The "Unexpected Inflation" Will Show Up In 24 Days
For a while I’ve been thinking that come January, we will be over the hump of the sharp CPI declines in 4q 2008. At that point the financial press won’t be able to point to year/year declines in prices, and I will be very curious to see if they finally admit we are not stuck in a deflationary trap.
But it occurred to me tonight that the December announcement might actually go positive, since a bunch of the decline happened in October and November of 2008.
I checked the numbers, and here’s what I found: The arithmetic mean (i.e. what the average person means by “average”) of one-month non-seasonally adjusted CPI increases in January 2009 through October 2009 was 0.28%. So let’s assume that the November CPI (which comes out in December) will be 0.28% higher than the October CPI, and that the December CPI (which comes out in January) will be 0.28% higher again.
If that happens, then on December 16, the BLS will announce that the November 2009 CPI is 1.02% 2.1% higher than the November 2008 CPI. In other words, the media will have to report that the monthly figure rose 28 basis points, and year/year prices are up 2.1%. Now maybe they’ll use some seasonal jujitsu, or switch to a goods basket that excludes turkey and Christmas lights, but I think it’s going to be hard for them to say, “At some point down the road, Bernanke will have to think about raising interest rates to contain inflation.”
Then, come mid-January, the press will report on the December 2009 CPI, which again (in our scenario) will be 28 basis points higher than the last month’s. This time, however, year/year CPI will have jumped by 3.4%. Then the analysts will probably freak out and say, “Oh my gosh!! Inflation has risen by more than 50% in one month! Aaaaagh!! It must have been consumers going crazy for Kwanzaa!!”
Then it’s just a matter of time before we’re all using ameros.
Gold Briefly Breaks $1,170 / oz.
The quote right now is $1169.90, but the headline on CNBC said gold had broken $1,170 / oz.
Incidentally, can the Mishites (followers of Mish) explain why other commodities are doing pretty well too? I.e. my very crude understanding is that Mish is saying something like, “Our economy runs on credit. There is a huge debt overhang that needs to be worked off before you’ll see prices rise. The one exception is gold, which is money, and everybody flocks to it in times of crisis. Only with my analysis could you have gotten everything right: falling prices (except gold) and falling interest rates.”
OK, and the Murphy hypothesis (in equally crude terms) is: “Yeah we had (price) deflation until December. Since then we’ve had price inflation. It’s true banks create money by advancing new loans, and those loans are way down. However, Bernanke has made sure to offset this force by holding M1 and M2 constant. We haven’t seen massive price inflation yet because the banks are sitting on reserves, but we do see the dam beginning to break with the price of commodities, especially gold. Why did this huge wave of deflationary pressure stop on a dime in December 2008? Consumers have been paying down credit cards etc. since then.”
I’m not being sarcastic, I would really like to know if Mish somewhere predicted back in late December that oil would more than double in price over the next 11 months. Did he?
SNL Sums Up US/China Relations
The buzz is justified: This SNL clip really is surprisingly good in terms of the political economy. It’s pretty funny too. (HT2LRC)
CNBC Brushes Off One World Government
I heard about this on Glenn Beck. Check out the bombshell hedge fund manager Damon Vickers drops, and how the CNBC guy brushes it off.
A few possibilities occur to me:
(1) The guy just didn’t even process what Vickers was saying; he was so tuned into financial analysis that the “crazy talk” went right by him.
(2) He couldn’t believe what a nutjob they had booked, and when it was his turn to talk he decided to pretend nothing important had just happened so that most viewers wouldn’t notice.
(3) CNBC is a fully briefed partner in the conspiracy to usher in the New World Order, and the anchorman forgot to feign surprise. The alien lizards ate him after the interview as a warning to the other quislings not to slip up again.
I’m leaning towards explanation (2).
Can God Own Your Soul?
In recent weeks I have annoyed my atheist readers by declaring that God owns the universe, and I have annoyed some of my libertarian readers by declaring that ideas can’t be owned. So I thought I would try to be doubly annoying today: Can God own your soul?
This question is interesting for those of us who are (a) libertarians, (b) Christians, and (c) Kinsellians on IP. I think the 3 of us will agree that thinking of God and your soul leads to some problems no matter which way you go.
In the present post I’m not going to come down on one side or the other; I just want to make some observations that a coherent theory must address.
* I loved C. S. Lewis’ line: “You don’t have a soul, you are a soul. You have a body.” So when it comes to us being “really” free etc., I think it ultimately has to do with our wills or souls, not our physical bodies. This is part of my problem with some libertarian arguments over self-ownership; they often seem to conflate one’s physical body with one’s ego.
* As a Christian who believes God created the physical universe out of nothing (physical), I think He has every right to kill you with a tornado, to sit back and allow the Nazis to gas you, etc. Now we of course don’t fully understand His plans and some of His decisions seem outrageous, but ultimately He has the right to do whatever He wants. He is not a monster for causing kids to get born with birth defects, anymore than a human novelist is a monster for creating characters who commit crimes.
* The anti-IP person might be tempted to say, “Ah! Ideas can’t be owned. God owns your physical body, but ultimately He doesn’t own you. So by opposing the notion of IP, we ensure the metaphysical freedom of the human will, which is just what God wants. Thus not only do statists enforce IP in violation of physical property rights, but they lay the principle of the supreme enslavement of our souls.”
* However, if God doesn’t own your soul, then what do we make of Jesus’ warning? “Do not be afraid of those who kill the body but cannot kill the soul. Rather, be afraid of the One who can destroy both soul and body in hell.”
The Skeptics Really Are Skeptics
This particular blog post does not bear on the truth of anthropogenic (manmade) global warming. I’m not going to bother pasting anything here, because the point is (if you’re interested) you need to scroll through Anthony Watts’ post (at a leading skeptic website) and just get the general flavor. There are tons of people saying “let’s not jump to conclusions” and “if something’s too good to be true…” Note it’s not necessarily because they’re such stand-up guys; a lot of the people are cautioning against trumpeting these CRU emails, because they think it’s a trap.
So I was very pleasantly surprised by the skeptics on this. They really were skeptical, especially in the earlier comments when this was still HOT HOT HOT. Yes, Fox News et al. immediately trumpeted, “GLOBAL WARMING FRAUD” or whatever, but the actual people who care about the science (and are skeptical) were not taking the CRU emails at face value.
A Few More Awkward Emails From the CRU Hack
Regarding the hacking of the Climate Research Unit (CRU)’s webmail server: Before I begin, let me make the obligatory observation that hacking into someone’s computer system is morally wrong. I thought that goes without saying, but apparently not (since everyone is going out of his way to say it). If this were about cybersex between the CRU guys and their mistresses, I certainly wouldn’t be reposting the emails.
But this is about people who are providing the justification for governments around the world to take over their energy sectors (and more). CRU is the single most important storekeeper of global temperature data, and they have refused to disclose their original numbers (eventually saying they no longer have them). So when outside “skeptics” want to double check the techniques used to generate the graphs that the IPCC points to and says, “See? We need to regulate CO2,” they can’t reproduce CRU’s techniques. We just have to take CRU’s word for it that they handled the data properly.
That’s why these emails (if legit) are so shocking.
OK one of EPJ’s readers sent Wenzel this article, which contains a few more jaw droppers (emphasis added either by me or by the other site):
From Michael E. Mann (witholding of information / data):
Dear Phil and Gabi,
I’ve attached a cleaned-up and commented version of the matlab code that I wrote for doing the Mann and Jones (2003) composites. I did this knowing that Phil and I are likely to have to respond to more crap criticisms from the idiots in the near future, so best to clean up the code and provide to some of my close colleagues in case they want to test it, etc. Please feel free to use this code for your own internal purposes, but don’t pass it along where it may get into the hands of the wrong people.From Nick McKay (modifying data):
The Korttajarvi record was oriented in the reconstruction in the way that McIntyre said. I took a look at the original reference – the temperature proxy we looked at is x-ray density, which the author interprets to be inversely related to temperature. We had higher values as warmer in the reconstruction, so it looks to me like we got it wrong, unless we decided to reinterpret the record which I don’t remember. Darrell, does this sound right to you?
…
From Kevin Trenberth (failure of computer models):
The fact is that we can’t account for the lack of warming at the moment and it is a travesty that we can’t. The CERES data published in the August BAMS 09 supplement on 2008 shows there should be even more warming: but the data are surely wrong. Our observing system is inadequate.
From Michael Mann (truth doesn’t matter):
Perhaps we’ll do a simple update to the Yamal post, e.g. linking Keith/s new page–Gavin t? As to the issues of robustness, particularly w.r.t. inclusion of the Yamal series, we actually emphasized that (including the Osborn and Briffa ’06 sensitivity test) in our original post! As we all know, this isn’t about truth at all, its about plausibly deniable accusations.
From Phil Jones (witholding of data):
The skeptics seem to be building up a head of steam here! … The IPCC comes in for a lot of stick. Leave it to you to delete as appropriate! Cheers Phil
PS I’m getting hassled by a couple of people to release the CRU station temperature data. Don’t any of you three tell anybody that the UK has a Freedom of Information Act !
From Michael E. Mann (using a website to control the message, hide dissent):
Anyway, I wanted you guys to know that you’re free to use RC [RealClimate.org – A supposed neutral climate change website] Rein any way you think would be helpful. Gavin and I are going to be careful about what comments we screen through, and we’ll be very careful to answer any questions that come up to any extent we can. On the other hand, you might want to visit the thread and post replies yourself. We can hold comments up in the queue and contact you about whether or not you think they should be screened through or not, and if so, any comments you’d like us to include.
From Phil Jones (witholding of data):
If FOIA [Freedom of Information Act] does ever get used by anyone, there is also IPR to consider as well. Data is covered by all the agreements we sign with people, so I will be hiding behind them.
Those of you who thought these were just “cherry picked” and “out of context” emails that don’t cast any suspicion at all on the noble scientists seeking to save the earth… are you still so sure? Is this what you pictured the careful scientists doing, versus the lying distorting deniers?
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