Comments on: Will The Falling Dollar Cause Inflation? http://amateurassetallocator.com/2008/05/20/will-the-falling-dollar-cause-inflation/ Amateur Asset Allocator Fri, 19 Mar 2010 17:28:22 +0000 http://wordpress.org/?v=2.9 hourly 1 By: rob dee http://amateurassetallocator.com/2008/05/20/will-the-falling-dollar-cause-inflation/comment-page-1/#comment-1490 rob dee Mon, 30 Jun 2008 20:39:35 +0000 http://amateurassetallocator.com/?p=155#comment-1490 what an absolute load of tripe. seems to me that this clown fails to take chinese currency manipulation into account. if he did he'd have his answer as to why inflation has been low for so long. what an absolute load of tripe. seems to me that this clown fails to take chinese currency manipulation into account. if he did he’d have his answer as to why inflation has been low for so long.

]]> By: Carnival of Personal Finance #154 « Cayman Alteri’s Weblog http://amateurassetallocator.com/2008/05/20/will-the-falling-dollar-cause-inflation/comment-page-1/#comment-1430 Carnival of Personal Finance #154 « Cayman Alteri’s Weblog Mon, 02 Jun 2008 20:05:46 +0000 http://amateurassetallocator.com/?p=155#comment-1430 [...] Amateur Asset Allocator wrote an interesting post on Will the Falling Dollar Cause Inflation? [...] [...] Amateur Asset Allocator wrote an interesting post on Will the Falling Dollar Cause Inflation? [...]

]]> By: Weekend Link Love And Carnival Roundup - 5.31.08 | Amateur Asset Allocator http://amateurassetallocator.com/2008/05/20/will-the-falling-dollar-cause-inflation/comment-page-1/#comment-1425 Weekend Link Love And Carnival Roundup - 5.31.08 | Amateur Asset Allocator Sun, 01 Jun 2008 03:56:33 +0000 http://amateurassetallocator.com/?p=155#comment-1425 [...] post exploring whether or not the falling dollar will cause inflation was highlighted as an editor’s pick in this week’s carnival of personal finance #154 [...] [...] post exploring whether or not the falling dollar will cause inflation was highlighted as an editor’s pick in this week’s carnival of personal finance #154 [...]

]]> By: AndyS http://amateurassetallocator.com/2008/05/20/will-the-falling-dollar-cause-inflation/comment-page-1/#comment-1420 AndyS Sat, 31 May 2008 20:18:07 +0000 http://amateurassetallocator.com/?p=155#comment-1420 Great post and enjoyed reading the comment exchange. Had a recent piece on the US dollar outlook myself and like the perspective here. Great post and enjoyed reading the comment exchange. Had a recent piece on the US dollar outlook myself and like the perspective here.

]]> By: Carnival of Personal Finance #154 « Vanessaterreto’s Weblog http://amateurassetallocator.com/2008/05/20/will-the-falling-dollar-cause-inflation/comment-page-1/#comment-1417 Carnival of Personal Finance #154 « Vanessaterreto’s Weblog Thu, 29 May 2008 19:57:05 +0000 http://amateurassetallocator.com/?p=155#comment-1417 [...] Amateur Asset Allocator wrote an interesting post on Will the Falling Dollar Cause Inflation? [...] [...] Amateur Asset Allocator wrote an interesting post on Will the Falling Dollar Cause Inflation? [...]

]]> By: Curt http://amateurassetallocator.com/2008/05/20/will-the-falling-dollar-cause-inflation/comment-page-1/#comment-1412 Curt Tue, 27 May 2008 19:58:36 +0000 http://amateurassetallocator.com/?p=155#comment-1412 I also respectfully disagree with you. Maybe I could host a debate on my blog sometime and we could further debate this issue to create an exciting read. Are you interested? I also respectfully disagree with you. Maybe I could host a debate on my blog sometime and we could further debate this issue to create an exciting read. Are you interested?

]]> By: Carnival of Personal Finance #154 « Biguncledave’s Weblog http://amateurassetallocator.com/2008/05/20/will-the-falling-dollar-cause-inflation/comment-page-1/#comment-1411 Carnival of Personal Finance #154 « Biguncledave’s Weblog Tue, 27 May 2008 19:47:31 +0000 http://amateurassetallocator.com/?p=155#comment-1411 [...] Amateur Asset Allocator wrote an interesting post on Will the Falling Dollar Cause Inflation? [...] [...] Amateur Asset Allocator wrote an interesting post on Will the Falling Dollar Cause Inflation? [...]

]]> By: Kyle http://amateurassetallocator.com/2008/05/20/will-the-falling-dollar-cause-inflation/comment-page-1/#comment-1410 Kyle Tue, 27 May 2008 19:38:45 +0000 http://amateurassetallocator.com/?p=155#comment-1410 Not much to say except that I respectfully disagree with you. The way inflation was reported in the 70's was provably mathematically incorrect. It did not control for many relevant variables such as substitution and product quality so by definition, the statistic was invalid. Inflation methodology isn't really generated by the government, it's generated by academia. The government merely runs the numbers: they don't control where the data came from or the methodology used to compute CPI. Many industrial nations with a large percentage of imports (UK in the 70's for instance, or Sweden) have had severe drops in their currency with minimal impact to ther domestic inflation rates. It's happened before in many different nations, so it's not unreasonable to think it could happen here as well. I have no opinion on whether or not housing is at a bottom or not. Too difficult to tell. Not much to say except that I respectfully disagree with you. The way inflation was reported in the 70’s was provably mathematically incorrect. It did not control for many relevant variables such as substitution and product quality so by definition, the statistic was invalid. Inflation methodology isn’t really generated by the government, it’s generated by academia. The government merely runs the numbers: they don’t control where the data came from or the methodology used to compute CPI. Many industrial nations with a large percentage of imports (UK in the 70’s for instance, or Sweden) have had severe drops in their currency with minimal impact to ther domestic inflation rates. It’s happened before in many different nations, so it’s not unreasonable to think it could happen here as well.

I have no opinion on whether or not housing is at a bottom or not. Too difficult to tell.

]]> By: Curt http://amateurassetallocator.com/2008/05/20/will-the-falling-dollar-cause-inflation/comment-page-1/#comment-1409 Curt Tue, 27 May 2008 19:26:13 +0000 http://amateurassetallocator.com/?p=155#comment-1409 The high price of oil is a result of the weak dollar, which is already becoming a major contributor to inflation. Inflation is already at double-digits in many places throughout the world, here are a few Venezuela (22pc), Vietnam (21pc), Latvia (18pc), Qatar (17pc), Pakistan (17pc), Egypt (16pc) Bulgaria (15pc), The Emirates (11pc), Estonia (11pc), listed in this article. "OECD warning as stagflation goes global" http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/14/bcnoecd.xml If the government calculated the CPI numbers like they did in the 70's, we would already have double-digit inflation. How could a nation that imports almost everything have a currency that is loosing 8-10% per year have a 2.7% inflation? It just doesn't add up. I think it's going to be much worse then it was in the 70's, if the dollar continues to weaken and if the Fed monetary policy doesn't change soon - we could see 30-50% inflation over the next 5 years. The economic data about low inflation, the bottom of the housing market and the rallying stock market produced by the government and the financial media have been nothing but a dillusion. I do agree with you that it's not that bad - yet - but only because I believe it's going to get a lot worse. The high price of oil is a result of the weak dollar, which is already becoming a major contributor to inflation.

Inflation is already at double-digits in many places throughout the world, here are a few Venezuela (22pc), Vietnam (21pc), Latvia (18pc), Qatar (17pc), Pakistan (17pc), Egypt (16pc) Bulgaria (15pc), The Emirates (11pc), Estonia (11pc), listed in this article.

“OECD warning as stagflation goes global”
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/14/bcnoecd.xml

If the government calculated the CPI numbers like they did in the 70’s, we would already have double-digit inflation. How could a nation that imports almost everything have a currency that is loosing 8-10% per year have a 2.7% inflation? It just doesn’t add up.

I think it’s going to be much worse then it was in the 70’s, if the dollar continues to weaken and if the Fed monetary policy doesn’t change soon – we could see 30-50% inflation over the next 5 years.

The economic data about low inflation, the bottom of the housing market and the rallying stock market produced by the government and the financial media have been nothing but a dillusion.

I do agree with you that it’s not that bad – yet – but only because I believe it’s going to get a lot worse.

]]> By: Kyle http://amateurassetallocator.com/2008/05/20/will-the-falling-dollar-cause-inflation/comment-page-1/#comment-1407 Kyle Tue, 27 May 2008 14:31:27 +0000 http://amateurassetallocator.com/?p=155#comment-1407 I think sustained double-digit station is still extremely unlikely. We may hit double digits briefly, but I highly doubt this will be even as bad as 70's stagflation. Nobody said it was pleasant, but it isn't that bad, either. Oil is just one component of inflation, and the evidence shows it does not spur inflation in all other products like popular wisdom suggests. The price of gold is irrelevant to inflation. It is subject to its own supply-demand curve. Contrary to popular legend, the value of gold does not hold steady while the value of the dollar fluctuates around it. The true economic value of gold fluctuates along with everything else. I think sustained double-digit station is still extremely unlikely. We may hit double digits briefly, but I highly doubt this will be even as bad as 70’s stagflation. Nobody said it was pleasant, but it isn’t that bad, either. Oil is just one component of inflation, and the evidence shows it does not spur inflation in all other products like popular wisdom suggests. The price of gold is irrelevant to inflation. It is subject to its own supply-demand curve. Contrary to popular legend, the value of gold does not hold steady while the value of the dollar fluctuates around it. The true economic value of gold fluctuates along with everything else.

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