Chances of losing (and winning!) are close to zero.

[Kshartle]

Lowe is correct. The Fed can't legally print to pay down Treasury debt — the Fed can only buy (i.e. monetize) debt, via swaps with banks. The Treasury can only issue more debt-based currency when it "prints". When Harry Browne and others say that a fiat government can always "print" they are referring to printing debt-based money (which causes more debt to be created).

This is a dead-end discussion for us. The conclusion will be the disagreement over whether or not when the FED creates new dollars and buys bonds it is devaluing the dollar. We've reached this so many times I'd rather just skip to it and call it done.

How about the trillion dollar coin? Can the gubmit mint 18 trillion dollar coins and devalue/pay off it's direct debt?

The government can't really "print away its debt," because its money is debt (assuming you deem the Fed to be a public entity).  It's literally trading one government liability for another.  Just different "agencies" if you will.

It can't make the trillion dollar coin?

Listen, the government can force people into it's armies, steal people's property, throw people in cages, invade countries.

If you it's own laws will prevent it from printing slips of paper to pay it's debts........you believe in something I do not. I might be wrong. Maybe the government can do all those other things but cannot print dollars if it concludes it is neccessary.

If the problem is you think they can't sell the concept to the public then you put a lot of faith in the Americans. These are the same people who believed in huge numbers that Saddam Hussain blew up the twin towers two years after planes hit them. The Americans are STUPID.

All that being said I think the goverment will not print but the FED will continue.

[Lowe]

Or it can print money to pay the debts. Of course it can devalue it's debts. It is doing this non-stop.

I don't understand how either of the roads you mention devalue the debt.

Theoretically they could do that, because they write the laws.  However in developed countries I don't think they do that.

Only the national banks print money, but they only use it to buy bonds.  So it ends up in the accounts of large banks, who don't care whether it's there or not, and aren't going to change their business based on it.  So it won't cause inflation.

So we're back to the two fiscal tools I mentioned, and the same conundrum.

What about that trillion dollar coin?

Laws aren't a big problem for the gumbit since it writes, passes, and enforces them. Rules are for the ruled not the rulers.

Well, the trillion dollar coin hasn't happened.

It's true that gov't officials tend to follow different rules than citizens.  H/e you seem to imply they aren't constrained.  They are.  The public sector is an ecosystem of competing interests.  Elected and appointed officials have their own fiefdoms, which they protect and try to expand.  They are constrained by one another's efforts.

They cannot do whatever they want, including make platinum coins.  Treasury officials might think it's a wonderful idea, because it makes their lives easier.  H/e the executive branch thinks it's a terrible idea, because it will reduce their prestige, which is a lifelong investment for a public official.

[Kshartle]

KShartle, there wouldn't be any point to trading the national debt for a few shiny coins (other than to skirt around the debt ceiling). Treasuries are savings assets for the private sector. Banks and citizens prefer Treasury bonds to cash when they are trying to save. That's why grandmas buy Savings Bonds.

Anyway, Lowe's assertion still stands. You're just avoiding the question.

What question am I avoiding? It's possible I didn't understand it.

Grandma buys savings bonds for interest payments. Do you think the government borrows money to give grandma an asset?    Ohhhh please, they borrow her asset to make welfare payments and live in mansions. Please, your statement must have been for comedy.

What question am I avoiding?

[moda0306]

KShartle, there wouldn't be any point to trading the national debt for a few shiny coins (other than to skirt around the debt ceiling). Treasuries are savings assets for the private sector. Banks and citizens prefer Treasury bonds to cash when they are trying to save. That's why grandmas buy Savings Bonds.

Anyway, Lowe's assertion still stands. You're just avoiding the question.

What question am I avoiding? It's possible I didn't understand it.

Grandma buys savings bonds for interest payments. Do you think the government borrows money to give grandma an asset?    Ohhhh please, they borrow her asset to make welfare payments and live in mansions. Please, your statement must have been for comedy.

What question am I avoiding?

Why does the governmnt play in the bond market at all if it can print money? 

[Kshartle]

H/e you seem to imply they aren't constrained.  They are.

Of course they are constrained.....just not by their laws. It is at most a speed bump since no one can arrest the federal government for breaking it's own laws and since it changes laws constantly and enforces them.

You stated that it was law that prevented the government from printing. If that's the constraint then we might as well not even consider it.

That's like saying I can't eat ice cream because I swore I'm on a diet.

[Gumby]

H/e you seem to imply they aren't constrained.  They are.

Of course they are constrained.....just not by their laws. It is at most a speed bump since no one can arrest the federal government for breaking it's own laws and since it changes laws constantly and enforces them.

You stated that it was law that prevented the government from printing. If that's the constraint then we might as well not even consider it.

That's like saying I can't eat ice cream because I swore I'm on a diet.

Every developed nation on the face of the planet uses debt-based money. It's just the way it is because Banks and citizens want to own debt in order to save and earn interest. You can certainly argue that they can all change the way they issue the bulk of their currency into pure fiat, but then you completely miss the fact that the debt plays a role in the developed world's monetary systems.

[Kshartle]

KShartle, there wouldn't be any point to trading the national debt for a few shiny coins (other than to skirt around the debt ceiling). Treasuries are savings assets for the private sector. Banks and citizens prefer Treasury bonds to cash when they are trying to save. That's why grandmas buy Savings Bonds.

Anyway, Lowe's assertion still stands. You're just avoiding the question.

What question am I avoiding? It's possible I didn't understand it.

Grandma buys savings bonds for interest payments. Do you think the government borrows money to give grandma an asset?    Ohhhh please, they borrow her asset to make welfare payments and live in mansions. Please, your statement must have been for comedy.

What question am I avoiding?

Why does the governmnt play in the bond market at all if it can print money?

I don't know the history well enough to provide a good answer. I know of several instances such as the continetals, greenbacks, certainly the confederacy where the government having control of the presses lead to their FIAT money becoming worthless. This experience no doubt made earlier generations resistant to the government having control of the presses. I wouldn't count on the Americans knowing enough to maintain that going forward.

Imagine a candidate running on a platfrom that he can just hand out goodies buy printing up the money. How many elections are we away from a majority believing him? Two? Three? How about a war or national emergency?

I don't know enough about the self-imposed check or how it came about to arrive at the current situation of FED control over the base money supply.

I don't know if legislation has been proposed in congress to get the government in the printing business in the last 100 years or why it might have been defeated.

It is clearly self-imposed though since they have armies and prisons and the FED and population do not.

Do you have a theory?

[Lowe]

@ moda

Are you sure that inaccurate inflation figures would affect the Debt/GDP ratio?  I don't understand this.  If value per dollar figure is lower than realized, that means both debt value and GDP value are lower than realized, but lower by the same proportion.  Making debt/GDP the same.

Lowe,

We KNOW what the debt is in nominal terms today.  What is tougher to measure is GDP in nominal terms (you have to measure the quantity/nature of transactions).

If inflation has been far higher than reported, then nominal GDP, compared to 10 years ago (or 15, or 20... whatever) is also far higher.

I still don't understand this.  The CPI is used in the algorithm to estimate nominal GDP?

[Gumby]

Do you have a theory?

There is no "theory." This is history. The idea of a "National Debt" was invented by the Second Bank of England in 1694. The bank wanted to get rid of fiat tally sticks that worked very well for 726 years in order to earn perpetual interest off the government and people's own credit. Colonists wanted to depart from that and issued their own script (rather than relying on banks to do all the heavy lifting) but they overissued it.

[Kshartle]

Do you have a theory?

There is no "theory." This is history. The idea of a "National Debt" was invented by the Second Bank of England in 1694. The bank wanted to get rid of fiat tally sticks that worked very well for 726 years in order to earn perpetual interest off the government and people's own credit. Colonists wanted to depart from that and issued their own script (rather than building banks) but they overissued it.

You think this is why the US government borrows money?

[moda0306]

Lowe,

Not per se, but GDP growth consists of real growth, and nominal growth.  If we're way off on our price-level measurements since last-decade, we have to decide whether our GDP measurement is correct as well.  Either our nominal number is way off, or our real number is way off.  All you have to do is look at the "stuff" our economy produces to know that our real GDP is significantly higher than 1998 or whatever.

The easier one really is the "welfare state" stuff.  The constant cries about increases in spending of our federal government, or the increases in debt, or welfare, or whatever, if adjusted for a 5% real rate of inflation, become pretty laughable.

[Gumby]

Do you have a theory?

There is no "theory." This is history. The idea of a "National Debt" was invented by the Second Bank of England in 1694. The bank wanted to get rid of fiat tally sticks that worked very well for 726 years in order to earn perpetual interest off the government and people's own credit. Colonists wanted to depart from that and issued their own script (rather than building banks) but they overissued it.

You think this is why the US government borrows money?

Yes. It's why all developed governments "borrow" their own money. National banks all copied the charter of the Bank of England.

The first ever government bond was issued by the Bank of England in 1693 to raise money to fund a war against France.

Source: http://en.wikipedia.org/wiki/Government_bond

The Bank of England literally created the idea of a "national debt". Up until that day, fiat Tally Sticks had worked just fine for over 700 years.

[moda0306]

Do you have a theory?

There is no "theory." This is history. The idea of a "National Debt" was invented by the Second Bank of England in 1694. The bank wanted to get rid of fiat tally sticks that worked very well for 726 years in order to earn perpetual interest off the government and people's own credit. Colonists wanted to depart from that and issued their own script (rather than building banks) but they overissued it.

You think this is why the US government borrows money?

They borrow money as part of a circle-jerk process.  The end effect, though, is that these assets participate on our balance-sheets and in our monetary system.  If you don't think so, arrange a budget that pays off all the national debt and see how healthy our economy looks.

[Kshartle]

They borrow money as part of a circle-jerk process. 

It's the dollar holding tax paying Americans getting jerked (and not in  good way).

Gubmit gets to borrow money and spend it making themselves look good, living in their ivory towers.......banks get interest.....taxpayers get stuck with the tax bill and inflation diminishing their standard of living.

[moda0306]

They borrow money as part of a circle-jerk process. 

It's the dollar holding tax paying Americans getting jerked (and not in  good way).

Gubmit gets to borrow money and spend it making themselves look good, living in their ivory towers.......banks get interest.....taxpayers get stuck with the tax bill and inflation diminishing their standard of living.

So the FDIC insuring savers' deposits doesn't give savers an artificially low risk or high return to their assets?  I thought this was a common piece of Austrian "wisdom."

And what government agents earn so much that you think they're reaping the benefits?  Ivory towers?  Have you seen what most government employees make?

[MediumTex]

A few pages back, someone seemed skeptical that cash-like instruments such as t-bills, CDs and savings accounts could ever provide a positive real return.

I think that the degree to which these instruments are able to provide a positive real rate of return has less to do with inflation and more to do with what is happening with other asset classes and the strength of the underlying currency.

I remember in the late 1980s I bought some CDs that paid a little over 9%.  I am certain that for the duration of these CDs I was not dealing with a 9% rate of inflation, and thus these instruments provided me a positive real rate of return.

If you look at t-bill yields from the early 1980s through the mid-1990s, they provided what was almost certainly a positive real rate of return, which is part of the reason that gold performed so poorly during that period.

With due respect to all of my friends here, there seems to be a lot of "narrative dogma" going on where a certain worldview is being defended no matter what the actual data might suggest.

The fact is that sometimes inflation is a bigger problem than other times, and the inflation itself can be driven by a number of different factors that always seem to pop up in new and unique configurations.

There simply isn't any hard and fast cause and effect relationship that we can establish between a certain set of governmental policies and a certain set of economic outcomes.  If it were that simple, all we would need to do would be to short long term treasuries during times like we are in now and go long long term treasuries when interest rates peaked and began heading back down.  The real world just isn't that simple.

KShartle, I fully and completely agree with you that the government is a parasitic force in society.  Once I fully internalize that concept, though, I still have to make allowance for the fact that even a parasitic force can sometimes see its schemes work out without disaster.  Look at the strong economy that unfolded during the Reagan administration, even as the government racked up enormous debts and deficits.  No one would have predicted that in 1980, but it's what happened.  The government was still a parasite, but for whatever reason the economy flourished during that period.

OTOH, during Bush Jr.'s term, he gave the private sector everything they wanted in the form of tax cuts and favorable regulatory conditions, plus a huge Keynesian boon in the form of the War on Terrorism, and yet the economy sort of sucked during his whole administration.

It's very hard to predict what is going to happen in response to any set of government policies.  As we sit here now, five years removed from 2008, and with very little inflation to show for that five year period, there are still countless people who are certain that devastating inflation is just around the corner.  Some of these people seem incapable of revising their worldviews in the face of contrary information, and it can be hard to have a discussion with them because they aren't really open to new ideas; they just keep looking for that validation of that idea that crystalized  in their minds at some point in 2008.

I saw people go through the entire 1980s and 1990s swearing that gold was about to turn around without realizing that economic conditions had changed, and gold simply wasn't a good asset to own during those economic conditions, but it was impossible to talk to them about the flaws in their reasoning because their minds weren't really open to new ways of seeing the world.

If your thinking has ever changed before it got to where it is today, how can you be so certain that your thinking might not change again in the future?  For me, I have advocated many persuasive lines of argument over the years that nevertheless proved to have very little predictive value.  When I realized that my reasoning was tight, and yet I still wasn't able to understand what was actually going on with much nuance, I found my thinking evolving, and this evolution did help me to gain what I believe to be a stronger understanding of what is actually happening in the economy, regardless of how I may personally feel about those things. 

In other words, you can strive to understand a stupid system more deeply without giving up your belief that it's stupid.

[Kshartle]

They borrow money as part of a circle-jerk process. 

It's the dollar holding tax paying Americans getting jerked (and not in  good way).

Gubmit gets to borrow money and spend it making themselves look good, living in their ivory towers.......banks get interest.....taxpayers get stuck with the tax bill and inflation diminishing their standard of living.

So the FDIC insuring savers' deposits doesn't give savers an artificially low risk or high return to their assets?  I thought this was a common piece of Austrian "wisdom."

And what government agents earn so much that you think they're reaping the benefits?  Ivory towers?  Have you seen what most government employees make?

Have you seen what they do to "earn" their pay? Between pay and benefits on average they earn more than the non-government sector, and remember they are not actually satisfying customer demands the same way. I just ran across a study that showed gubmit workers take 35% more sick days on average. No doubt it's because their boss doesn't really need them around since they aren't helping create profits.

The FDIC sticker program doesn't make deposits safer it makes them riskier because it creates a moral hazard. I don't know what Austrians think but I know it means depositors do not discriminate with their deposits based on the riskiness of a banks investments. It's a sticker scam. There isn't enough enough money in the FDIC to rescue a small bank let alone a large one.

[systemskeptic]

Moda/Gumby,

Can you provide more details on the MIT methodology / validation?  For instance if I want to spot check an item they are using in their measurements how can I do that?  Is the full dataset available for public viewing?

[Kshartle]

If your thinking has ever changed before it got to where it is today, how can you be so certain that your thinking might not change again in the future?  For me, I have advocated many persuasive lines of argument over the years that nevertheless proved to have very little predictive value.  When I realized that my reasoning was tight, and yet I still wasn't able to understand what was actually going on with much nuance, I found my thinking evolving, and this evolution did help me to gain what I believe to be a stronger understanding of what is actually happening in the economy, regardless of how I may personally feel about those things. 

In other words, you can strive to understand a stupid system more deeply without giving up your belief that it's stupid.

There is a difference between analyzing a situation......identifying the most likely actions of the participants based on their sef-interest.....making a reasoned assumption of the impact on particular investments and positioning yourself to take advantage of it in accordance with an acceptable level of risk if you're wrong VS. "I don't like the govermment so I won't buy their bonds" or "I like welfare so I wanna buy government bonds".

The first is based in logic and reason, the second is emotional. Just because someone disagrees with you on whether or not it's possible to improve investment returns based on economic analysis of the global economy and current investment prices does not mean they are making emotionaly-driven decisions.

Do you guys not see that? I can EASILY argue that your persistant devotion to the HBPP in the face of the money printing and crushingly low rates is PURELY emotional-driven. I've asked about a BAZILLION times how anyone thinks they could get a real rate of return in LTBs.

I never get an answer.

I get "no one can know for sure......you might be wrong....how can you be sure....."  It's all emotional fear of loss preventing you from taking a look at what appears to be obvious. Or it's the belief that you have no way of possibly weighting what the likely outcome is. Or it's some kind of Stockholm syndrome. At least that's what it appears to me.

The condescending nature with which anyone with the opinion that the HBPP is not ideal at the moment is treated is palpable and I just don't get it. To constantly suggest that someone who is shying away from cash and bonds (at near all-time highs) is just being emotional or politically driven is really really freakin lame. I expect it from some younger-sounding members but they can be ignored.

Maybe they will turn off the money spigots tomorrow and stocks and gold will crash. Maybe they'll prioritze debt payments and stop the welfare/social security. If all that happens I will lose on my investments. I get it. I know that. I don't think that's gonna happen so I'm betting against it. It has nothing to do with opposing the violent system. As soon as the taper starts I'm selling all my stocks and moving that money to cash. Ohhh wait....they're gonna taper once they're done printing a good economy.....yeah right!

[systemskeptic]

I remember in the late 1980s I bought some CDs that paid a little over 9%.  I am certain that for the duration of these CDs I was not dealing with a 9% rate of inflation, and thus these instruments provided me a positive real rate of return.

What was the duration of that CD? 

[Kshartle]

I remember in the late 1980s I bought some CDs that paid a little over 9%.  I am certain that for the duration of these CDs I was not dealing with a 9% rate of inflation, and thus these instruments provided me a positive real rate of return.

What was the duration of that CD?

I remember buying a 5k 1 year in the early 90s at 5.5%...I thought the concept was amazing. First "investment".

[moda0306]

Kshartle,

You said they live in their ivory towers.  I didn't realize what you meant is that they're simply overpaid, but certainly not wealthy. 

Your whole point seemed to be that there were government employees getting fabulously wealthy off of savers.  There isn't enough in federal salaries to even warrent such a statement, either from the standpoint of the employee, or the tax-payer/saver.  You just seem to be spewing anger without any real context of the numbers that would constitute an assertion like that.

So if the government employees aren't winning, who is?  If the savers are losing, who's winning? The borrowers?  Seems to me borrowers are in a rough, rough spot right now.  I'd say they haven't benefitted much.

If the FDIC program actually makes deposits more risky, why have we had far fewer instances of that risk coming to fruition than before its creation?  Any chance Austrians are just wrong? 

It simultaneously lowers the cost of borrowing and raises the safety of lending (at least in the short-term).  Savers are only "screwed" to the degree they accumulate wealth within the banking system and are lied to about its structure.  They can trade their dollars for anything esle they want and outside the system if they don't like the risk/reward scenario.

And if the FDIC insurance is so inadequate, how can you be so sure it skews the system so much?  You seem very certain of its effect on the economy.

I'm amazed the degree to which people obsessed with "self-ownership" can simply NOT identify all the opportunities within the system that these so-called "victims" have the ability to zig instead of zag, but you can still call them victims.  Austrians sometimes sound like savers screaming for welfare.  They want to be able to experience zero inflation (or deflation), but lend their money to the U.S. government, probably the most robust, stable entity on the face of the planet, for 7%.  Really!?  Yeah and I'd like to be able to lend my lawn-mower to my neighbor for $500/hr.

Own yourself, and hold people who have options to the same standard.  Nobody participating in the banking system as a SAVER has to beyond a couple thousand bucks to pay bills, yet a huge piece of the Austrian crusade is spend defending them.  Further, if their predictions are so solid about the economy, they have HUGE opportunities to make HUGE real gains when the rate/price level increase comes.  But they don't... they just complain about being victims and "stolen from" in the investo-sphere.  They may have built a business, lent money, borrowed money, etc, but none of those were done without the knowledge that government taxes you (now, less than most of the last 100 years), and that the government will manipulate interest rates to maximize a balance between price-stability and employment (which it's failing only one part of right now).  The more they cry, scream, complain, and pontificate to society, the more their words ring less like someone preaching self-ownership, and more like someone just not wanting to take responsibility for their mistakes and miscalculations, and focus the blame on others.

[moda0306]

There is a difference between analyzing a situation......identifying the most likely actions of the participants based on their sef-interest.....making a reasoned assumption of the impact on particular investments and positioning yourself to take advantage of it in accordance with an acceptable level of risk if you're wrong VS. "I don't like the govermment so I won't buy their bonds" or "I like welfare so I wanna buy government bonds".

The first is based in logic and reason, the second is emotional. Just because someone disagrees with you on whether or not it's possible to improve investment returns based on economic analysis of the global economy and current investment prices does not mean they are making emotionaly-driven decisions.

Do you guys not see that? I can EASILY argue that your persistant devotion to the HBPP in the face of the money printing and crushingly low rates is PURELY emotional-driven. I've asked about a BAZILLION times how anyone thinks they could get a real rate of return in LTBs.

I never get an answer.

I get "no one can know for sure......you might be wrong....how can you be sure....."  It's all emotional fear of loss preventing you from taking a look at what appears to be obvious. Or it's the belief that you have no way of possibly weighting what the likely outcome is. Or it's some kind of Stockholm syndrome. At least that's what it appears to me.

The condescending nature with which anyone with the opinion that the HBPP is not ideal at the moment is treated is palpable and I just don't get it. To constantly suggest that someone who is shying away from cash and bonds (at near all-time highs) is just being emotional or politically driven is really really freakin lame. I expect it from some younger-sounding members but they can be ignored.

Maybe they will turn off the money spigots tomorrow and stocks and gold will crash. Maybe they'll prioritze debt payments and stop the welfare/social security. If all that happens I will lose on my investments. I get it. I know that. I don't think that's gonna happen so I'm betting against it. It has nothing to do with opposing the violent system. As soon as the taper starts I'm selling all my stocks and moving that money to cash. Ohhh wait....they're gonna taper once they're done printing a good economy.....yeah right!

Kshartle,

Given the bad balance-sheets in the United States, and the fact that the fed is having trouble even generating its stated-target of 2% inflation, the productive capacity that's not going to use, the 3.7% you can earn on a 30-year treasury right now could very well give you a 1.7% real rate if we sustain 2% inflation.

If we have another deflationary crash, we could be looking at closer to 3% or 4% real yields out of our long-term bonds (just the yields/income... nevermind price-gains as rates drop to around 2%). 

It's easy... and it's the same reason low-rates have persisted and given the Japanese an unexpectedly decent real return the last couple decades on their government bonds.

I thought we've made it abundantly clear why we think inflation could be very low for years to come... I don't know how we "haven't answered."


And if there is any investing philosophy that has the most balanced-minded practitioners that I've seen, it's the HBPP.  Hence being able to stomach gold and LTT's in the same portfolio.  Learning about those two assets without the usual hyperbole was an absolute breath of fresh air upon my arrival to this site!  We've tried in umpteen different analytical, mathmatical, historical, logical, and behavioral ways to show you why MR lends even more weight to the deflationist argument.  Obviously, given your political beliefs, eventually we're going to come to the conclusion that your moral assertions and emotions tied to them are driving your arguments....

.... and to be honest (and I say this with no real feeling of being insulted) it's no more condescending for us to do that to you, than it is for you to essentially accuse anyone who doesn't agree with you on the role of government or what constitutes "self-ownership," or whether that's even a valid logical premise as someone who's holding a gun to your head, or asking government agents to do so, forcing you to do what we want.

You might be right.  Maybe we all have the right to not only own ourselves, but there's some way to assert our claim on property in a logically consistent way, but you act like it's just pure, simple logic, and it's not... and more importantly you (and Austrians) use that logic to stand on a moral pedestal, which can feel a bit condescending to SOME who try to argue against it (not me... I can handle the banter).  So realize that your debate opponents also feel equally talked-down to when you do that.  Like I said, you might be right, but they might think it feels REALLY lame to jump right on the moral high-horse of perfect liberty and have to argue their positions from the position of being called a slave-driver.

You may think it's "lame" to observe that some here are "politically-driven," but we're not the ones using terms like "ivory towers" to describe the living-conditions of government-employees, or going on moral tirades about the plight of people who CHOOSE to save within the modern banking system, and not hold some other type of asset.  You have a moral framework that tells you that you're essentially a slave to the state (as are the rest of us), so I don't even think you COULD separate thinking like that from your investing decisions. HB knew we were really 90% free, and the rest of our "plights" was just us fooling ourselves and falling into traps.  This is how he could pull his head out of his own moral assertions long-enough to see how to build a balanced portfolio.

But this post got a bit too serious.... really just trying to illustrate some perspective here, and an observation of mine... still all in good spirit .

[Gumby]

Moda/Gumby,

Can you provide more details on the MIT methodology / validation?  For instance if I want to spot check an item they are using in their measurements how can I do that?  Is the full dataset available for public viewing?

MIT gets their data from PriceStats. PriceStats is a private company (it actually started as the MIT BPP) that prides itself in gathering inflation data from around the world.

http://www.pricestats.com
http://www.pricestats.com/approach/overview
http://www.pricestats.com/approach/data-composition

And they have a partnership with State Street Global Markets for their research data:

http://statestreetglobalmarkets.com/res ... tatsQA.pdf

You can contact the company directly if you wish.

[systemskeptic]

Moda/Gumby,

Can you provide more details on the MIT methodology / validation?  For instance if I want to spot check an item they are using in their measurements how can I do that?  Is the full dataset available for public viewing?

MIT gets their data from PriceStats. PriceStats is a private company (it actually started as the MIT BPP) that prides itself in gathering inflation data from around the world.

http://www.pricestats.com
http://www.pricestats.com/approach/overview
http://www.pricestats.com/approach/data-composition

And they have a partnership with State Street Global Markets for their research data:

http://statestreetglobalmarkets.com/res ... tatsQA.pdf

You can contact the company directly if you wish.

Gumby,

I've already viewed those links, looks like a black box to me aka zero meaningful details that can be used to validate their procedures. Did you link those to me because you thought they actually provide any meaningful information?  Because I see zero useful information in those links.  Maybe I missed something, or are you just taking them at their word, perhaps because of the letters MIT which you might associate with science and respectability?

Since those links have nothing meaningful, it sounds like you are merely assuming they are both moral and competent enough to provide the correct answer? What I see is a handful of people trying to model a very complex problem, who provide zero details and could have a massive motivation / bias to skew results (how much money do you think it would take to fund a "bias" into 5-6 people for example?)

If you can't view, validate, or even see their methods why would you trust their results?