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Old 01-07-2018, 07:00 AM
 
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it is always those that do not understand what the cpi represents or how it is calculated that love to claim the thousands of workers involved in it are committing fraud by manipulating the numbers . NONSENSE!
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Old 01-07-2018, 10:56 AM
 
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Housing sure will! Once interest rates adjust, wages remain stagnant, and lending standards are adjusted to rational levels you will see a significant resetting.
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Old 01-07-2018, 11:10 AM
 
6,999 posts, read 6,635,326 times
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Quote:
Originally Posted by mathjak107 View Post
it is always those that do not understand what the cpi represents or how it is calculated that love to claim the thousands of workers involved in it are committing fraud by manipulating the numbers . NONSENSE!
I know how the CPI was modified back in the 80's and 90's. You still haven't demonstrated any more knowledge of how the CPI is constructed, nor of the flaws and biases in the methods and internal surveys that were incorporated to lower the CPI's rate of change. The last bastion of a fraud is to hide behind an institution and claim the other side is somehow unpatriotic or libelous.
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Old 01-07-2018, 12:11 PM
 
Location: Myrtle Creek, Oregon
11,051 posts, read 11,460,740 times
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Quote:
Originally Posted by lieqiang View Post
Who does this and how do they do it? Usually when people make this claim their only evidence is vague references to a gut feeling or some personal anecdote of a favorite product costing more at the grocery store, I'd love to hear some real facts on exactly what is being done to create bogus numbers.

Social Security Admin uses CPI-W to do their COLA, which is calculated by BLS. I'm sure some arguments could be made about methodology but just about every suggestion of an alternate means of measuring ends up with gains/losses in accuracy for different population groups.

Also the word "bogus" implies nefarious doings, do we really need to get into the level of secrecy required to have an organization as large as BLS all conspiring to generate fictitious numbers?
You have the motive. You have the opportunity. You have a dead body. And you want to assume the death was accidental? That's insanity.

I suppose you think the chained CPI is a good idea too. If you are not familiar with the chained CPI, it is based on the assumption that if people have less money they will automatically lower their standard of living, so inflation does not affect them.
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Old 01-07-2018, 01:32 PM
 
Location: Log "cabin" west of Bangor
5,488 posts, read 6,428,655 times
Reputation: 9378
Quote:
Originally Posted by hitpausebutton2 View Post
So what needs to change to keep it from getting out of hand. Just stop printing money that we dont have? or can business just learn to deal with lower profit margins and sell things little bit cheaper then they actually cost? I see the problem were we demand higher wages to offset the increase in products, but its like beating a dead horse. Again the spiral wage issue as reported.
Ummmmm...what?

Employee: "Hey, Boss, I know it costs us $15 to make this widget, but we should sell it for $10."

Boss: "What the #%@$ is wrong with you? We'll lose $5 on every unit."

Employee: "Well, we'll make it up in volume."

Boss: "No, we'll make it up with your salary. You're too stupid to work here. You're fired."
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Old 01-07-2018, 06:47 PM
 
Location: Silicon Valley
2,756 posts, read 1,211,909 times
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Quote:
Originally Posted by mathjak107 View Post
when many of us bought our first homes in the 1970's homes in long island were 30-35k .

that mortgage was crushing back then and far more than rent .

well today takes are 15k and that paid off mortgage did nothing for affordability . it does not even equal your utility bills .

one correction though , it is not the long term debt that benefits from inflation .

it is what you buy that matters . i can take on long term debt and buy treasury bonds and get crushed by inflation . on the other hand i can buy a home , but a homeowner with no debt on the house benefits just the same .

debt is not initself an inflation hedge , it only allows you you to buy an inflation hedge . but owning that hedge with no debt gives you the same benefit .
I get what you're saying, but I think the range is too narrow.

If I received a loan of Zimbabwe money in 2000, and had to pay it back today, assuming I received SOMETHING of value, I just got it for free. If I bought Zimbabwe treasury bonds, then I'm an idiot, as even then an individual isn't going to get a loan cheaper than the country can. (I hope) However, if I bought US bonds, I'm a genius because of the FX movement. If I bought property whose income will go up with inflation, then I'm an even bigger genius.

As more of the the US debt is held overseas, inflation starts to make more sense, assuming it doesn't outpace income or become uncontrolled...but it works a lot better if we had a trade surplus....which would inherently make it hard to create outsized inflation.

Certainly it's not the best way to do things. I believe reading the history of the Italian lira would be a good place for actual research.
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Old 01-07-2018, 06:59 PM
 
Location: Silicon Valley
2,756 posts, read 1,211,909 times
Reputation: 5059
Quote:
Originally Posted by Zymer View Post
Ummmmm...what?

Employee: "Hey, Boss, I know it costs us $15 to make this widget, but we should sell it for $10."

Boss: "What the #%@$ is wrong with you? We'll lose $5 on every unit."

Employee: "Well, we'll make it up in volume."

Boss: "No, we'll make it up with your salary. You're too stupid to work here. You're fired."
No joke, the place I'm consulting for right now is going into a third world dictatorship with this plan: Build a box that costs $43 and lease it over 2 years for a total of $20 (assuming no FX loss...highly unlikely). This was a no fly until we realized: Then we get them back and can re-lease them. So the revenue will still go to revenue, but the box is going to be depreciated (and taken out for EBITDA purposes). Of course, these boxes are good for at least 10 years...so instead of:

$20 Sales - 43 COS = Your an Idiot. Why would you ever do this?

it's

$20-0 COS - $8.60 Depreciation = Your a genius. Here's a promotion! (and the person following you is totally screwed...but hopefully someone will buy our company by then)

I really think the accounting industry is going to rue the day they abandoned the matching principle on revenue. Until then, the wait is almost over. It's coming to a financial statement near you!!! (PS...get familiar with Statement of Cash Flows instead)
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Old 01-07-2018, 07:11 PM
 
4,729 posts, read 2,259,491 times
Reputation: 8775
Quote:
Originally Posted by Larry Caldwell View Post
You have the motive. You have the opportunity. You have a dead body. And you want to assume the death was accidental? That's insanity.

I suppose you think the chained CPI is a good idea too. If you are not familiar with the chained CPI, it is based on the assumption that if people have less money they will automatically lower their standard of living, so inflation does not affect them.
So you're saying that the proof CPI is based on bogus numbers is your gut feeling and imagination. Typical Caldwell.

Can you tell me who uses chained CPI? I'd love to hear how that is affecting people.
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Old 01-07-2018, 07:13 PM
 
4,729 posts, read 2,259,491 times
Reputation: 8775
Quote:
Originally Posted by lchoro View Post
I know how the CPI was modified back in the 80's and 90's. You still haven't demonstrated any more knowledge of how the CPI is constructed, nor of the flaws and biases in the methods and internal surveys that were incorporated to lower the CPI's rate of change. The last bastion of a fraud is to hide behind an institution and claim the other side is somehow unpatriotic or libelous.
I ask again, which President or congress ordered CPI changed and how did they do it?

A methodology that you, with your own personal biases considers flaws doesn't make it any worse than any other methodology. There are tons of smug internet armchair statisticians that believe their personal preference to how something should be done, not based on any formal education or training but just reading articles in their own echo chamber. A degree from University of ZeroHedge doesn't carry much weight in the real world.
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Old 01-08-2018, 02:26 PM
 
Location: Myrtle Creek, Oregon
11,051 posts, read 11,460,740 times
Reputation: 17209
Quote:
Originally Posted by lieqiang View Post
So you're saying that the proof CPI is based on bogus numbers is your gut feeling and imagination. Typical Caldwell.

Can you tell me who uses chained CPI? I'd love to hear how that is affecting people.
The new Republican tax bill uses chained CPI. Did you miss the front page announcement? It affects the middle class because it is a small but steady increase in taxes for as long as it is in place, probably decades. Your bracket creep is now creeping just a little faster. Since 2000, your tax brackets have been adjusted upward 49.7%. Under chained CPI, the adjustment would have been 39.7%. More of your income will slide into a higher tax bracket, increasing your tax bill.

I find it ironic that you accuse me of "gut feeling and imagination" when you can't even be bothered to read a newspaper.
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