CPI lies

"ricochetboy" <philzberg@e...> wrote:

The price of gold has been systematically suppressed by the trmporary
delusion of the public that the fractional reserve fiat system is
working and can work indefinitely

This "temporary delusion" has been operating for a quarter century, in which
real GDP (in 1992 dollars) has grown from $5 trillion to $10 trillion. Do
you date the fiat system from the 1971 closing of the gold window, or the
1913 creation of the Fed? If the latter, then that quarter century can be
expanded to the half-century that includes the postwar golden age of high
growth and low inflation. At some point, you have to admit that being a
goldbug is a religion, impervious to empirical refutation.

Bill Bonner loves to tell the
story of a bbell hop in Berlin who kept the gold coins given him as
tips by wealthy patrons sooon after the war. By the time the
hyperinflation of the twenties was over, these gold coins could pay
off the mortgae on the whole hotel.

You might as well tell us a story about the Black Death of 1348. We've
learned a little about epidemics and hyperinflation since these respective

I do not know when it will happen, this month, this year or
maybe in a hundred years,

How about a thousand? How many millennia of mid-three-figure-dollar gold
prices would it take to convince you that fiat currency can work?

but history says that fiat money allweys
end in trdgedy.

History is subject to progress. For example, spell checkers get invented.

David Rhodes <dfrhodes@y...> wrote:

why is it that whenever someone tries
to debunk gold they always 'conveniently' reference
1980 or 1981 as the starting year? Was it not then
gold was at an all time high against the dollar? hmm..

I didn't reference the $850 record high of 1980, I referenced the $400 price
of 1982, for the obvious reason that 1982 is the start of the current era of
low dollar inflation that Phil untenably claims is illusory.

I am also curious about your cynicism towards Puplava
when you said - "EVERY homeowner knows that the point
of buying is to stop paying rent." I think this is a
grand over-generalization about homeowners. A major
aspect of the Austrian School states that is
essentially impossible to second guess everyone's
intentions for why they choose to purchase X over Y or
none at all.

Give me the name of a homeowner who does not know that owning the home means
they now do not have to pay rent to control who occupies it. Until you do,
my claim stands.

For instance, someone could buy a second home for
investment, vacationing or for in-laws - without ever
having the intention to rent it out. The way houses
are constructed or located also makes some of them
unsuitable for renting..conditions that would have
impacted their purchasing decision.

So at best, OER is distorted as it doesn't accommodate
variances between the two markets.

A recent National
<http://www.mortgagenewsdaily.com/382005_Second_Homes.asp> Association of
Realtors study drastically increased the usual estimates of
non-owner-occupied homes, but it still found that only 6% of homes are
vacation homes, and only 11% of the nation's 116 million homes are neither
rented nor owner-occupied. The study seems not to have included "in-law" or
"unsuitable for renting" homes as categories, presumably because they are
insignificant. Thus it's pretty clear that the overwhelming majority of
homes yield either actual or equivalent rent to their owners.

And why use the OER method just for housing?
Why not convert all capital expenses to services?
After all you can rent computers, cars,furs, cell

When consumers buy or rent these items for consumption/enjoyment rather than
production/investment, they are not capital goods, but rather durable goods.
The answer to your question is surely that, for all the expenditure groups
<http://www.bls.gov/cpi/cpi1998c.htm> in the CPI, the only other
significant kinds of durable goods besides shelter are vehicles and
household furnishings. These goods differ radically from shelter in how
long they are used after purchase, and the extent to which they retain
resale value. If a durable good only endures for a few years and only
retains a fraction of its purchase price, then amortizing its purchase price
is a perfectly adequate way to measure how much such a good costs a

For technical background on the CPI, see
http://www.bls.gov/opub/hom/homch17_a.htm. It's just not tenable to claim
that the CPI is part of a conspiracy to hide the alleged failure of the
dollar as a fiat currency. Such claims only increase the
self-marginalization of the Libertarian Party.

Brian Holtz
Yahoo! Inc.
2004 Libertarian candidate for Congress, CA14 (Silicon Valley)
blog: http://knowinghumans.net/>
book: http://humanknowledge.net/>

We have untold millions living in povery. We had a great depressionn
brought on by monetary expansion, adjusted for inflation the loss of
wealth from the recession from 1966 to 1982 was a severe as the great
depression. It is true that Bretton Woods succeeded in increasing the
wealth of the finacial and government classes in the US to a far
greater degree than could ever have been omagined or planned in
1944.By making the US dollar the worlds standrd of value, the Fed has
been anle to dilute the coin of the realm for sixty years and pass
the resulting inflation onto the rest of the worlds because the
central banks and citizens of the world took the dollars buwhat
essentially was planetary legal tender laws. This enabled a tremendous
trandfer of wealth tothe american finacial elite and it's governmemnt
benefactor. The continuous debasement of the currencypunished savers
and rewarded debtors worldwide, but especially in the US. Viet Nam was
funded this way, as is Iraq.The Spainish in the 16 to 18 th centuries
were in an alalagous situation.They had the worlds money supply in the
form of silver from south america. The resulting monetary based
prosperity destroyed the industrial and the moral fabric of the
country. By virtue of the US dollar status as the woekds reserve
curency, the currency has been significantly overvalued for a very
long time,and this has contributed to the declinein the manufacturing
base.The US is now runnig a 6 percent current account deficit which is
unsustainablw. Many of the jobs remaining are based on the finacial
sector which is dependant on eveer declining interest rates. For
example half of the jobs createdd in Calofornia over the last few
years are real estate related, a non productive asset, generally
priced way above the potential rental income value,and dependant on
cotinuous credit expansion. It is posssible if not likely that the US
in 1045 ended up with more gold than it ever owned up to, as it
appears Mac Arthur was able to extract information about where Japan
had hidden it's gold looted from China and the rest of Asia . However
this iscontradicted by observations that the US was reduced by 1971 to
satisfying international demands with inferior bars made form melting
the gold deized by Toosevelt in 1933. As I have said before economic
growth is everyone's birthright ina free society. And we may continue
to prosper despote the predation of continuous monetary debasement.
Arguing against the continuation of the status quo us the Chinese and
soon the rest of Asia allowing thier currencies to appreciate. This
will remove one of the major crutches unser US interst rates and the
dollar as per my Walmart trace a few posts back. The fed , if it wants
to keep long term rates from rising dramatically will bave t montize,
is buy long term treasuries. This is highly inflationary. If the
marrkets cee the infaltion, the dollar s decline may
accelerate.further fueling inflation. It's intersting to see the
imbeciles in Congress reacting to the not so bright public demanding
something be done about gas prices. thier response, a hugh pork energy
bill. Nobody, I mean nobody talks bout the fact that a big part of
oils price rise is the dollars decline and another big partt will be
the rising value of the Yuan making gas more affoordable in China.So
the Republicans throw money at Exxon, and the Dems will balme Exxon.
And nobody woll blame the Fed for printing the dollar into final
worthlessness even after sixty years of politically created finacial

Past performance is no indication of future results, as the fine print
always says. The central banks staxh gives indications that sixty
years of dishording has taken it's toll. The trillions in overseas US
assets that have silently watched over 40 percent declines since Bush
took office, may finally reach the threshold of pain, and all run for
the exits at once. I would say that the populat hubris that the Fed
can centrally plan the finacil syustem indefinitely now that we are on
a totlal faith based system is a mass delusion bordering ona religion.
The mainstram gold bashers who are legion, have much to gain from the
staus quo, and are at least as Religous as the most pious gold bug.I
think the facts of the presentsituation are simply scary.I also think
that entire lesson of monetary history demonstrates that the
continuous debsement of the money leads to suffering for the many, an
ultimately ruin. So Pray at the feet fo Sir Allen.You have plenty of