Predict the Future

How can you say it brings inflation down??? No it doesn't. It sends inflation through the roof. Yeah, it is a bandaid (in terms of the stock market)... on a massive and gaping wound that requires hundreds of stitches to close.

Saying that cutting the interest rates brings inflation down is like saying the moon is made out of cheese.

 

-interest rate=+AD, when AD>AS inflation goes up, the best one can hope for when decreasing the interest rate is if AD<AS and when you -interest rates AD is still less than PO so the economy can grow with minimal inflation

 

no... im a Keynesian whereas he believes in reganomics, two different sides of the spectrum

 

Question!

How is inflation actually higher than what it is?

I mean, I don't get it. The cost of milk, bread, eggs and other various commodities are relatively the same. Private property is much higher and so is oil right now. But is that enough to 'inflate' inflation up to 11%?

I'm so lost, sorry.

 

well inflation is calculated based on the price index, its basically a "basket" of products from all different sectors in the economy, they have a base year( i forgot what it was) and then they see each how much the price of each of those products increased...and they have calculated that there was an overall increase (in the U.S) of 2.7% in 2007 compared to 2006's prices (they tend to exclude food and energy because those prices tend to be very volitile and skew the overall trend)


and check this out PR

http://www.forbes.com/markets/equities/2008/03/14/consumer-inflation-cpi-markets-econ-cx_cg_0314markets08.html

 

Well, that is how it's supposed to work. That's how it worked in the past. It perpetuates long term inflation if that's what you are saying. I mean, inflation is kind of a irrelevant after a decade or so anyway as a measuring stick

Anyway, I think we are trying to say the same thing. Only I'm more confused now about macro economics than why I'm watching the Dodgers play the Padres in Beijing, yet there won't be any Olympic baseball after this summer.

Mysteries. Like how I'm trying NOT to look at pictures from the X-Files movie they just finished filming yesterday to avoid spoilers and such. I like that kind of mystery.

*rambles*

 

Milk and bread prices are in fact up here in the states. They have been for years, and they're only going to get higher.

As far as the inflation goes, there are many variancies, depending on who you talk to. However, many economists will tell you that inflation is much higher than the 3-4% we're lead to believe by the government's numbers. Whether it's 8% or 11%, it's sill a lot higher than what the government is telling us. They are LYING, just like they are about unemployment. They always give the public numbers that are cooked, to make things look less bad than they really are. This is nothing new.

It's just like Bush telling us that everything is just fine. The man is a complete liar and deserves to be tried for treason.

 

you lower interest rates when the economy is in a downturn to get it out of one, and you increase interest rates to slow the economy down when AD is growing too fast and you are experiencing inflation, you will never ,maintain 0% inflation, a low level of inflation is always expected

 

how do you know inflation is not at 2.7% like they say it is? have you conducted your own research or provided anyone's price index so we can see exactly how they calculated their version and if it matches up?(oh i forgot the government knows that the economy is near PO so they are decreasing interest rates to push it past PO in order to lower the dollar and destroy the economy) which doesn't really make sense because you have even said we are in a period of recession or economic downturn or w/e so the government is actually doing the right thing by -interest rates to help get us out of it... if they were evil they would increase interest rates and further strangle the U.S economy and cause an economic collapse/global depression so they could take over?

 

I... just don't trust what you say acga5. Sorry, but there's something off with what you are telling me. Seems a little too over-generalized and I need a more localized explanation to understand and critically analyze these kinds of things. I need to take an economics class in my next life.

 

well express your concerns what part of what I'm saying doesn't make logical sense (my ideas are based on the keynesian model, who knows, you might be a...../me gasp "monetarist"

 

I forgot a key indicator, GDP growth, and have now added it. Please go back and amend your responses to add a GDP forecast. Its one of the most interesting things to project.

Also, i would ask that people not participate in this thread if they are not going to make forecasts, that means Rat and acga5. Rat, nothing against your theories but if you haven't got the nads to back them up with some forecasts, please keep out.

Acga5, your economics debate is seperate and worth starting a new thread on. I'd like to keep this thread for the forecasts.

Thanks to those who have joined in so far, I hope to see many more!

 

1) If the dems don't stop fighting eachother I think Mccain will win, but I doubt it because everyone is pretty pissed off at Bush and his posy
2)Slightly Higher
3)1 EUR= 1.5-65 USD (Fed is going to keep on cutting rates so it depends how long the economic downturn lasts)
4)Unless there is some large global event, I would say around 100-100$
5)12-1300$
6)No(unless they go crazy and nuke israel?)
7)Not really sure
8)5.5-6%
9)Currently inflation @ 2.273%, and i assume it will be higher, maybe 3-4.5% if they keep on cutting the Irate
10) Doubt it, maybe more plans to?
11)Depends if China can stop inflation, and if they unpeg the yuan from the USD
12)No
13)No
14)Don't think the economy is going to be as bad as people think, remember we still have 2.2% growth, in 2001 it was .3%
15) GDP growth of 1.0-1.5% or maybe back up to 3% depending on if the economy rebounds... but most likely the former

 

Great but too many qualifications! No "if this then that" or "x unless y". Also, please don't give wide ranges for numbers. You don't have anything to lose by being wrong, so just pick an number!

Thanks for joining in, sorry if I'm being a hard ass about it!

I checked inflation and Feb 08 was about 4%. I think you are looking at CPI ex food and energy, which is a better measure of core inflation. I can see why you'd rather forecast that since we already have an oil price forecast.

Any other macroecomics nerds please specify core or headline CPI! Anyone who thinks this is getting too technical just ignore it and take a guess!

 

Dang, I forgot to look into my crystal ball and just guessed!

 

I predict acga5 will be banned before the day is over.

 

15. The forecasts I have seen, the GDP will push to a close 2%. That's my prediction for a year from now. I think it could peak up, but by this time next year, I think it will be on its way down and I have edited my original post as so.

This is still fun. I like guessing!

 

Thanks Aristartle!

Now come on Higherthanhell, you seem to have a very negative view on the economy. Why not participate? We'd like to see what you think. Make some guesses!

 

Hiptastic, correct me if I’m wrong, I’m not an economist so it’s a strong possibility, you said inflation is 4.3% and the GDP is 1% so if you correct for inflation, the GDP is already in contraction of about 3.3% or did I miss something?

 

2.2% overall real GDP growth for 2007 w 2.7% inflation