Why some analysts believe the Consumer Price Index formula understates inflation while others believe the CPI formula overstates inflation. What really matters to us individually when it comes to inflation. In this podcast episode you’ll learn: What is inflation and what causes it.How is the Consumer Price Index calculated and how has the CPI formula changed over time.What are examples of different CPI measures?Why do some analysts believe U.S. inflation is higher than what … [Read more...]
242 Plus: Alternative Inflation Measures, Stock Buybacks and Retirement Spending
In Plus episode 242 for the week of March 2, 2019 we look at how U.S. inflation rates are calculated differently now than in 1990 and 1980, resulting in lower reported inflation. We review the impact of stock buybacks on earnings per share growth and how that can impact stock returns. We explore how corporate debt balances can serve as a constraint to elevated stock buyback levels. Finally, we explore why we need flexibility in terms of our retirement spending given changing investment … [Read more...]
Is A Dollar Collapse Coming?
Will stagflation cause the dollar to crash and be a bottomless pit when the next recession hits? That is what Peter Schiff is predicting. We look at where he is right and where he seems to be off the mark when it comes to the U.S. economy and a dollar collapse. In this episode you’ll learn: Is an economic recession overdue? Why running ongoing trade deficits leads to higher private sector debt balances. Why interest rates and savings is not too low. Why the U.S. … [Read more...]
190: How To Keep Up With Inflation
What investments are best for maintaining purchasing power relative to inflation. Using the pencil as an example, how inflationary and deflationary forces work together over decades to determine the price of product. In this episode you’ll learn: Show Notes The Pencil: A History of Design and Circumstance by Henry Petroski Long-term Inflation Calculator Inside One of America's Last Pencil Factories - The New York Times U.S. pencil business whittled to a nub by imports - … [Read more...]
162: Is Inflation A Good Thing?
What causes inflation and why do central banks allow it to persist instead of having a 0% inflation target. In this episode you’ll learn: Show Notes Did Quantitative Easing Work? - Federal Reserve Bank of Philadelphia Why Deflation Is Bad - The Economist Sponsors Audible Legal Zoom Summary Article Why Inflation Persists A listener to my podcast recently asked, “Why does the Federal Reserve have a 2% inflation target? Why is inflation good at … [Read more...]
MNY127 Plus: TIPs, Individual Stocks and Investment Conditions
This week on Money For the Rest of Us Plus we start off by discussing a leading investment concern; what to do about rising asset class valuations driven by low interest rates. We also look at when inflation indexed bonds are attractive investments. Finally, we explore how to incorporate a portfolio of individual stocks into an asset allocation to determine an appropriate return. … [Read more...]
94: How Money Is Created and Destroyed
How federal governments allow banks to create the vast majority of the world's money supply, and why that erodes the value of money over time. In this episode you'll learn: What is financial intermediation.What is fractional reserve banking.How banks create money through creative accounting.How banks decide how much money to create through their lending decisions.How central banks try to control the amount of lending.Why federal governments can create money in theory but don't do so … [Read more...]
93: Capitalism, Complexity and Cuba
Why uncertainty and failure is necessary for a functioning economy and why Cuba is embracing both in its struggle to reform its economy. In this episode you'll learn: Why the Cuba economy is struggling.Why Cuba is experiencing inflation.What is Cuba's largest export.What Cuba is doing to reform its economy.Why you need uncertainty for a functioning economy.What are the qualities of a complex system . Show Notes In a reversal, Cuba tries price controls to tame inflation - … [Read more...]
87: Is This Normal?
How long-term trends in inflation, stocks and climate changed are hidden by short-term countertrends, creeping normalcy and myriad moving parts. In this episode you'll learn: How inflation leads to a decline in real wealth.Why it is difficult to detect inflation trends.What is creeping normalcy.What causes climate change.Why science is messy.What can individuals do to combat global warming. Show Notes Collapse by Jared Diamond Supermodels - The Science of Climate … [Read more...]
2: What Causes Inflation and Deflation?
Inflation is caused when there is too much money flowing through the economy relative to the amount of goods and services being produced, leading to a jump in prices. Inflation is similar to how athletes experience unpleasant side effects when they run faster than their aerobic capacity. When too much money chases capacity-constrained goods, services, and workers, it leads to a rise in overall prices. Conversely, deflation, or an overall decline in prices, can occur when there is … [Read more...]
