strong tendency to espouse Libertarian rhetoric while following policies that are antithetical to what they say. How many times has Reagan been held up by the modern right as a champion of the free market? How many times has he (and by extension free market policy/deregulation) been demonized by the modern left for creating a wider gap between rich and poor?

It's yet another example of how delusional both sides really are in their beliefs about political party and fiscal policy.

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#69) On November 22, 2012 at 2:08 AM, NOTvuffett (< 20) wrote:

When I made the statement about the housewives, I knew it would be seen as anecdotal.  If I had the time, inclination or money to waste to conduct a survey like that, what do you think the results would be?

whereaminow made a cogent point that is probably so subtle that it eludes many fools.  There is no way to objectively measure the value of goods.  By definition, the free market is driven by the subjective value of goods and services. 

Anyway, I wish you all a happy Turkey Day.

Oh, P.S., I have been telling everybody that after the kids eat the turkey, I will tell them that is the carcass of Big-Bird, lol. 

 

 

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#70) On November 23, 2012 at 11:39 AM, whereaminow (20.23) wrote:

So DumbMoney2 wrote something I glossed over, but I just have to address because it's way too ironic:

Some opinions suck, and are based on bad data, and if people persist in them, 

And then he goes on his little rant about what type of person doesn't agree with him.

This is coming from a guy that:

1. Believes defllation causes depressions, despite the fact that the most encompassing empirical study ever done on the subject showed no link.

2. Believed that gold would drop in price and has been telling everyone that since at least 2008, when gold was $850

3. Believed that deflation was the great threat of the last 3 years, and has never admitted to being incorrect on this call, despite all price index measurements rising almost the entire time.

So... if this sorry t*rd would ever look in the mirror instead of blowing weird kisses our way, maybe he'd learn something.  Doubtful, but maybe.

David in Liberty

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#71) On November 23, 2012 at 11:25 PM, whereaminow (20.23) wrote:

ETFs,

The reason we go in circles is because you cannot answer the crticism I posed.

I made one simple statement. Econometricians cannot know how many consumers switch NO MATTER HOW NARROW OR BROAD THEY DEFINE THE CATEORY. IT DOES NOT MATTER.

Sorry to all caps you, but u dont get it. U keep implying that observations were made. None have been. None wver have. No one freaking knows or can know. Thats the point of substition modeling.

You continue to pretend these measurements are based on reality and onservation. They are not. The BPP is also not perfect. Besides the Appeal to Authority you engage in when u reference it to prove the cpi's correctness.

The weights are not based on observation. You are simply naive and kinda stupid to think so. Only human action reveals preferences. Shucks, i havent seen any Fed economists at my local grocery store. Have you?

Utility is not subject to exact measurements. By its very nature neither you nor any econometrician will EVER know how price changes will impact human value scales beyond the simplest implication that ranks will move up and down. But by how much can never be known.

You will not address this criticism because you cannot.

David in Liberty 

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#72) On November 24, 2012 at 9:30 AM, ETFsRule (99.94) wrote:

"Sorry to all caps you, but u dont get it. U keep implying that observations were made. None have been. None wver have. No one freaking knows or can know. Thats the point of substition modeling. "

Nonsense. Have you learned nothing from Nate Silver about representative sampling? He didn't have polling data on every single person in the world, yet his predictions were accurate in all 50 states.

The BLS does, of course, use observations - in the form of data collected by the Consumer Expenditure Survey. How could you not know that?

"The BPP is also not perfect. Besides the Appeal to Authority you engage in when u reference it to prove the cpi's correctness."

Another nonsense argument. Nothing is "perfect", David. And I have made no argument from authority.

If you have a more meaningful critique to make of the BPP, this would probably be a good time to present it.

My argument is that the BPP is statistically relevant, because it includes many thousands of data points, collected independently, and using entirely different methods from the BLS.

There are no coincidences - especially when talking about such large sample sizes. Therefore, the strong similarities between the two inflation numbers are almost certainly meaningful.

Of course, the BPP is not the only way to verify this - it is just the most convenient. You could make a legitimate argument using other, independent sources of price changes, such as industry publications. But you will never do this because you don't care about finding the truth.

"Utility is not subject to exact measurements. By its very nature neither you nor any econometrician will EVER know how price changes will impact human value scales beyond the simplest implication that ranks will move up and down. But by how much can never be known."

Yes David, you can try to cast doubt using these silly philosophical arguments. Maybe a toothbrush is less useful today than it was a week ago - but I doubt it.

There is no evidence that inflation is understated by the BLS.

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#73) On November 27, 2012 at 3:54 PM, whereaminow (20.23) wrote:

The BLS does, of course, use observations - in the form of data collected by the Consumer Expenditure Survey. How could you not know that?

Your defense of the BLS boils down to consumer surveys?  Cmon, this is too easy.  

Yes David, you can try to cast doubt using these silly philosophical arguments.

Really?  Hmmm... Ok, then you should have no problem destroying these silly arguments.

For the umpteenth time, explain how you measure utility objectively.

If you can....(Hint: "using surveys" is not a legitimate answer LOL)

David in Liberty

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#74) On November 27, 2012 at 6:35 PM, ETFsRule (99.94) wrote:

You tried to argue that the BLS did not use any real data (ie: observations). I showed that they do. Therefore, you were absolutely, unquestionably, 100% wrong on that point. Why not just admit it?

"The weights are not based on observation. You are simply naive and kinda stupid to think so. Only human action reveals preferences. Shucks, i havent seen any Fed economists at my local grocery store. Have you?"

Here is the argument that you had presented. Do you remember when you said this? It was catastrophically incorrect. The BLS has direct, observable data on consumer purchases. The CPI weights are based on observations.

"For the umpteenth time, explain how you measure utility objectively."

I have already explained this to you. Only human action reveals preferences, right? Your words. That is why I explained to you that the CPI is not predictive; it is based on observations. So, of course it can describe consumer's preferences, by observing human action.

Lastly, if there is no way to measure utility objectively, then why did you resort to using Shadow Stats as "evidence" of high inflation? Doesn't that make you a complete hypocrite? Aren't you really just a fake skeptic, who is willing to accept phony numbers with absolutely nothing to back them up?

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#75) On November 28, 2012 at 10:56 PM, whereaminow (20.23) wrote:

The fact that you keep bringing up shadow stats shows how out of touch you are with non MSM information.  No one cares.

As far as your question. Utility cannot be measured. Therefore, correctly, you point out that John Williams' work cannot perfectly measure the general price level either.  Now, if you can find a quote where I said that it is an exact measure of the general price level, I will happily retract it. I'm quite sure what I have said in the past is that Williams' work represents pre-Clinton econometric measurements of the price level.  

Now I've written at least a dozen blogs on inflation, if not more, and have never used Shadow Stats as support for my argument. I've had fun debates with other people's blogs on their stupid arguments against SS.  For example, I remember Jakila saying there is no way SS can be right because wages have not risen as high as it would imply.  That line of reasoning totally misunderstands how inflation works in the first place.  That being said, Jakila's or your ignorance on how inflation works doesn't in and of itself make SS correct.  That's why I've spent all of 20 minutes of the last 4 years on Motley Fool talking about Shadow Stats.

You seem to be infatuated with it.  Good luck with that.

Back to our discussion, I asked you how do they know how many consumers switched from one item to another when prices moved.  Your response so far is that they observed it through surveys. (Which is not observation. It's surveys.)

Is that really what you are saying?  If anything, the surveys could be useful in determining what items are in the consumer basket to be measured (though still very imperfect, obviously), but there is no way such a measure would tell us how many switched from one item to another due to price changes.  I shouldn't really have to explain why that is, but if you think of how ordinal rankings work it is hopefully obvious.

Well, have the last word. I'm bored.

David in Liberty

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#76) On November 29, 2012 at 9:52 AM, ETFsRule (99.94) wrote:

"Now, if you can find a quote where I said that it is an exact measure of the general price level, I will happily retract it."

Your words weren't carefully chosen. It was basically: "look! inflation is high because SS says so!". The point is that you pretend to be very meticulous and skeptical when discussing data that you don't like, but you accept anything at face value if you do like it.

" If anything, the surveys could be useful in determining what items are in the consumer basket to be measured (though still very imperfect, obviously), but there is no way such a measure would tell us how many switched from one item to another due to price changes.  I shouldn't really have to explain why that is, but if you think of how ordinal rankings work it is hopefully obvious."

We can see what people are buying and how much those items cost. If people make significant changes, like buying hamburger instead of filet mignon, this is already accounted for in the CPI calculations (the BLS explains this argument, as I'm sure you are aware). It's good enough.

I have never claimed that the CPI is a perfect measure of the price level. Maybe the CPI is only a 99% accurate measure of the "true" price level, because we can't read people's minds and see why they are buying those items. That's ok with me - I don't see the need for 100% accuracy. I'm sure the BLS admits that there is some small degree of uncertainty in the number, as there is with any number. This is why I look to other sources of measurable data, such as the BPP and industry sources, to confirm the BLS numbers.

You can also argue that a thermometer is a flawed tool for measuring temperatures, because of the Heisenburg Uncertainty Principle. This would be a correct argument, but it still isn't very relevant because there isn't anything to suggest that thermometers are inaccurate by any significant amount.

So, I'm sure you can see why I am more concerned with measurable data instead of these types of philosophical arguments that don't result in anything useful.

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#77) On November 29, 2012 at 9:52 AM, ETFsRule (99.94) wrote:

.

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#78) On November 30, 2012 at 8:41 PM, ChrisGraley (29.75) wrote:

Wow! I should have checked backed in this thread earlier!. Dave, I'll warn you that arguing with ETF is like arguing with a door. He still thinks he won the global warming argument from earlier. I offered him a nibble saying that both man and oil played a role, but it wasn't the role he thought it was. He chose to leave it like that because winning is more important than understanding. He's in the deep end of the pool wearing his floaties.

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#79) On November 30, 2012 at 10:35 PM, awallejr (81.55) wrote:

Well I can be stubborn too ;)

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#80) On December 02, 2012 at 6:20 PM, ETFsRule (99.94) wrote:

"Wow! I should have checked backed in this thread earlier!. Dave, I'll warn you that arguing with ETF is like arguing with a door. He still thinks he won the global warming argument from earlier. I offered him a nibble saying that both man and oil played a role, but it wasn't the role he thought it was. He chose to leave it like that because winning is more important than understanding. He's in the deep end of the pool wearing his floaties."

You are so cute Chris.

It's too bad that you can't win an argument with "hints" or with "nibbles". It's a common rhetorical trick: to find ways to imply that you know more than you really do. People will think you know something, when in fact you know nothing at all, and that is why you will not say anything.

Yes, man and nature both play a role in global warming. Do you think that is an original idea? Here's a hint for you: it is not. It is what I believe, as well as what the entire scientific community including the IPCC believes.

Do you have anything new or interesting to contribute regarding the global warming discussion? Do you have anything to support your side of the arguemnt? What is your side, anyway? You haven't even begun to explain your position. What not just post something, in a straightforward manner, instead of these silly implications and insults?

Anyway: please post your deep insights whenever you can find the time. It doesn't do much good to imply that you have something to say, if you are going to be too shy to simply come out and say it.

Also: do you have any disagreements with any of my posts about inflation? Apparently you think I am doorlike, yet you can't seem to come up with any arguments against anything that I have said. I have directly responded to every single argument that David has put forth. That is a lot more than I can say for him, or for you. 

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#81) On December 02, 2012 at 6:20 PM, ETFsRule (99.94) wrote:

.

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