tag:blogger.com,1999:blog-6616959642391988608.post3941224071624578141..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Thoughts on GDP and inflationScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-6616959642391988608.post-10689817936943134652011-10-02T09:41:07.400-07:002011-10-02T09:41:07.400-07:00The broad measure of inflation include energy and ...The broad measure of inflation include energy and energy costs have been coming down.<br /><br />Another issue is than banks are not creating credit. They are holding on to the $ on the balance sheet. The velocity of money (M2) has absolutely plummeted.Sentahttps://www.blogger.com/profile/05694504227940953703noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-36895864659840296462011-10-01T20:06:02.229-07:002011-10-01T20:06:02.229-07:00Gloeschi: I don't accept the inflation estimat...Gloeschi: I don't accept the inflation estimates of shadowstats. They are grossly exaggerated, and bear no relationship to reality, in my humble opinion.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-43960216249483452602011-10-01T11:16:42.285-07:002011-10-01T11:16:42.285-07:00I guess the official GDP is measured by first look...I guess the official GDP is measured by first looking at the nominal GDP, then subtracting the deflator. How reliable or realistic is that? What if instead we used the (higher) inflation rate from people like shadowstats? I guess real GDP growth would be much lower. What is your thinking? Thanks!Gloeschihttps://www.blogger.com/profile/10705125909506053628noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-2574142272701991832011-09-30T17:12:24.409-07:002011-09-30T17:12:24.409-07:00Peter: Government has added very little to this re...Peter: Government has added very little to this recovery. Loan guarantees and transfer payments (which account for about two thirds of federal spending) do not count towards GDP. Basically, only government expenditures for goods and services are counted. The private sector has definitely been carrying the water.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-74655326318025138062011-09-30T15:50:17.693-07:002011-09-30T15:50:17.693-07:00I would love to se a chart of GDP and its various ...I would love to se a chart of GDP and its various growth rates less the Government 20% portion of the number.<br /><br />What we really want to know is, Is the private sector growing. Throwing $500m at a CA solar manufacturer pumped up the GDP number but it was all air.<br /><br />Thanks Scott for an awesome blog. An oasis of sanity.<br /><br /><br />PeterAnonymoushttps://www.blogger.com/profile/04562741178312721354noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-11976496631304801422011-09-30T10:50:48.904-07:002011-09-30T10:50:48.904-07:00@Public
I would suggest that "you" have...@Public<br /><br />I would suggest that "you" have approval inflation, anything above 100% approval is pure inflation.<br /><br />Second, inflation is always a monetary phenomenon -- it really cannot be anything else. However, the Zimbabwee model (which is probably what you are thinking of) is not the problem in the U.S. it would be a problem if money was circulating in the economy -- Frozen in the Northhttps://www.blogger.com/profile/04901959687094626879noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-76027512055620647022011-09-30T10:29:06.546-07:002011-09-30T10:29:06.546-07:00Public Library--
The stats I see show Japan livin...Public Library--<br /><br />The stats I see show Japan living standards falling relative to American living standard since 1990. They have increasing income, but growing less quickly than the USA since then. Recently, they have come apart at the seams, of course.<br /><br />We could argue forever about culture values, structural impediments and much more. But since 1990, and the Bank of JapanBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-13076991346253877622011-09-30T10:24:38.794-07:002011-09-30T10:24:38.794-07:00I encourage everyone to read the Money Illusion bl...I encourage everyone to read the Money Illusion blog by Scott Sumner, or other bloggers associated with the "market monetarism" school. I really like a fellow named Nunes for his clear expository and use of charts.<br /><br />Market monetarists are Milton Friedmanites--and remember, Friedman advocated that the Bank of Japan print money back in the 1990s. <br /><br />If a nation has a Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-83020676906870548532011-09-30T10:22:08.453-07:002011-09-30T10:22:08.453-07:00Agree with Scott 110%.
Frozen, you can have infl...Agree with Scott 110%. <br /><br />Frozen, you can have inflation with 50% unemployment. Simply print dollars until the sun doesn't shine and you will see inflation.Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-5833464134567982692011-09-30T07:42:12.774-07:002011-09-30T07:42:12.774-07:00William: I have answered your question quite a few...William: I have answered your question quite a few times over the past year. In short, the Fed should raise rates. That would strengthen the dollar, send a powerful message of future dollar strength, punish speculators, increase investment, increase confidence, reduce uncertainty and generally be a big boost to the economy. And of course savers would also benefit.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-53240766386986458822011-09-30T05:40:59.109-07:002011-09-30T05:40:59.109-07:00Let's face it, the unemployment catatrophe in ...Let's face it, the unemployment catatrophe in the US is now real and likely permanent, at least through 2025 or beyond -- those in America who hope to prosper through their working careers would be well-advised to think "outside the box" (i.e., "outside the US") -- I would add that US monetary and fiscal policy alike are pursuing "extend and pretend" strategies McKibbinUSAhttps://www.blogger.com/profile/10545798495680527622noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-69878877762212656952011-09-30T05:09:18.726-07:002011-09-30T05:09:18.726-07:00Scott:
Talking of stagflation when inflation is a...Scott:<br /><br />Talking of stagflation when inflation is around the "historical level" of the past 10 years -- sounds like wishful thinking on your part.<br /><br />You need a long term trend of rising inflation to talk about stagflation (although I agree with the "Stag" bit). More importantly, with U3 at 9% and U6 at 16%, and America being mostly a service economy, I don&#Frozen in the Northhttps://www.blogger.com/profile/04901959687094626879noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-43414271005296068652011-09-29T20:43:15.130-07:002011-09-29T20:43:15.130-07:00Scott Grannis wrote:
"This is just one more ...<b>Scott Grannis</b> wrote:<br /><br />"This is just one more way of saying that the Fed's efforts to stimulate the economy with easy money and artificially low interest rates are more likely to stimulate inflation than they are to stimulate real growth."<br /><br /><b>Scott</b> - given your economic theory, what would you expect to happen if the Federal Reserve raised their FederalWilliamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-10461529176327074822011-09-29T20:42:45.866-07:002011-09-29T20:42:45.866-07:00Scott, saw an interesting interview that speaks to...Scott, saw an interesting interview that speaks to this topic on Wealthtrack this past weekend (available for viewing at wealthtrack.com) with Francois Trahan. He makes the case that with fed funds near zero the Feds effectiveness is greatly reduced and that QE2 was a major mistake on the Fed's part since it resulted in a much weaker dollar and a rise in inflation, this inflation was quickly jjhttps://www.blogger.com/profile/00382970468577051096noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-7820712770231315802011-09-29T20:13:41.365-07:002011-09-29T20:13:41.365-07:00Very good piece.
Benj you need to better underst...Very good piece. <br /><br />Benj you need to better understand this concept. The Fed can push nominal GDP to whatever level they want via inflation/money printing. However, as the charts show, real growth is what truly matters. People are not fooled by nominal GDP.<br /><br />In terms of real growth, Japanese standards of living have been rising. Just because inflated GDP is not going anywhere Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.com