I recently received the following question: In 1970 I purchased a nice house in the suburbs of Albany, New York for $54,500. Although the price of the home today is well above the inflation rate, I was wondering how the inflated dollars I'm spending on the last few payments has changed over the past 30 years. The mortgage payment has been consistent but I'm paying in inflated dollars, I just don't know how much the value of each dollar has declined in purchasing power. How would I calculate that figure?- John … [Read more...]
Annual Inflation Since 1914
The Bureau of Labor Statistics has been tracking the Consumer Price Index (CPI-U) since 1913. Thus they have been able to calculate the Inflation rate since 1914. And over that period we have seen some major periods of both inflation and deflation as you can see from the chart. The early years (the teens) were marked by high inflation. The early 1920's started with deflation and low inflation. The 1930's of course had the Great Depression and was primarily a period of deflation. World War II ushered in times of massive government spending and nationwide austerity as commodities were rationed and most of the production was directed toward the war effort. As the G.I.s returned and wanted to … [Read more...]
M3 Money Supply Numbers are Back- Sort Of
Back in March of 2006 I told you the U.S. Government was hiding something and that something was the growth in the money supply as measured by M3. Back then the Federal Reserve tracked and published the money supply measured three different ways-- M1, M2, and M3. Each of these three money supply measures track slightly different views of the money supply. The most restrictive, M1, only measures the most liquid forms of money; it is limited to currency actually in the hands of the public. This includes checking accounts travelers checks, and other deposits against which checks can be written. Of course the money supply is much bigger than that. What about savings accounts? M2 … [Read more...]
Get Your Free Report: How to Use Bar Patterns to Spot Trade Setups
Greetings reader, Our friends at Elliott Wave International, the world’s largest market forecasting firm, have just updated their free report, How to Use Bar Patterns to Spot Trade Setups. With thousands of downloads, “Bar Patterns” has always been a huge hit with traders. But now it’s been packed with even more ways you can use common bar patterns to spot high-probability trading opportunities: 30 charts across 15 pages! Don’t miss out on this opportunity to learn simple new ways to spot valuable trade setups in the charts you view every day. Download Your Free Bar Patterns Report. … [Read more...]
Inflation in the U.S. vs. Japan
The end of 2008 was a massive disinflationary period as the inflation rate fell from lofty heights until in January 2009 the inflation rate had fallen in both the U.S. and Japan to about zero. Deflation followed as the rate fell below the zero line through July. But then the two countries started diverging as the massive trillion dollar bailout began kicking in in the U.S. It kicked the U.S. inflation rate up to almost three percent before petering out. The inflation rate stayed negative (deflationary) in Japan however as prices continued to fall by 1% to 2% per year, which is probably where the U.S. would have been without the trillion dollar stimulus. Inflation in the U.S. currently … [Read more...]
OECD Annual Inflation Rate Steady at 1.6% in August 2010
It takes a bit longer to compile the inflation information for a variety of countries so we are just getting information for August from the Organisation for Economic Co-operation and Development (OECD) for their member countries. Consumer prices in the OECD area rose by 1.6% in the year to August 2010, the same inflation rate as in July. Growth in energy prices slowed to 4.8% in August compared with 6.2% in July, while consumer prices for food rose by 1.4% compared with 1.1% in July. Excluding food and energy, the annual inflation rate held steady at 1.2 % in the year to August 2010. To calculate the U.S. inflation rate between any two dates use our Inflation Calculator. … [Read more...]
How You Can Help Take Money Creation Out of the Hands of the Government
Updated February 2014 We all whine and complain about it but usually there isn't much we can do about inflation. About our only choice is to vote with our feet, we can move our funds from one doomed currency to another. This is what the Forex industry is all about. The only other alternative to fiat currency is hard assets like gold. As I've said many times, the value of our money is based on the supply and demand fundamentals. Right now the demand for U.S. dollars is falling and the supply is rising because the government has the ability to create them out of "thin air". Based on basic Economics 101 this means that the value of the U.S. Dollar will continue to fall as long as the … [Read more...]
Understanding the FED
Protect yourself from the common and misleading myths about the U.S. Federal Reserve Over the years, occasionally I have received comments from subscribers about the SHAM of the FED and how U.S. Taxpayers are being swindled. And although I knew the truth of it, I was unable to shed any new light on the subject. Today our friends at Elliottwave have provided a new resource that will teach you everything you wanted to know – plus some things you might wish you didn't – about the U.S. Federal Reserve Bank. Since the Federal Reserve Act of 1913, the Federal Reserve Bank has been a secret, quasi-government agency. It's time to pull back the curtain on the Federal Reserve system. In … [Read more...]
Stimulus Up But Inflation at 1.15% and Falling?
By Tim McMahon, editor Consumer prices have risen at a meager 1.15% over the last 12 months-- despite massive stimulus and growing commitments from the U.S. government. So what's going on? Deflationary forces are strengthening. They are being spurred on by high unemployment rates creating an overwhelming need for consumers to liquidate their assets for cash. As this new economic phase is becoming a reality, expectations are compounding the effects as explained in recent commentary from the world's largest technical analysis firm. "The economy is moving into a critical new phase, an outright deflation in which 'prices fall because people expect falling prices.' Obviously, this … [Read more...]
How Do I Calculate the Inflation Rate?
The following article explains how to calculate the current inflation rate, if you know the Consumer Price Index. If you don't know it, you can find it here. If you don't care about the mechanics and just want the answer, use our Inflation Calculator. The Formula For Calculating Inflation The formula for calculating the Inflation Rate using the Consumer Price Index is relatively simple. Every month the Bureau of Labor Statistics (BLS) surveys prices and generates the current Consumer Price Index (CPI). Let us assume for the sake of simplicity that the index consists of one item and that one item cost $1.00 in 1984. The BLS published the index in 1984 at 100. If today that same item … [Read more...]
