Dollar vs Euro

[G8trGr8t]

US printed to recap banks to meet Basel III

EU did not print, said they were not going to require banks to meet Basel III despite agreement with US and Fed to do so.

Dollar slide began today. Watch oil and other commodities begin to climb as the printing begins the dollar debasement.

The next few weeks should be telling

[gator10010]

If the euro survives it will be in much better shape in the future than the dollar. It will be interesting to see how it plays out.

People have been very dismissive when it comes to inflation, going as far as claiming inflation is good and citing misleading CPI numbers, they blame the 1%, corporations, and crony capitalism for their personal economic woes when in reality their beloved government is stealing from their bank accounts daily.

[philnotfil]

Originally Posted by gator10010

If the euro survives it will be in much better shape in the future than the dollar. It will be interesting to see how it plays out.

People have been very dismissive when it comes to inflation, going as far as claiming inflation is good and citing misleading CPI numbers, they blame the 1%, corporations, and crony capitalism for their personal economic woes when in reality their beloved government is stealing from their bank accounts daily.

Rather than CPI, what measure would you prefer to use for inflation?

[corpgator]

Gradual Inflation is probably the least painful way to lower our debt and deficits.

[Burke]

Why should govts dictate what citizens use for money?

Why not just let them trade freely?

But then no one would use the govt issued money.

Because everyone with a brain knows they are robbing us blind by printing it whenever they choose.

But thanks for the info G8tr.

[orangeblueorangeblue]

If bartering were easier I'm sure people would. There's obviously a lot of headway being made in that regard with crypto currencies.

[wgbgator]

Yeah, bartering sucks. I've read some fairly persuasive sociological arguments that historical bartering is more about getting everything you can in a one time transaction than the fair(er) exchange of value you get in currency. I'm sure technology could alter that to some degree. But its hard to see how bartering could ever trump circulating IOUs in simplicity.

[Burke]

Who said anything about bartering?

Letting individuals trade freely means letting them use whatever they choose to use as money?

Enforcing contracts that are payable in gold, silver, platinum, wampum or whatever.

Of course, gold would emerge as the universal money, as it has in the past

Govt forces us to use its money so politicians and their friends can rob us by printing themselves some when they choose to.

Nothing complicated about that.

[wgbgator]

Originally Posted by Burke

Who said anything about bartering?

Letting individuals trade freely means letting them use whatever they choose to use as money?

Enforcing contracts that are payable in gold, silver, platinum, wampum or whatever.

Of course, gold would emerge as the universal money, as it has in the past

Govt forces us to use its money so politicians and their friends can rob us by printing themselves some when they choose to.

Nothing complicated about that.

That's terribly inefficient for trade, because then you have many different things circulating with different fluctuating values, and you'll run into people who won't exchange things for whatever you have, because they can't easily turn around and exchange them efficiently either.

[orangeblueorangeblue]

Originally Posted by Burke

Who said anything about bartering?

Letting individuals trade freely means letting them use whatever they choose to use as money?

Enforcing contracts that are payable in gold, silver, platinum, wampum or whatever.

Of course, gold would emerge as the universal money, as it has in the past

Govt forces us to use its money so politicians and their friends can rob us by printing themselves some when they choose to.

Nothing complicated about that.

That's bartering.

[G8trGr8t]

Originally Posted by corpgator

Gradual Inflation is probably the least painful way to lower our debt and deficits.

inflation typically brings raising interest rates to control it which does what again to the cost of the deficit??

[Burke]

Think about the alternative to what I propose.

If a group of people want to trade among themselves with Monopoly money, they will, one way or another, be forced to use govt issued fiat money instead.

And look at what the alternative has brought.

A dollar that is worth about half what it was worth 25 yrs ago.

And most of the other economic problems we are having.

Including, probably, the eventual collapse of the dollar and the economy.

[gator10010]

Originally Posted by philnotfil

Rather than CPI, what measure would you prefer to use for inflation?

Everyday Price Index (EPI)

The EPI actually reflects every day living for the average American. The CPI doesn't even include food and energy. The govt and the media constantly refer to the CPI inflation rate which misleads Americans into thinking inflation is not as bad as it appears.

When the govt sites 3% inflation, no one freaks out because most Americans believe that inflation is normal and good for an economy. Can you imagine what the reaction would be if the govt and media reported 8 or 9% inflation? What about 12% inflation?

The EPI does a better job of reflecting inflation that affects real household budgets.

[Burke]

Orange,

The fact that a commodity is used for money rather than almost worthless paper does not mean the use of commodity money is barter.

[wgbgator]

Originally Posted by Burke

Orange,

The fact that a commodity is used for money rather than almost worthless paper does not mean the use of commodity money is barter.

I agree with Burke on this. If something circulates, its no longer barter, which to me is a one-off exchange of something.

[wargunfan]

Food prices in the grocery store have been rising a lot faster than the CPI. I don't know how average families feed themselves without sacrificing elsewhere. The working poor have been hit hardest.

[philnotfil]

Originally Posted by gator10010

Everyday Price Index (EPI)

The EPI actually reflects every day living for the average American. The CPI doesn't even include food and energy. The govt and the media constantly refer to the CPI inflation rate which misleads Americans into thinking inflation is not as bad as it appears.

When the govt sites 3% inflation, no one freaks out because most Americans believe that inflation is normal and good for an economy. Can you imagine what the reaction would be if the govt and media reported 8 or 9% inflation? What about 12% inflation?

The EPI does a better job of reflecting inflation that affects real household budgets.

If you spend half of your income on food, the EPI does do a better job of reflecting inflation. EPI makes some odd assumptions about how people spend their money. It doesn't include housing, which is the single largest expense for most households, and it overemphasizes energy and food which are much more volatile.

Here is a good graph showing the differences:


If you truly believe that inflation was up 15% in 2008, and down 12% in 2009, and back up 5% in 2010, then EPI is the metric for you. I don't think that overstating the volatility in prices is effective for anything other than fearmongering.

[mdgator05]

Originally Posted by gator10010

Everyday Price Index (EPI)

The EPI actually reflects every day living for the average American. The CPI doesn't even include food and energy. The govt and the media constantly refer to the CPI inflation rate which misleads Americans into thinking inflation is not as bad as it appears.

When the govt sites 3% inflation, no one freaks out because most Americans believe that inflation is normal and good for an economy. Can you imagine what the reaction would be if the govt and media reported 8 or 9% inflation? What about 12% inflation?

The EPI does a better job of reflecting inflation that affects real household budgets.

This is a very common myth. The CPI releases two measures, one that includes energy and food and the other that doesn't include energy and food.

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

Has the BLS removed food or energy prices in its official measure of inflation?

No. The BLS publishes thousands of CPI indexes each month, including the headline All Items CPI for All Urban Consumers (CPI-U) and the CPI-U for All Items Less Food and Energy. The latter series, widely referred to as the "core" CPI, is closely watched by many economic analysts and policymakers under the belief that food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy. However, all consumer goods and services, including food and energy, are represented in the headline CPI.

Most importantly, none of the prominent legislated uses of the CPI excludes food and energy. Social security and federal retirement benefits are updated each year for inflation by the All Items CPI for Urban Wage Earners and Clerical Workers (CPI-W). Individual income tax parameters and Treasury Inflation-Protected Securities (TIPS) returns are based on the All Items CPI-U.

Looking into the EPI, it appears to be a more volatile measure based on the elimination of certain durable goods, which while not frequent purchases, are major household expenditures (such as cars). So what ends up occurring is simply a much more volatile measure, in which if the CPI is increasing, it shoots up even more, while if the CPI is declining, it shoots down even more. So why is ignoring car purchases entirely due to the rarity of such a person in a household a better metric than a metric that includes the car purchase (as well as food and energy prices) as the CPI does?

[orangeblueorangeblue]

Originally Posted by Burke

Orange,

The fact that a commodity is used for money rather than almost worthless paper does not mean the use of commodity money is barter.

Typically barter means an arbitrary or non-standard item of exchange with inherent value. If you used gold as a transactionary medium alone, it's currency. If it is exchanged directly, that's barter.

It's also been said that any exchange using a medium with high variance value can be considered barter.

[gator10010]

Originally Posted by mdgator05

This is a very common myth. The CPI releases two measures, one that includes energy and food and the other that doesn't include energy and food.

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



Looking into the EPI, it appears to be a more volatile measure based on the elimination of certain durable goods, which while not frequent purchases, are major household expenditures (such as cars). So what ends up occurring is simply a much more volatile measure, in which if the CPI is increasing, it shoots up even more, while if the CPI is declining, it shoots down even more. So why is ignoring car purchases entirely due to the rarity of such a person in a household a better metric than a metric that includes the car purchase (as well as food and energy prices) as the CPI does?

Yes I realize the CPI has several measures of inflation, when the media and government talk about CPI the majority of the time they are talking about the "core" CPI. Which in you link states the core CPI does not reflect food and energy prices.