"ricochetboy" <philzberg@e...> wrote:
Since 1980 m3 had risen from
two trillion to 10 trillion, a 500 perce3nt increase. The definition of
inflation is more money.
Your "500% increase" is only a 6.6% compound annual rate of increase. The
definition of inflation is in fact more money chasing the same amount of
goods. When you subtract from that 6.6% the rate of increase in output, you
get an inflation rate that is quite close to the low CPI-based inflation
rate since 1982.
The Fed more than doubled the money supply
from it's inception until 1929 and there was no price inflation in
that era either.
Doubling in 16 years is only about a 4% compound annual rate. See above.
Energy increases have been flat out papered over,
see last weeks Mogambo Guru on kitco.com.
You mean http://www.kitco.com/ind/Daughty/aug032005.html, entitled "Go Make
A Fortune In Commodities" and posted on the site of a gold bullion dealer?
It's interesting that you see a conspiracy behind every Fed shadow, but
don't question the bias and credibility of a rant like this on a site that
is a) selling gold and b) trying to convince the gullible that gold is smart
to buy.
The rant says: "American Auto Association calculates that gasoline prices
have risen 21.5% since this same time last year. But the government swears
gas prices are only 6.9% higher over the year". The 6.9% figure is from
June 2004 to June 2005. The 21% figure is from early August 2004 to early
August 2005, and includes a 5% rise in the last month. The graph at AAA's
http://www.fuelgaugereport.com/ indicates a June 2005 national average price
for regular unleaded of $2.15, versus $1.85 in Sep 2004. The BLS city
average for regular unleaded on those dates are very similar ($2.17 and
$1.89), but in Jun 2004 the price was $2.04. So your claim of "flat out
papered over" is based on cherrypicking of data to leave out the Jun-Aug
2004 price decrease of 8% and the 5% increase of Jul 2005.
Once again, your data do not hold up, and your sources are easily
discredited. In these last four emails I've documented you making seven
demonstrably false or misleading statements:
* "debasement" of the dollar that is completely invisible in a quarter
century of the dollar price of gold;
* dismissal of the CPI notion of Owner-Equivalent Rent;
* cherry-picking equity prices from 1966 to 1982;
* calling 1966-1982 a "recession" when it saw a 53% increase in real
GDP;
* pretending the 25-year 500% increase in M3 constitutes more
inflation than the stated CPI figures which you say are lies;
* mis-defining inflation as any increase in the money supply;
* claiming the CPI "papers over" gasoline price increases in the last
year.
Correcting all this is too much work for one part-time volunteer. I'm
going to radically cut my time budget for rebutting you, since it should be
clear to our audience by now that your empirical claims too often contradict
or distort relevant data, and your sources too often lack credibility. If
you (or anyone in the audience) would like to further subject your gold-bug
analyses to further criticism from a mainstream economic perspective, ping
me in a couple weeks and nominate what you think is the strongest piece
you've posted up to then.
Brian Holtz
Yahoo! Inc.
2004 Libertarian candidate for Congress, CA14 (Silicon Valley)
http://marketliberal.org/>
blog: http://knowinghumans.net/>
book: http://humanknowledge.net/>