My Home About Me

To access the newsletter, simply click on the "Subscribe Now" tab, establish a username and password, and you'll have full access to the Dynamic Growth newsletter and portfolio. This free trial will end on June 1, 2007. PPI- Producer Price Index: Measures changes in wholesales prices. The PPI measures prices at the producer level before they are passed along to consumers. PPI (February) +1.3% vs Consensus +0.5% PPI (Core) +0.4% vs Consensus +0.2% PPI Components: Commodities Industry Sectors Stage of processing PPI tracts prices of: Food- +1.9 percent in February. Metals Lumber Oil & Gas: +3.5 percent in February. Various Commodities Observations: The only real, and accurate read on the PPI is the headline number that includes food and energy. Using the word "core" when reporting inflation data is a way to mask the truth, and gives investors with a false impression of what is really going on. CPI- Consumer Price Index Measures the average price level of a fixed basket of goods and services purchased by consumers. CPI (February) +0.4 percent vs Consensus of + 0.3% CPI (Core) +0.2 percent in-line with Consensus of +0.2 percent CPI Components- Tracks prices of; Energy +0.9 percent Food +0.8 percent Transportation Shelter Utilities Clothing Medical Care +0.5 percent Entertainment Other- Bobble Heads made in India Observations The CPI is used as the cost of living benchmark to adjust Social Security payments to retiree's and the salaries of government and union employees as well. The CPI is the most unreliable inflation indicator known to man. Since the CPI is used to determine salary increases for a government employee (COLA- Cost of Living Adjustment), the CPI has been massaged in a way to make sure the Government does not have to shell out big bucks during highly inflationary periods. In fact, since its inception in 1921, the CPI has undergone six revisions or adjustments. Prior to these adjustments the stock market would react negatively to huge jumps in the CPI. So, as a solution, the CPI has continually been a work in progress and revised. As an example, the components of inflation have been adjusted, revised (through trial and error), and watered down so much that inflation has been in a range of 1-5% since 1991. This makes it easier on the government to manage the COLAs for employees, not to mention being easier on the country's massive financial debt. This being said, it is obvious that the government has big stake in controlling what is reported in the CPI since a larger inflation rate means larger COLAs for employees. This is one of the reasons we keep saying the CPI is not an accurate indicator of inflation, nor does it reflect what is happening in the real world. At best it is a convenient measure, convenient only for the government and their pocketbook. So, the next time you listen to the financial channels and get excited about the inflation rate, remember it has been within a 4% range for 15 years. Since everything inflationary has already been removed, you know it is not an accurate measure of what is affecting us.

Biotech HOLDR (BBH)   relative strength trading   Technical chart patterns   support/resistance levels   ETFs (exchange traded funds)   Deron Wagner   Emini's Nas 100   emini's S&P 500   economic data   day trading   gap   climatic   Fixed-income (bond) ETFs   Oil   Inflation   Earnings   Paul Hogan   Crocodile Dundee   ATO   Australian Taxation Office