Inour current economic environment you would also have to consider the various derivatives and off book assets that account for a substantial amount of money yet are not counted in M3 or any of the other aggregate money supply stats. Hence why we see deflation right now, with the evaporation of substantial amounts of bad debt that was acting as assets.

http://news.yahoo.com/s/ap/20090122/ap_on_bi_ge/california_homes

Homes in the San Francisco bay area down 50% since the peak, back to 2000 prices. San Francisco is down 16% from the peak.

Median California sold price is down to Feb 2002 levels.

if food prices are going up but the total money supply isnt, then i would strongly argue that that is not inflation.

I tend to lean towards the austrian (von mises) school of economics…. inflation and deflation are monetary phenomena not price phenomena. trying to describe individual price inflation is a slippery slope and leads to the “cookie inflation” problem.

if i try and define inflation and deflation as changes in prices such as sugar, flour, or cookies; then if supply and demand cause the price of sugar and flour to jump up (there was a bad year for farmers that produce wheat and sugar cane for example)i must describe the increasing price of cookies as inflation even if the total money supply M3 has not changed. that is an inaccurate description of inflation/deflation. its actually a separate definition.

deflation/inflation are used interchangeably for 2 different definitions that have different meanings and different implications.

the first definition is inflation/deflation as a monetary phenomena, a change in the total money supply. an example is Zimbabwe running the printing press and increasing their money supply until they have now had to issue a trillion dollar bill. This is what i would call “monetary inflation/deflation”

the second definition is simply an aggregate shift in prices, either up or down. This is the one most people use and in my personal opinion is misleading at best. this is what i would call “consumer inflation/deflation”

The second definition is not what drives phenomena such as zimbabwea or the Wiemar republic, nor the 1930′s depression. The second definition is generally only and end result of supply/demand forces as well as monetary inflation/deflation

monetary inflation is heavily influenced by central banks and governments. consumer inflation is only somewhat influence by government as supply and demand actors can and often do have significant influence as well.

Dear uncle ezra–i am typing from stanford,

that’s why you’ll have to write back to me at a different address. With regards to an old old request for folk music, that i read while at cornell for homecoming, may i take this chance to plug something that i miss very much? Every Sunday night, WVBR broadcasts a folk show live from the Commons Coffeehouse. If you want to show up, you get a chance to meet the performers and buy the albums they occaisionally sell — but most importantly, you get to hear the encores they play AFTER the show has faded from the airwaves. Bound for Glory has been running now for 21 years, under the direction of Phil Shapiro. Another silly reason to go is that the Commons Coffeehouse serves wonderful coffees and ice cream cones. It’s a wonderful thing that Cornell is lucky to have–free, good music on a regular basis. Temporarily Out of Ithaca

Dear TOI,
How exciting to hear from a reader from far-away Stanford! Ah, yes, I can understand why you’re missing the Commons Coffeehouse and WVBR’s “Bound for Glory.” Great music, wonderful coffees and teas, and always plenty of ice cream on hand. And let’s not forget the bagels. Actually, “Bound for Glory” takes place on Sunday nights (8-11pm), not Fridays, but perhaps you’re making a subtle suggestion that twice a week wouldn’t be a bad idea. I agree …I’m a long-time fan. I also like the fact that, between sets of live music, Phil plays a marvelous variety of folk-music records.
I hope the remainder of your exile isn’t too painful; just keep thinking thoughts of “Bound for Glory.” And for the great multitude of you who are NOT out of town, remember that you don’t have to wait until Sunday night to get some of that ice cream from the Commons Coffeehouse. It’s open Monday-Thursday 9: 30 am-4pm and Sunday 8 pm-11pm.
Uncle Ezra

chicagofinance says:
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January 21, 2009 at 11:49 pm
I am trying to find a link at Cornell related to my old job there, and I come across this passage under the “Ask Unlce Ezra” threads…..

dear uncle ezra
while taking a purity test downloaded from a bulletin board, I came upon the question. have you ever used ben-wa balls? Neither I nor anyone in my dorm knows what these are used for. Obviously it is for some less than normal s-xual purpose, but we don’t know what. could you please oblige us and tell us what these balls are used for? 1st Floor, Boldt Hall

Dear Boldt,
After conducting an informal survey, I’ve found you’re not alone — many people don’t know what ben-wa balls are. According to “Human S-xuality” by Masters and Johnson, ben-wa balls are two metal balls that are put inside the v-gina and provide stimulation as they roll against each other. This is covered in Masters and Johnson’s chapter on female m-sturbation. I hope that your collective curiosity has been satisfied. Uncle Ezra

*cutting its 2009-10 schedule by 10 percent because of the recession, instituting a hiring freeze and slashing $4 million from the budget

SAS
(best place in all of manhattan for acoustics)

or simply, when it comes to food, they charge you the same price, 99cents for a bag of Doritos, 1 month later… that same bag of Doritos still only cost 99 cents, but it only has 2 stupid chips in the bag.

SAS

Stu, I seen the stats first hand at Rutgers for EOF students. You are being too generous. It’s not even their fault. They take a kid from the ghetto who went to a really bad HS, and they’ll put him in a Mechanical Engineering program or a Pharmacy Program. They never have a chance. If they want to correct these problems, they need to revamp the school systems they come from. You can’t expect students to perform at the college level when their high school education isn’t adequate. Speaking of which, we better open up our eyes and fix high school fast. I met this semesters fresh batch of students. It’s getting worse each year. Do I sound like a disgruntled middle age man screaming “in my day”? I’m still in my 20s and can’t believe “these darn kids”. Only it’s real.

You know all those people in the 70s who said “these kids will be running the country one day”? They were right.

“Big Jump in Food Prices, Inflation is Higher than Government Says”
http://tinyurl.com/b29mby

As for the Hate America First comments:

Liberal ≠ Hate America First ≠ Democrat

No country is perfect, America included. Acknowledging as much doesn’t mean we don’t love the country.

As per Roubini, just because you can identify a problem doesn’t mean you know how to fix it.

I wonder what sort of jobs people had in college.

Here are mine:
- nuclear power plant (industrial cleaning in protective suit and mask in and around reactor core during maintenance)
- coal plant (assistant to safety inspector..we lost two employees soon after I left and my boss was indicted)
- road constructions and maintenance (ie setting up traffic lights and signs)
- demolition (blowing up things; I got licence from army)

it was fun but life is better doing other things..