jetzt sogar Bill Gross: CPI 1 % zuwenig und GDP 1 % zuviel

verfasst von CRASH_GURU, 29.09.2004, 17:20

-->"Which brings me to a question that no rational
money manager or economist wants to answer
for fear of becoming a fool, or a conspiratorial kook.
Why do the U.S. government and the Fed
continue to foist this hedonic/substitution mantra
on a gullible public when they should know better
and when, by the way, no other government does
it in the same magnitude and with the same
conviction?

"Let me just answer it this way -- and hopefully not
seem foolish (or worse) in the process. Alan
Greenspan has a dual prerogative at the Federal
Reserve. He is charged with keeping inflation low
and economic output high. The magic of
hedonic/substitution adjustments keeps both of
these birds flyin' at the same time, one UNDER the
magical 2 percent radar, which marks the dividing
line between benign and worrisome inflation, and
the other (real GDP), OVER the hurdle of 3 percent
that suggests the continuation of high productivity,
along with its concomitant implications that the
stock market should be healthy, the dollar strong,
and all's well with the Greenspan legacy.

"Granted, Greenspan doesn't run the BLS, but he
pounds the table hard for hedonically adjusted
statistics. They might serve HIM well, but they do
a disservice to those grounded in the reality of
stretching a paycheck for new cars, laptop
computers, and cell phones that somehow haven't
gone down as much in price as the government
says they have.

"Deceptive hedonic/substitution adjustments also
serve a government burdened not only with hundreds
of billions of annual deficits as far as the eye can
see, but ladened with a demographically aging U.S.
workforce rapidly approaching Social Security time.
By fudging on inflation, they pay less and the
amount could cumulatively run into the hundreds of
billions over the next few decades. They disserve, of
course, all of those who receive Social Security, as
well as other private pensioners dependent on an
accurate accounting of prices paid. They disserve
buyers and holders of TIPS -- inflation-protected
securities -- which adjust inadequately to a faulty
and near fraudulently calculated CPI that one day
could total billions of dollars per year for TIPS
holders. And they disserve all owners of U.S.
Treasury obligations -- including foreign central
banks and institutions -- who mistakenly assume
that they are earning a real return over and above
inflation, and that the dollar upon which they are
denominated is justifiably strong because of GDP
growth and productivity numbers that are pumped
by hedonic magic to resemble the Arnold
Schwarzenegger of 1980 instead of his verbal"girlie
man" analogy of today.

"No I cannot sit quietly on this one, nor as I've
mentioned, have other notables in the past few
years. The CPI as calculated may not be a
conspiracy but it's definitely a con job foisted
on an unwitting public by government officials
who choose to look the other way or who convince
themselves that they are fostering some logical
adjustment in a New Age Economy dependent
on the markets and not the marketplace for its
survival.

"If the CPI is so low and therefore real wages in the
black, tell me why U.S. consumers are resorting to
hundreds of billions in home equity takeouts to
keep consumption above the line. If real GDP
growth is so high, tell me why this economy hasn't
created any jobs over the past four years. High
productivity? Nonsense, in part -- statistical,
hedonically created nonsense. My sense is that
the CPI is really 1 percent higher than official
figures and that real GDP is 1% less.

"You are witnessing a 'haute con job,' and one day
those gorgeous statistics, just like those gorgeous
models, will lose their makeup, add a few pounds,
and wind up resembling a middle-aged Mom in a
cotton skirt with better things to do than to chase
the latest fad or ephemeral fashion.

"If those Moms are holders of government bonds
based upon a benign outlook for inflation, they had
better cash some of them in, especially at today's
4.0 percent yield for 10-year Treasuries."

You can find Gross' commentary at the PIMCO
site here:

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2004/IO_Oct_2
004.htm

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• jetzt sogar Bill Gross: CPI 1 % zuwenig und GDP 1 % zuviel - CRASH_GURU, 29.09.2004, 17:20