Your Place in Cyber Space for Inflation Data
The main idea behind investment is to grow and preserve wealth, and in many cases, find unique ways to generate more income. Popular wisdom has it that when interest rates rise gold prices fall because the opportunity cost of holding an non-interest bearing asset is growing. However, contrary to popular wisdom, recent interest rate hikes by the US Federal Reserve have coincided with a rising gold price. At the same time, investor confidence in the stock market is faltering due to the FED's … [Read More...]
The U.S. Bureau of Labor Statistics (BLS) released their monthly Consumer Price Index report on January 11th 2019, for January 1 through December 31, 2018.
Annual Inflation is Down
Annual inflation in December was 1.91% down from December’s 2.18%.
CPI was 251.233 below November’s 252.038 below October, September and even below the 251.588 in May.
Monthly Inflation for December was -0.32% virtually identical to November’s -0.33%.
Next release February 13th
According to the BLS commissioner’s report, “In December, the Consumer Price Index for All Urban Consumers fell 0.1 percent on a seasonally adjusted basis; rising 1.9 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy rose 0.2 percent in December (SA); up 2.2 percent over the year (NSA).”
In addition to sounding similar interest and inflation are amazingly inter-related. And in effect interest rates incorporate a “negative feedback loop” into inflation.
Inflation can particularly affect small businesses. While the media tends to focus on the effects of inflation on individual consumers, small businesses have (arguably) even more at stake when inflation is high.
The U.S. Bureau of Labor Statistics (BLS) released their monthly Consumer Price Index report on December 12th 2018, for the 12 month period through the end of November.
Since the dawn of money there has been fear of debasement. In the early years, when gold and silver were the primary forms of currency it was possible that another cheaper metal like lead could be mixed in with the molten gold and because of its near identical atomic weight no one would be the wiser and “poof” there is more “gold” thus more coins to go around. This would result in “monetary inflation” and eventually “price inflation”.
One of the stated benefits of the first cryptocurrency (Bitcoin) was that its supply was not under the control of any individual, organization or government but rather was subject strictly to the laws of mathematics and the limits of computing power. Bitcoins can only be produced by throwing computer power at it and thus it is time and energy intensive. It also had limits built into its algorithm to control the maximum number of bitcoins that can be produced and to make it progressively harder and harder to produce as it got closer to the limit. So this feature took the “minting” of cryptocurrencies out of the hands of governments.
Back in 1918 gasoline was $0.25 a gallon and by 1932 prices had fallen to 18 cents a gallon! But as we all know over the last 100 years the purchasing power of the dollar has fallen drastically so in order to get the true picture we can’t just say that the lowest price of gas was 18 cents per gallon, we need to adjust the price for inflation.
Electricity Price Inflation Residential electricity prices in the U.S. have risen from an average of 7.83 cents per kilowatthour in 1990 to an average of 11.44 cents per kwh in 2010. This is a 46% increase in 20 years and sounds like a lot but as you can see from the chart below for many years[Read More…]
Source: inflationdata.com | NYSE Index Inflation Commentary To Print this Chart: When Printer dialog box appears be sure to switch to Landscape mode Note: Please feel free to link to this page but not to the image itself as the image may be renamed (or deleted) when it is updated but the page URL will[Read More…]
Your Ability to Choose Should Increase Competition In years past consumers didn’t have a lot of choice when it came to their natural gas supplier, they were tied to the local gas utility, so if they wanted to charge a 541% markup you were pretty much stuck. But just prior to the new millennium states began[Read More…]
Inflation Adjusted Real Estate Prices- Lets take a look at the idea that housing prices always go up. Of course, each neighborhood is different, so some neighborhoods might be going down while a few miles away housing prices are skyrocketing but by looking at the nationwide average we can get a better picture of the overall trend. The St. Louis Federal Reserve publishes the following chart that shows the S&P/Case Shiller National Home Price Index and by adjusting those prices for inflation we can get a better picture of how real estate prices really act. Is a home a good investment or not?
Inflation Indexed Bonds Performance- U.S. Treasury Inflation indexed bonds are supposed to protect you from the ravages of inflation while providing a safe and decent rate of return on your money. Obviously, since safety is generally inversely proportional to risk, if inflation indexed bonds are very safe you would expect the rate of return to be[Read More…]
