4 ms·

If you're worried about inflation, then you might want to take a look at TIPS http://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm http://www.treas

by lftl 17y ago

If you're worried about inflation, then you might want to take a look at TIPS http://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm http://www.treasurydirect.gov/indiv/products/prod_tips_glanc...

tocomment 17y ago
that's kind of cool. Ok, don't shoot me, but that is probably based on the CPI and folks on reddit say government published inflation data understates inflation. Maybe I should just stop reading reddit ...
- kdw 17y ago
  Frankly, reddit is a truly horrible source of information about business and the economy. The loudest commenters on those topics tend to be educated primarily via blogs. Personally, I'd advocate a subscription to the Financial Times, which is brief and factual in nature, with opinions kept to the opinion page.
  - bokonist 17y ago
    Keep in mind that the mainstream, professional economists did in fact lead the economy of the cliff. So mainstream views of economics are not exactly error-free. Blogs, reddit, etc. are full of populist myths. But the blind squirrel occaisionally finds some nuts. Or an elephant. The CPI is the elephant.
    - maukdaddy 17y ago
      Economists did not lead the economy off a cliff, the financial firms did. Big difference.
      - bokonist 17y ago
        The economists at the Fed set the rules of the game (too big to fail, lender of last resort, Greenspan put) that rewarded increasing levels of irresponsibility over the last two decades. Firms have one directive: make money. The Fed has the directive of setting the rules so that financial firms make money from being productive, rather than living off the taxpayer. The Fed failed at this.
        deleted 17y ago
        [deleted]
    - deleted 17y ago
      [deleted]
- Tuna-Fish 17y ago
  CPI doesn't categorically understate inflation, sometimes it shoots high, sometimes low. This is understandable, as turning something as complicated as inflation over all the goods and services bough in a country into a single number cannot exactly be simple. Lately, the index has arguably been understating inflation a little because the cost of living is going down, which pulls the index on the whole down even if the price of most of the essentials on it are going up. Then again, this can simply be considered wad -- cost of living is a very major household expense, even if most people who already own a house don't see the cost reductions on their balance sheet.
- bokonist 17y ago
  No, the Redditers are right. Well, more or less right. The CPI is entirely subjective. There is no objective way to measure quantitatively how much quality of a product has improved. More importantly, from an investment perspective what you care about is monetary dilution, not consumer prices. If the currency dilutes at 10% a year, and productivity grows at 7% a year, then CPI inflation would be a nice and easy 3%. But that dilution rate is really high. If you own a asset that dilutes at 2% (gold, stocks, oil, real estate), you'll earn a return of 8% a year. I really recommend this article for understanding the problems with CPI: http://unqualified-reservations.blogspot.com/2008/08/de-gustibus-non-computandum-or.html http://unqualified-reservations.blogspot.com/2008/08/de-gust...
  - deleted 17y ago
    [deleted]
  - deleted 17y ago
    [deleted]
  - kdw 17y ago
    Okay, you win. I'll leave HN as well. I'm just a guy with a deep and abiding fascination with economics and public policy. One so deep I recently picked up a graduate degree on the subject. One so deep that my current startup is based entirely on my desire to help individuals better understand the financial possibilities that lie before them. But you've read a blog and some things on reddit, so clearly you understand it better than me. I'm sick of arguing with people like you... people who base their economic beliefs not on solid econometric analysis, but rather on mostly inaccurate blog posts... and yet you still mistake yourself for an expert. You win. I'm out of here too. I'm deleting my posts that are available for deletion, because the combined arrogance and ignorance of your response here makes clear that I was foolish for thinking that this could be a venue for informed discussion. I won't waste another second of my life "debating" well established knowledge with an idiot like you.
    - bokonist 17y ago
      Wow. You complain about me being "arrogant" and "ignorant" and then you make entirely false statements about my own background (a subject of which you know absolutely nothing). You then complain about the quality of this forum, and then are the first person in two years of commenting on Hacker News that has ever attacked me ad hominem. I suspect that you are reasonable person that is just especially frustrated by the generally low quality of internet commentary about economics ( I too no longer visit reddit, but that doesn't mean the people there are wrong about everything). But if that kind of language is common with you, I do hope that you leave Hacker News. I have had also had a long and deep fascination with economics and public policy. I've read dozens of books on finance and economics, from the original classics to more modern research. I've read hundreds of articles, I used to browse through social science libraries and download NBER papers for fun. I've had long and productive discussions with academic economists, people who work in finance and people who have worked in central banking. I don't claim to be omniscient about economics. But I have formed judgments, I state them plainly, and I welcome debate and hearing new arguments. I do not disagree with Keynesians or other mainstream folks because I am ignorant of their arguments. I disagree because I have evaluated them very carefully, read everything I could on the subject, and found their theories unconvincing. I would be happy to debate or back up either of the two claims I made ( "The CPI is not a good measure of inflation" and "The mainstream economists led the economy off a cliff"). If you want to read comments where I elaborate more, you can read a few I made elsewhere: http://www.newmogul.com/item?id=15334 http://www.newmogul.com/item?id=15334 or http://www.newmogul.com/item?id=12274 http://www.newmogul.com/item?id=12274 I would actually really like to debate them with a worthy opponent. I too find good economic debate very hard to find on the web.

by lftl 17y ago

tocomment 17y ago

that's kind of cool. Ok, don't shoot me, but that is probably based on the CPI and folks on reddit say government published inflation data understates inflation. Maybe I should just stop reading reddit ...

kdw 17y ago
Frankly, reddit is a truly horrible source of information about business and the economy. The loudest commenters on those topics tend to be educated primarily via blogs. Personally, I'd advocate a subscription to the Financial Times, which is brief and factual in nature, with opinions kept to the opinion page.
- bokonist 17y ago
  Keep in mind that the mainstream, professional economists did in fact lead the economy of the cliff. So mainstream views of economics are not exactly error-free. Blogs, reddit, etc. are full of populist myths. But the blind squirrel occaisionally finds some nuts. Or an elephant. The CPI is the elephant.
  - maukdaddy 17y ago
    Economists did not lead the economy off a cliff, the financial firms did. Big difference.
    - bokonist 17y ago
      The economists at the Fed set the rules of the game (too big to fail, lender of last resort, Greenspan put) that rewarded increasing levels of irresponsibility over the last two decades. Firms have one directive: make money. The Fed has the directive of setting the rules so that financial firms make money from being productive, rather than living off the taxpayer. The Fed failed at this.
      - deleted 17y ago
        [deleted]
  - deleted 17y ago
    [deleted]
Tuna-Fish 17y ago
CPI doesn't categorically understate inflation, sometimes it shoots high, sometimes low. This is understandable, as turning something as complicated as inflation over all the goods and services bough in a country into a single number cannot exactly be simple. Lately, the index has arguably been understating inflation a little because the cost of living is going down, which pulls the index on the whole down even if the price of most of the essentials on it are going up. Then again, this can simply be considered wad -- cost of living is a very major household expense, even if most people who already own a house don't see the cost reductions on their balance sheet.
bokonist 17y ago
No, the Redditers are right. Well, more or less right. The CPI is entirely subjective. There is no objective way to measure quantitatively how much quality of a product has improved. More importantly, from an investment perspective what you care about is monetary dilution, not consumer prices. If the currency dilutes at 10% a year, and productivity grows at 7% a year, then CPI inflation would be a nice and easy 3%. But that dilution rate is really high. If you own a asset that dilutes at 2% (gold, stocks, oil, real estate), you'll earn a return of 8% a year. I really recommend this article for understanding the problems with CPI: http://unqualified-reservations.blogspot.com/2008/08/de-gustibus-non-computandum-or.html http://unqualified-reservations.blogspot.com/2008/08/de-gust...
- deleted 17y ago
  [deleted]
- deleted 17y ago
  [deleted]
- kdw 17y ago
  Okay, you win. I'll leave HN as well. I'm just a guy with a deep and abiding fascination with economics and public policy. One so deep I recently picked up a graduate degree on the subject. One so deep that my current startup is based entirely on my desire to help individuals better understand the financial possibilities that lie before them. But you've read a blog and some things on reddit, so clearly you understand it better than me. I'm sick of arguing with people like you... people who base their economic beliefs not on solid econometric analysis, but rather on mostly inaccurate blog posts... and yet you still mistake yourself for an expert. You win. I'm out of here too. I'm deleting my posts that are available for deletion, because the combined arrogance and ignorance of your response here makes clear that I was foolish for thinking that this could be a venue for informed discussion. I won't waste another second of my life "debating" well established knowledge with an idiot like you.
  - bokonist 17y ago
    Wow. You complain about me being "arrogant" and "ignorant" and then you make entirely false statements about my own background (a subject of which you know absolutely nothing). You then complain about the quality of this forum, and then are the first person in two years of commenting on Hacker News that has ever attacked me ad hominem. I suspect that you are reasonable person that is just especially frustrated by the generally low quality of internet commentary about economics ( I too no longer visit reddit, but that doesn't mean the people there are wrong about everything). But if that kind of language is common with you, I do hope that you leave Hacker News. I have had also had a long and deep fascination with economics and public policy. I've read dozens of books on finance and economics, from the original classics to more modern research. I've read hundreds of articles, I used to browse through social science libraries and download NBER papers for fun. I've had long and productive discussions with academic economists, people who work in finance and people who have worked in central banking. I don't claim to be omniscient about economics. But I have formed judgments, I state them plainly, and I welcome debate and hearing new arguments. I do not disagree with Keynesians or other mainstream folks because I am ignorant of their arguments. I disagree because I have evaluated them very carefully, read everything I could on the subject, and found their theories unconvincing. I would be happy to debate or back up either of the two claims I made ( "The CPI is not a good measure of inflation" and "The mainstream economists led the economy off a cliff"). If you want to read comments where I elaborate more, you can read a few I made elsewhere: http://www.newmogul.com/item?id=15334 http://www.newmogul.com/item?id=15334 or http://www.newmogul.com/item?id=12274 http://www.newmogul.com/item?id=12274 I would actually really like to debate them with a worthy opponent. I too find good economic debate very hard to find on the web.