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246 comments on DrumBeat: May 24, 2006

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Darwinian on May 24, 2006 - 11:21am Permalink | Subthread | Parent | Comments top
Yes, the fundamentals will always win out in the long run. However the inflation rate in the US verses the inflation rate in the rest of the world ARE the fundamentals in this case.
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BrianT on May 24, 2006 - 11:30am Permalink | Subthread | Parent | Comments top
No. The fundamentals are the current account deficit (mainly) and the fiscal deficit. The published inflation rate in the USA doesn't have the credibility it once had.
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Oil CEO on May 25, 2006 - 1:59am Permalink | Subthread | Parent | Comments top
How are they measuring it? The credibility, I mean. And where do they publish it? Somewhere near the American League East box-scores, I hope.
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BrianT on May 25, 2006 - 7:34pm Permalink | Subthread | Parent | Comments top
Don't believe everything you read.
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tate423 on May 24, 2006 - 11:39am Permalink | Subthread | Parent | Comments top
Real inflation is approaching 10%.  Our own Fed doesn't get it right, so why should I trust any inflation number coming out of any other country?  Bottom line is countries are becoming more disinterested in our money, so the Fed is monetizing the debt.  Any other countries doing this?  I don't know, but if not I think it's safe to say we will have higher inflation than most any countries.
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Darwinian on May 24, 2006 - 11:49am Permalink | Subthread | Parent | Comments top
The published inflation rate does not matter. What matters, what moves the dollar verses other currencies is the REAL inflation rate. Currencies will always seek their own level in the world marketplace. When the dollar buys less in overseas markets, that means it is inflating faster than other currencies, therefore it will fall. If the dollar buys more it means the dollar is stronger, or rising if you will. Published reports count for nothing, real buying power, currency verses currency, determines the level of all currencies.
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tate423 on May 24, 2006 - 1:13pm Permalink | Subthread | Parent | Comments top
I completely agree.  I'm pointing out that the published rates do not jive with the reality, that's all.  So real PPP is determined on a micro level every day.
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246 comments on DrumBeat: May 24, 2006

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