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  1. #421
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    You're not alone in questioning the validity of the CPI, the subject's been debated over the years in other threads on this site. The problem has always been in defining "consumers" then in deciding which items should be included or dropped and finally in what the respective weightings should be. All very subjective.

    Incidentally, we seem to be straying from the subject of this thread - perhaps CPI deserves its own.

  2. #422
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    Macduffy the thread title has inflation and deflation in it and I don't like to create new threads for my rambling as it probably adds little to the site.

    Anyway OCR at 1.75% till at least 2020. Inflation rate 1.85% annually over the last two years. Still well shy of the 3% top of the range required. Although housing increased 8.55% annually over the last two years.

    I haven't followed the latest strikes or have details about the demands but anyone on a wage who isn't getting a 1-3% pay rise every year is getting screwed if the reserve bank has an inflation target of 1-3% wages need to rise by the same amount annually to maintain your standard of living. More if you want to own a house as these have increased substantially more and housing costs possibly would make up one third to half of lower and middle income families budgets.

  3. #423
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    Quote Originally Posted by Aaron View Post
    It might just be me on this thread but I am not the only one who thinks CPI statistics are bull**** for the average NZer. Although not quite sure what his conclusion is at the end as its a bit vague. Possibly he is pointing out a problem then concluding that wages should not rise or it will upset our current wonderful system I'm not sure.

    https://www.stuff.co.nz/business/105...treat-yourself

    My conclusion is that as long as you have capital(that isn't taxed) and a system designed for inflation we eventually create a divide between the rich and poor that becomes too difficult to breach. Like royalty, wealth might become a birth right. A bit early with the predictions but we seem to be progressing this way.
    Yes then you get a Socialist Govt in power than increases Taxes and puts even more strain on a the corrupt fractional banking system..

    I laugh when our central bank comes out with no increases in core rates of 1.75% till 2020 when the US wants to see 3%+ by then ...Maybe are RBNZ thinks the tail wags the dog
    People don't have ideas, ideas have people

  4. #424
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    Interest Rates & confidence down could be interesting developments coming up.How long to wait?
    https://www.interest.co.nz/bonds/955...em-it-creeping

  5. #425
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    This guy thinks there could be trouble.
    https://www.cnbc.com/2018/09/04/jpmo...al-unrest.html
    But he suggests in the article Central banks will buy equities to ensure liquidity (keep prices up) like what the Japanese central bank is already doing. WHAT IS THIS BULL****. Propping up asset prices denies anyone else a chance to buy at a bargain price. They talk about capitalism and free markets. The stock exchanges are supposed to be market places but everyone wants the prices protected. Ensuring asset prices whether it is stocks or real estate never fall sounds like a dumb idea that has had its day. It sounds a little bit like trickle down economics to me. Bull**** ideas like this are what makes me want to throw rocks and burn cars.

  6. #426
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    Jay Powell is listening to the markets. Or has guaranteed he will provide low interest rates and easy money to keep them propped up just like his predecessors. Possibly even direct purchases of stocks if he is following Japan. The theory is the wealth effect that people feel richer so consume more and that keeps the economy humming. Sounds like a bull**** economic theory to me. Who really benefits from elevated asset prices. Here is one group.
    https://www.zerohedge.com/news/2019-...ge-worker-2019

    29 hours work or 3 days to earn an average wage in the UK. I imagine the US and Europe are just as bad. Can one person really be worth that much and be so much more special than just about everyone else to justify their pay packet. Hard to believe, just as hard to believe the wealth effect is a valid economic theory.

  7. #427
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    I see this guy quoted on another thread here. Good confirmation bias for me re the Fed.
    "Gundlach also tossed some shade at Fed Chairman Jerome Powell’s rally-inspiring comments last Friday, as he said the central bank chief “went from pragmatic Powell to Powell put and the markets have been throwing a party since then.” He added that the way investors have been piling into the market lately looks similar to what was going in the credit market before the last big financial crisis."

  8. #428
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    Inflation, but not of the monetary system
    https://www.msn.com/en-nz/money/news...cid=spartandhp

    1908 1mill
    1952 2mill takes 44 years
    1973 3mill takes 21 years
    2003 4mill takes 30 years
    2019 5mill takes 16 years

    Hopefully the next million takes a lot longer. I reckon 5 million is all NZ needs. Why don't we look at sustainability instead of growth.

  9. #429
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    I am not that hot with statistics but I would guess that the next million increase will happen in about 10 years time. Just as well that John Key and Stephen Joyce have gone or we would have been swamped by the sheer number of short order cooks and waiters who were pretending to be "students".

  10. #430
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    ASZ 2019 competition closing in few hours
    Be aware of wizards, for they are subtle and quick to anger.
    that not forbidden is manditory.

  11. #431
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    Targeted inflation or planned price instability to make people feel like spending.
    An idea started in NZ around 1989/90. I can't help but think it is a bad idea. Confirmation bias got me looking at this article.
    Maybe he is right and this is only adding to the wealth gap. Certainly is when it comes to housing in NZ.
    https://www.zerohedge.com/news/2019-...nt-one-percent

    Mind you another conclusion is that if you save something rather than spend everything on consumption you can get ahead although that is difficult with savings rates of 2%-3% and asset price inflation at 8%.
    Last edited by Aaron; 24-01-2019 at 08:06 AM.

  12. #432
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    FYI Interesting thoughts on inflation vs deflation.
    https://www.zerohedge.com/news/2019-...s-graphic-form

    Just trying to promote the idea that targeted inflation is a dumb idea whose time should be up.

  13. #433
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    This article recognises the problem but proposes no solutions.
    https://www.abc.net.au/news/2019-03-...-bank/10887958

  14. #434
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    There was a good opinion piece in the herald this morning regarding the different inflations we have. i.e. massive asset price inflation but lower labour and goods and services inflation.

    This possibly is creating a lack of social mobility. i.e it won't be too long before you will need to have help to get onto the property ladder and if your parents can't help then you are left out. Even if you can get on the property ladder your mortgage is so big it will be a noose around your neck for many years (maybe not that bad as long as inflation keeps working its magic).

    But I suspect a growing lack of social mobility will eventually create a feeling of hopelessness and resentment that could lead people to vote for change, any change good or bad.
    While trying to find the herald article online I did find this
    https://www.interest.co.nz/opinion/5...its-time-focus

    Bernard Hickey may be a visionary. TIME FOR INFLATION TARGETING TO GO a bad idea that has been around too long.

    I appreciate the pointlessness of posting on a website that only a few people read but I suspect you people are the only ones who might even consider the effects of inflation. Talking to friends and family usually gets a blank stare and a shrug.
    Last edited by Aaron; 21-03-2019 at 07:30 AM.

  15. #435
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    Actually thinking about it a bit further and the responses to this thread I may be talking to myself.
    That said eliminating the inflation targeting would be politically feasible and relatively easy and would hopefully make for a less unequal society in the long run.

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