Inflation turns negative, falls below zero for first time in 15 years at -0.3 per cent

I found this article while I was checking my emails on yahoo. According to the government the numbers for inflation are going down not up. This has got to disinfo at it's best, I can tell you right now that everything costs more now than it did a year ago. When I was buying groceries a few days ago it cost me 130.00 bucks for only half a cart full.


Link to Story:
ca.news.finance.yahoo.com...

This is an article from Canada and I agree CAD is getting stronger. You should be happy that your CAD buys more. Should be traveling to US.

Grocery cart full of what. high quality beef or cereal.. it's not a really good measurement.

reply to post by kenji4861


Full of mostly meat, vegtables and frozen items there were some things like canned soda and junk food. But inflation maybe down here but that doesn't mean that the grocery chains haven't boosted their prices to make up for (lack of people who lost there jobs in Canada and can't afford much) the loss in sales.

[edit on 7/17/2009 by Big Oil]

out here in Calif i am paying over $60 more a month more since the first of the year in taxes alone.

how can inflation be negative but everything cost more because businesses are passing on the new higher taxes.

reply to post by kenji4861


In Canada, we are like Japan. We need a ``lower`` canadian dollar because half of our economy is exportations to the USA.

If our dollar is too strong, we are losing jobs.

Japan since the early 90s has been experiencing general deflation. Prices for almost everything are much cheaper than they were 15 years ago. The US could certainly go the same way; for much of the 19th century there was great price stability in the US.

Originally posted by ANNED
out here in Calif i am paying over $60 more a month more since the first of the year in taxes alone.

how can inflation be negative but everything cost more because businesses are passing on the new higher taxes.

That was Canada.

In the US Inflation is still positive (Consumer Price Index) meaning goods and services are rising. The amount of cash in peoples hands and the value to which they can purchase with those Dollars is dropping.

This is why in the US we dont count energies and foodstuffs in our inflation numbers.

Because they can heavily bias the numbers out of the realm of factual reality.

Originally posted by smirkley
This is why in the US we dont count energies and foodstuffs in our inflation numbers.

Because they can heavily bias the numbers out of the realm of factual reality.

This is fact. Fuel, Food, and Service costs are not part of the inflation math.

Originally posted by smirkley
This is why in the US we dont count energies and foodstuffs in our inflation numbers.

Because they can heavily bias the numbers out of the realm of factual reality.

Actually the reason is "Volatility" .. Food and Energy are more susceptible to change in more rapid time than consumer items. However, it's a bunch of BS.

The average Households MAIN two expenses are 1. Food and 2. energy. After the Mortgage Payment, nothing consumes more of our paycheck.

If you add Food and Energy into the Inflation/Deflation numbers it more accurately details the rise and fall of expendable income, and thus the inflation/deflation of consumer purchasing power. Considering the incredible importance of these prices, you would think they would be factored in somehow? Well they are, technically, there is another reading that includes CPI+Food/Energy .. however like the "Real Unemployment" numbers they are kept under the rug and never reported.

the inflation deflation debate is funny to me because it is nonsensical to argue often because

most investors are thinking about it regarding asset prices

while most regular people think about the prices they pay for goods

and some others think about it regarding the total supply of money ....and among this group some include credit and some don't and some have different definitions of credit and money

with that being said CPI is probably manipulated (in it's inherent formula) to downplay the cost of living expenses in order to limit the amount the GOV'T has to pay out to those who are compensated for increases

90% of economists and analysts work for large corporations, which more often than not are run by Elites.

Manipulation is the order of the day.

Originally posted by cpdaman
.....CPI is probably manipulated (in it's inherent formula) to downplay the cost of living expenses in order to limit the amount the GOV'T has to pay out to those who are compensated for increases

Roger that. Manipulate the costs of inflation indexed payouts to gubmn't entitlements programs and bond holders.

CPI: Payments to Social Security Recipients Should be Double Current Levels


Worthwhile podcast with former Atlanta Fed director.....

July 16 (Bloomberg) -- Robert Eisenbeis, former research director at the Federal Reserve Bank of Atlanta, talks with Bloomberg's Tom Keene about the need for Fed independence, U.S. monetary and fiscal policy, and risks of inflation.

Eisenbeis Sees Need for Independent Fed, Feasible Exit Strategy
(Duration: 30:24 , Format: *.MP4)

Recommend the full interview..or..fast fwd to the 20min mark to learn why Eisenbeis isn't concerned about deflation....very concerned about looming inflation. Fed conundrum: Timing , and no practical means of draining unprecedented amounts of liquidity.

Originally posted by OBE1

Originally posted by cpdaman
.....CPI is probably manipulated (in it's inherent formula) to downplay the cost of living expenses in order to limit the amount the GOV'T has to pay out to those who are compensated for increases

Roger that. Manipulate the costs of inflation indexed payouts to gubmn't entitlements programs and bond holders.

CPI: Payments to Social Security Recipients Should be Double Current Levels


Worthwhile podcast with former Atlanta Fed director.....

July 16 (Bloomberg) -- Robert Eisenbeis, former research director at the Federal Reserve Bank of Atlanta, talks with Bloomberg's Tom Keene about the need for Fed independence, U.S. monetary and fiscal policy, and risks of inflation.

Eisenbeis Sees Need for Independent Fed, Feasible Exit Strategy
(Duration: 30:24 , Format: *.MP4)

Recommend the full interview..or..fast fwd to the 20min mark to learn why Eisenbeis isn't concerned about deflation....very concerned about looming inflation. Fed conundrum: Timing , and no practical means of draining unprecedented amounts of liquidity.

around minute 22 he cited the FOMC statement and how that over the next year the fed gave a broad range for unemployment......also stated the economy would be lucky to see minimal growth i.e at best just getting out of negative growth....and then he says no real threat of inflation on horizon.......and he goes on to say given these circumstances.....he doesn't see how fed will be able to do away with these liquidity programs in this period because that would obviously be difficult to do when the economy still hasn't had much of a convincing recovery........but then he goes on to say that only 10% of fiscal stimulus has gone into effect and there is "potential" for inflation expectations to be "unanchored" and then see high inflation in the following years......i think this is based on a enviornement where banks eventually start lending again......this is a couple years out it appears......he even said as much......no?

i would believe that either they themselves give too much credit to B. Bernanke's inflation producing abilities perhaps due to the fact that the Consumer model of the economy that has existed since the early 70's is the reason why inflation (usually of the asset-price variety) has been able to be fueled thru debt growth when ever they have seemed to need it........and they don't want to admit we are in a Depressionary process .....or that perhaps they are just talking up inflation to get people to SPEND....since managing future expectations is part of the fed's job.......or perhaps they just think the banks will be strong and see there bad debts written off or rise in value as they hold them to maturity.......holding bad debts on books at artificially high values impairs banks lending abilities ....combine this with a piss poor employment and small business enviornement and banks will not be lending much soon....if he's talking about a weak dollar and consumer price inflation then perhaps that can increase in the next couple years but i don't see banks lending and or people taking on the kind of debt that fuels general asset price inflations

[edit on 18-7-2009 by cpdaman]

Eisenbeis clearly voices his inflationary concerns...goes-on to reference inflation lag...a "variable lag". Six mo? 1yr? 2yrs? Impossible to pin. Does it matter ? The goal is to maximize profits by identifying policy direction/price trends.....early , e.g. smart money moving into Gold 2001/2002. Alternative: Am I too late @ $940 Not a position I envy.

The eventual need to suppress dollar demand (bye-bye ZIRP)...but when ? Certainly not in a significantly weakened economy if the politicos have their say...and they will. Drain liquidity...when ? In time to avoid a significant outbreak of inflation ?...and how exactly...what entity in their right mind is gonna take 2 trillion in rotten assets off the Fed balance sheet at par?

Sterilize a % of those roach-infested Fed acquisitions through the issuance of additional treasury debt? I don't think so.

Translation: No practical exit strategy.

Total Gov’t/Fed stimulus committed (to date): 13 trillion. By Eisenbeis estimate , only 10% has entered the system...that leaves 90% to follow

The take away imo: Fed's been firing nuclear volleys in the dark....risky biz.

$USDX threatening .7900 , crude back on the move. Maybe an deflationist can explain ?

Extreme energy buildup in the recently trending Gold price has my nose twitching tonight.