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ParticipantI think the core question, which still hasn’t been answered, except perhaps indirectly:
Do the numbers indicate anything special about the banking system, beyond simply that funds are being borrowed from the TAF?
ParticipantI think the core question, which still hasn’t been answered, except perhaps indirectly:
Do the numbers indicate anything special about the banking system, beyond simply that funds are being borrowed from the TAF?
ParticipantRegarding core versus headline inflation, again, I think the rationale was to remove the volatility that food and energy prices presented.
The theory is that expectations of inflation tend to be self reinforcing – that is, expecting inflation leads people to spend earlier, increasing the money velocity, which increases the money supply, creating inflation. Therefore, if people are not expecting “core” spending categories to increase in price, they will not create inflation in those categories. Therefore, since the “core” inflation was generally more stable, it reduced people’s inflation expectations and thus created less inflation.
From a simple perspective, however, excluding a category of spending doesn’t make sense, because excluding a category of spending, even a volatile one, misstates the inflation of the remainder of the categories – if a certain money supply is being increasingly directed toward rising energy costs, then the prices of the remainder of the categories ought to go down. More money spent on gas means less money available for household furnishings, so higher gas prices ought to lead to lower household furnishings prices.
Note that expectations of deflation are also self perpetuating. Expecting prices to fall discourages spending, reduces money velocity, and so shrinks the money supply.
ParticipantRegarding core versus headline inflation, again, I think the rationale was to remove the volatility that food and energy prices presented.
The theory is that expectations of inflation tend to be self reinforcing – that is, expecting inflation leads people to spend earlier, increasing the money velocity, which increases the money supply, creating inflation. Therefore, if people are not expecting “core” spending categories to increase in price, they will not create inflation in those categories. Therefore, since the “core” inflation was generally more stable, it reduced people’s inflation expectations and thus created less inflation.
From a simple perspective, however, excluding a category of spending doesn’t make sense, because excluding a category of spending, even a volatile one, misstates the inflation of the remainder of the categories – if a certain money supply is being increasingly directed toward rising energy costs, then the prices of the remainder of the categories ought to go down. More money spent on gas means less money available for household furnishings, so higher gas prices ought to lead to lower household furnishings prices.
Note that expectations of deflation are also self perpetuating. Expecting prices to fall discourages spending, reduces money velocity, and so shrinks the money supply.
ParticipantRegarding core versus headline inflation, again, I think the rationale was to remove the volatility that food and energy prices presented.
The theory is that expectations of inflation tend to be self reinforcing – that is, expecting inflation leads people to spend earlier, increasing the money velocity, which increases the money supply, creating inflation. Therefore, if people are not expecting “core” spending categories to increase in price, they will not create inflation in those categories. Therefore, since the “core” inflation was generally more stable, it reduced people’s inflation expectations and thus created less inflation.
From a simple perspective, however, excluding a category of spending doesn’t make sense, because excluding a category of spending, even a volatile one, misstates the inflation of the remainder of the categories – if a certain money supply is being increasingly directed toward rising energy costs, then the prices of the remainder of the categories ought to go down. More money spent on gas means less money available for household furnishings, so higher gas prices ought to lead to lower household furnishings prices.
Note that expectations of deflation are also self perpetuating. Expecting prices to fall discourages spending, reduces money velocity, and so shrinks the money supply.
ParticipantRegarding core versus headline inflation, again, I think the rationale was to remove the volatility that food and energy prices presented.
The theory is that expectations of inflation tend to be self reinforcing – that is, expecting inflation leads people to spend earlier, increasing the money velocity, which increases the money supply, creating inflation. Therefore, if people are not expecting “core” spending categories to increase in price, they will not create inflation in those categories. Therefore, since the “core” inflation was generally more stable, it reduced people’s inflation expectations and thus created less inflation.
From a simple perspective, however, excluding a category of spending doesn’t make sense, because excluding a category of spending, even a volatile one, misstates the inflation of the remainder of the categories – if a certain money supply is being increasingly directed toward rising energy costs, then the prices of the remainder of the categories ought to go down. More money spent on gas means less money available for household furnishings, so higher gas prices ought to lead to lower household furnishings prices.
Note that expectations of deflation are also self perpetuating. Expecting prices to fall discourages spending, reduces money velocity, and so shrinks the money supply.
ParticipantRegarding core versus headline inflation, again, I think the rationale was to remove the volatility that food and energy prices presented.
The theory is that expectations of inflation tend to be self reinforcing – that is, expecting inflation leads people to spend earlier, increasing the money velocity, which increases the money supply, creating inflation. Therefore, if people are not expecting “core” spending categories to increase in price, they will not create inflation in those categories. Therefore, since the “core” inflation was generally more stable, it reduced people’s inflation expectations and thus created less inflation.
From a simple perspective, however, excluding a category of spending doesn’t make sense, because excluding a category of spending, even a volatile one, misstates the inflation of the remainder of the categories – if a certain money supply is being increasingly directed toward rising energy costs, then the prices of the remainder of the categories ought to go down. More money spent on gas means less money available for household furnishings, so higher gas prices ought to lead to lower household furnishings prices.
Note that expectations of deflation are also self perpetuating. Expecting prices to fall discourages spending, reduces money velocity, and so shrinks the money supply.
ParticipantDWCAP are you asking about “core” inflation, which excludes volatile food and energy prices? If so, the rationale for excluding those items was to provide a more reasonable measure of inflation, or the comparison of the money supply to economic productivity. But when food and energy prices consistently move in one direction, they cannot be ignored forever.
ParticipantDWCAP are you asking about “core” inflation, which excludes volatile food and energy prices? If so, the rationale for excluding those items was to provide a more reasonable measure of inflation, or the comparison of the money supply to economic productivity. But when food and energy prices consistently move in one direction, they cannot be ignored forever.
ParticipantDWCAP are you asking about “core” inflation, which excludes volatile food and energy prices? If so, the rationale for excluding those items was to provide a more reasonable measure of inflation, or the comparison of the money supply to economic productivity. But when food and energy prices consistently move in one direction, they cannot be ignored forever.
ParticipantDWCAP are you asking about “core” inflation, which excludes volatile food and energy prices? If so, the rationale for excluding those items was to provide a more reasonable measure of inflation, or the comparison of the money supply to economic productivity. But when food and energy prices consistently move in one direction, they cannot be ignored forever.
ParticipantDWCAP are you asking about “core” inflation, which excludes volatile food and energy prices? If so, the rationale for excluding those items was to provide a more reasonable measure of inflation, or the comparison of the money supply to economic productivity. But when food and energy prices consistently move in one direction, they cannot be ignored forever.
ParticipantCome to think of it, I did the same thing: I drilled some nice 3/8″ holes in the wall to hang my plasma. I also tore out some plants and put in some new ones.
I know for sure I will have to patch the holes in the wall when I leave, but – I would really feel it is in my best interest to fix up a place I am selling! I put a lot of work into the house I sold.
Renting is really not that different from buying, just a bit more liquid. You have an incentive to not do value-added improvements, but then again, maybe that is a good thing, because most improvements lose money anyway!
ParticipantCome to think of it, I did the same thing: I drilled some nice 3/8″ holes in the wall to hang my plasma. I also tore out some plants and put in some new ones.
I know for sure I will have to patch the holes in the wall when I leave, but – I would really feel it is in my best interest to fix up a place I am selling! I put a lot of work into the house I sold.
Renting is really not that different from buying, just a bit more liquid. You have an incentive to not do value-added improvements, but then again, maybe that is a good thing, because most improvements lose money anyway!
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