Wall Street Gecko

Inflation Mathematics

the gecko would like to offer some hints as to
how to try to understand government inflation reports

of course the pricing of food and fuel is ignored
in the publishing of official U.S. government inflation numbers;

some might wonder:
what then is considered to be significant?

well, the wages paid to workers

please don't write the gecko asking for justification
of how increasing costs of essentials such as food and energy,
without significant increase in available spending money,
would not add up to inflation

id est:
how the buying capacity of money becoming deminished
is not mathematically equated to "inflation"

the gecko offers no justification of governmental policy,

as stated above, the gecko only offers some hints
which might be useful in trying to understand such governmental mathematics


oh, to be fair, the gecko believes that
the decision not to include oil prices in inflation figures
was made back in the 1970's
you know, the era of the arab oil embargo fears;

the gecko believes that the justification was that
such spikes in oil pricing were short term abnormalities
and oil pricing was expected to return to "normal" in the long run

if one were to ignore the massive new demand
for commodities such as food and energy
developing in countries such as China and India
one certainly could currently expect
the limited supply of oil to return to previous pricing levels

oh, by the way,
the gecko believes that energy is required to manufacture fertilizers
required for increased food production

wooh, when (government subsidized) ethanol is considered,
the whole thing starts sounding like an energy "catch 22"




next thing you know
questions might start being raised
asking why increasing producer costs

such as manufacturing energy, and fuel dependant transportation,
(not to mention higher raw material costs)

would not cause a build up of pressure
which would tend to eventually effect the consumer price index


the Wall Street Gecko's opinions DO NOT represent the views
of this website, Wall Street, nor even the writer(s)

this webpage was last updated on: April 15, 2008