tag:blogger.com,1999:blog-816559531110064247.post859237136761072601..comments2024-03-08T01:03:44.522-08:00Comments on Humble Student of the Markets: Inflation, here is thy stingCam Hui, CFAhttp://www.blogger.com/profile/09672203690656029787noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-816559531110064247.post-62634444981395581092010-12-20T02:12:55.380-08:002010-12-20T02:12:55.380-08:00Good post!
There are lots of things that could ...Good post! <br /><br />There are lots of things that could be said, but the one point I would like to make is regarding inflation. I don't have a reference for this but my understanding is that during the 90s the inflation calculations in the United States were modified such that the new calculations presented a significantly lower level of inflation than before the revisions. This is not necessarily a concern if it was done properly. However, I have always wondered if there was a bit of political influence to try and make the numbers look good by making inflation look better than it actually was. Or perhaps circumstances that lead to the revision have now reverted to what they were previous and the revision is no longer appropriate. Either of these scenarios would result in understating inflation and provide false re-assurance to economists. I am not aware if there are other measures of inflation apart from the government's published numbers, but long-term numbers from a different source would make an interesting comparison.<br /><br />If there really exists a stealthy inflation that economists are not aware of it then there is the potential for some less desirable outcomes in future economic scenarios. Perhaps commodities can provide a more reliable measure of inflation than government numbers since commodity prices are more transparent. Knowing the importance of commodities to a given economy would then enable another measure of inflation to be calculated.<br /><br />It's not good to apologize during a presentation, but here goes.... I'm not an economist so this is just my humble understanding. Hopefully this adds something to the discussion.Gee-offhttps://www.blogger.com/profile/04214160488897287102noreply@blogger.com