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(former)FormerSanDiegan
ParticipantWhat would rent be for similar units ?
August 22, 2008 at 5:12 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260261ParticipantCommodity prices reflect the acceleration in inflation. Not a direct 1:1 correspondence.
Think second derivative from calculus.
Or, for those remedial math types, the change in slope of the curve.
For example, if inflation goes from 2% to 6%, commodities might rise by 100% or more over a short period, depending on how fast this change in inflation occurs.
Oil declined 68% from 1980 to 1998.
Did we experience 68% deflation in prices over this period ?
No, we experienced a decline in the rate of inflation.
I rest my case.
August 22, 2008 at 5:12 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260459ParticipantCommodity prices reflect the acceleration in inflation. Not a direct 1:1 correspondence.
Think second derivative from calculus.
Or, for those remedial math types, the change in slope of the curve.
For example, if inflation goes from 2% to 6%, commodities might rise by 100% or more over a short period, depending on how fast this change in inflation occurs.
Oil declined 68% from 1980 to 1998.
Did we experience 68% deflation in prices over this period ?
No, we experienced a decline in the rate of inflation.
I rest my case.
August 22, 2008 at 5:12 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260470ParticipantCommodity prices reflect the acceleration in inflation. Not a direct 1:1 correspondence.
Think second derivative from calculus.
Or, for those remedial math types, the change in slope of the curve.
For example, if inflation goes from 2% to 6%, commodities might rise by 100% or more over a short period, depending on how fast this change in inflation occurs.
Oil declined 68% from 1980 to 1998.
Did we experience 68% deflation in prices over this period ?
No, we experienced a decline in the rate of inflation.
I rest my case.
August 22, 2008 at 5:12 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260517ParticipantCommodity prices reflect the acceleration in inflation. Not a direct 1:1 correspondence.
Think second derivative from calculus.
Or, for those remedial math types, the change in slope of the curve.
For example, if inflation goes from 2% to 6%, commodities might rise by 100% or more over a short period, depending on how fast this change in inflation occurs.
Oil declined 68% from 1980 to 1998.
Did we experience 68% deflation in prices over this period ?
No, we experienced a decline in the rate of inflation.
I rest my case.
August 22, 2008 at 5:12 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260558ParticipantCommodity prices reflect the acceleration in inflation. Not a direct 1:1 correspondence.
Think second derivative from calculus.
Or, for those remedial math types, the change in slope of the curve.
For example, if inflation goes from 2% to 6%, commodities might rise by 100% or more over a short period, depending on how fast this change in inflation occurs.
Oil declined 68% from 1980 to 1998.
Did we experience 68% deflation in prices over this period ?
No, we experienced a decline in the rate of inflation.
I rest my case.
August 22, 2008 at 4:52 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260251ParticipantStocks did outpace inflation from 2003-2007.
… even if you use shadowstats estimates of CPI which averaged 6 to 7% in this period.
Even if you used shadowstats projected M3 money supply growth, stocks outpaced that.
Your mistake is assuming that commodity prices correspond 1:1 to inflation. They do not.
August 22, 2008 at 4:52 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260449ParticipantStocks did outpace inflation from 2003-2007.
… even if you use shadowstats estimates of CPI which averaged 6 to 7% in this period.
Even if you used shadowstats projected M3 money supply growth, stocks outpaced that.
Your mistake is assuming that commodity prices correspond 1:1 to inflation. They do not.
August 22, 2008 at 4:52 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260460ParticipantStocks did outpace inflation from 2003-2007.
… even if you use shadowstats estimates of CPI which averaged 6 to 7% in this period.
Even if you used shadowstats projected M3 money supply growth, stocks outpaced that.
Your mistake is assuming that commodity prices correspond 1:1 to inflation. They do not.
August 22, 2008 at 4:52 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260507ParticipantStocks did outpace inflation from 2003-2007.
… even if you use shadowstats estimates of CPI which averaged 6 to 7% in this period.
Even if you used shadowstats projected M3 money supply growth, stocks outpaced that.
Your mistake is assuming that commodity prices correspond 1:1 to inflation. They do not.
August 22, 2008 at 4:52 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260548ParticipantStocks did outpace inflation from 2003-2007.
… even if you use shadowstats estimates of CPI which averaged 6 to 7% in this period.
Even if you used shadowstats projected M3 money supply growth, stocks outpaced that.
Your mistake is assuming that commodity prices correspond 1:1 to inflation. They do not.
August 22, 2008 at 3:06 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260171ParticipantI don’t disagree with your conclusions.
I disagree with the statement that an 80% gain is actually a loss because it grew slower than an alternative investment in commodities.
The use of commodities as a true measure of constant value is an attractive concept, especially over the long run (e.g. 50 years or more). The problem is that commodity prices are volatile, have very long cycles (e.g. 20 years) and can create a distorted view of inherent value specifically because of the factor you describe as “liquidity flowing to historically safe havens.”
August 22, 2008 at 3:06 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260370ParticipantI don’t disagree with your conclusions.
I disagree with the statement that an 80% gain is actually a loss because it grew slower than an alternative investment in commodities.
The use of commodities as a true measure of constant value is an attractive concept, especially over the long run (e.g. 50 years or more). The problem is that commodity prices are volatile, have very long cycles (e.g. 20 years) and can create a distorted view of inherent value specifically because of the factor you describe as “liquidity flowing to historically safe havens.”
August 22, 2008 at 3:06 PM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #260380ParticipantI don’t disagree with your conclusions.
I disagree with the statement that an 80% gain is actually a loss because it grew slower than an alternative investment in commodities.
The use of commodities as a true measure of constant value is an attractive concept, especially over the long run (e.g. 50 years or more). The problem is that commodity prices are volatile, have very long cycles (e.g. 20 years) and can create a distorted view of inherent value specifically because of the factor you describe as “liquidity flowing to historically safe havens.”
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