[quote=sdduuuude]
I appreciate the point that it is the kind of inflation that matters, but I’m not so sure it is what most would consider inflation.
I’m giving you a hard time because it is not a useful prediction. After three years, certainly some things will rise in price while others will fall. With a prediction like “the things people need that are scarce will inflate” you can’t go wrong (and I’m not so sure that really constitutes a general “inflation” call). [/quote]
That’s not what I said. I gave three different categories of things that I think will inflate (the implication was for Americans, though I don’t think I mentioned that):
– things people need
– things that are scarce
– things that are globally traded
This is not what you you say in your paraphrased quote of me. Sorry if I wasn’t clear, but now that I’ve cleared it up, I hope that you can see that this isn’t the tautology you are implying. There are plenty of people who disagree with this so I don’t really see how you can position it as being an obvious or “can’t go wrong” statement
As for whether it constitutes a “general inflation call”… why would I care about that? I’m not interested in labels, I’m interested in trying to figure out what will happen.
[quote]
List the specific things that will inflate and the specific things that won’t and specific things that will deflate – get it right and I’ll be impressed.
[/quote]
Inflate more (this is all for Americans using dollars, and it is over a multiple-year timeframe… this is not a short term forecast):
– energy
– food
– imports
– healthcare
– hard assets
[quote]
But saying “the things people need that are scarce will inflate” deserves me giving you a hard time because as soon as you start picking a specific basket of goods instead of a general basket of goods, you are talking about something other than inflation. You are then talking about specific commodity prices.
[/quote]
No, I am talking about a rise in the costs that matter most to people. If the price of everything you need rises by 10%, and the price of everything you could buy but don’t need drops by 10%, that’s not a wash.
Price movements in the things that people need are more important in aggregate. And in the end, when it comes to whether people feel there is inflation or not, I believe they will look at what is happening with the things that they need. I agree that this might not come through in the CPI, and a lot of people pay attention to that, but if the most important things they buy keep going up and up, I suspect that they will start to discount the importance of the CPI over time.
