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Inflation 'Documentary' Lacks Evidence

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posted on May, 15 2010 @ 07:37 AM

Inflation 'Documentary' Lacks Evidence

While purporting to be a documentary I have not seen many films that make more unsubstantiated claims all the while missing many basic economic concepts.

Using the unemployment rate as a measure of where the stock market should be trading is a complete misunderstanding of the dynamics that drive earnings per share growth over time.

the insanity of the US military having bases in 140 countries around the globe and spending $1 trillion a year to maintain them and continue to fight wars. As a
(visit the link for the full news article)

posted on May, 15 2010 @ 07:37 AM
A pretty amazing Video

Let's talk about the OP article though

The stock market has bounced not due to money printing, rather EPS has risen nicely rebounded aided by productivity enhancements and cost-cutting initiatives. Ultimately, revenue growth is necessary and will come with re-hiring as the economy turns around. Unemployment has, and always will be, a lagging indicator.

How is unemployement not a good indicator of the economy?
Aren't people the economy itself?

What Does Earnings Per Share - EPS Mean?
The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability.

Is this guy really using EPS as an indicator of the econmy?

Isn't that saying that the economy are not buyers but the sellers when the people far outnumber the sellers that are public companies?

Obama himself said

"Small businesses are the heart of the American economy," he said during an event attended by small business leaders at the White House. "They're responsible for half of all private sector jobs and they created roughly 70 percent of all new jobs in the past decade."

I don't see how that makes any sense and this is an article on iStockAnalyst on top of that!

They claim that if Americans were taxed 100% of their incomes, we would not be able to balance the budget. I have no idea where this claims comes from as our budget deficit is $1.6 trillion while US GDP over $14 trillion. Consumer spending is over $10 trillion of the US GDP all the while consumers are saving a portion of their income.

They are also becoming more and more sick and are forced to retire in mexico for healthcare or get medical help by flying over to India.
They want everyone saying "what inflation, prices for food didn't go up, what are you talking about?"
So they corner inflation in the healthcare industry, come on people just keep buying who cares if you get sick.

It's interesting how some people say who these mexicans are ruining our economy or these Indians are stealing jobs.
Note how much you will need their homeland in future, you might need it to stay alive because your govt. is ripping you off! Focus your anger on the correct entity!

They make an absolutely insane claim that Chinese children are better educated because there is no unemployment insurance or food stamps in the country. I can't even start on this one.

Oh please do
How does this make no sense?
Competition in the classroom doesn't mean more education, more studying? Of course this also has to do with overpopulation but is this guy defending being a welfare state?

Inflating an economy through central banking actions works to smooth out the pain over a longer period of time

Smooth out the pain for a "given" period of time, and then BOOM!

It's the bubble, consider a balloon.
You keep inflating the balloon because the ants(us) in front of it won't be able to withstand the pop, but it HAS to pop.
So instead of letting pop now you just keep inflating it(his smooth out the pain) but inevitably it will eventually pop.
Let it pop a small pop or a huge massive one?

Isn't it so simple?

Rather than allow for a deflationary spiral to take hold and a panicked run on the banks to crash the US economy into a depression,

What's wrong with wanting a small recession instead of a huge depression? How long can a country keep printing money out of thin air? Sky's the limit?

The video alleges that the US government artificially manipulates inflation data based on hedonics, the attempt to measure changes in value.

So, should the government not measure this crucial factor? A computer that allows someone to accomplish tasks with 20% greater productivity should be equivalent to a computer that allows 80% greater on a price comparison basis? The upward moves in prices must be adjusted for the increases in value. Yes, an egg is an egg is an egg over time but a computer is far from the same fundamental product.

I don't understand the author's analogy
Can someone explain it to me?

The FED propped up bad assets, thereby increasing it's value.
Shouldn't the people decide value in the economy through purchasing and basic free market principles?

I perhaps am not understanding his analogy
perhaps someone can shed some light.

This is filled with a great deal of hyperbole and not much substance

I must finish the video to see

Anyhow, i'm not an expert on economy
But hey, I do understand a little, perhaps someone here may understand more.
(visit the link for the full news article)

posted on May, 15 2010 @ 09:57 AM
His analogy is great! He must not realize that electronics prices have been slipping ( deflation) due to Japans sour economy and the price of an egg has doubled ( inflation).
I admit, I have only read through your excerpt, but - the article is even poor as an opinion peice.

Last night I made a bowl of soup for dinner. A friend stopped by so I added a bowl of water to the soup so we could both eat. Shortly after, another friend stopped by so - I added another bowl of water to the soup. We all ate but, the soup was less sustaining. I am not an economic scholar but I think the parable sufices.


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