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Posts Tagged ‘inflation’

A recent article in Forbes magazine highlights a new concept that has developed in a low interest rate environment. The concept is Negative real interest rates and discussing that today is Chris Price director of broker dealer relations with Shurwest Financial Group.
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THE ▀█▀ █▀ █_█ ▀█▀ █▬█ Я Ξ √ Ω LUT ↑ ☼ N The Middle East protests have fueled more than just a change in Democracy; it looks like these political outbursts will affect the gas pump as well. There are reports that crude oil could rise up to 200 dollars a barrel. Director of the Trends Research Institute Gerald Celente says the role of the Federal Reserve, interest rates and the potential oil crisis out of the Middle East could be detrimental to the United States economic recovery Subscribe www.youtube.com Trends Journal: www.trendsresearch.com Twitter: twitter.com Celente’s accurate forecasts include the 1987 stock market crash, the collapse of the Soviet Union in 1991, the 1997 Asian currency crash” and “the 2007 subprime mortgage scandal.” His forecasts since 1993 have included predictions about terrorism, economic collapses and war. More recent forecasts involve fascism in the United States, food riots and tax revolts. Celente has long predicted global anti-Americanism, a failing economy and immigration woes in the US[13] In December 2007 Celente wrote, “Failing banks, busted brokerages, toppled corporate giants, bankrupt cities, states in default, foreign creditors cashing out of US securities … whatever the spark, the stage is set for panic in the streets” and “Just as the Twin Towers collapsed from the top down, so too will the US economy … when the giant firms fall, theyll crush the man on the street.” He has also predicted tax revolts. In …

Check out these Interest Rates images:

CPI inflation projection based on market interest rate expectations and £200 billion asset purchases , August 2011


Image by Bank of England
Source: Inflation Report, August 2011

The fan chart depicts the probability of various outcomes for CPI inflation in the future. It has been conditioned on the assumption that the stock of purchased assets financed by the issuance of central bank reserves remains at £200 billion throughout the forecast period. If economic circumstances identical to today’s were to prevail on 100 occasions, the MPC’s best collective judgement is that inflation in any particular quarter would lie within the darkest central band on only 10 of those occasions. The fan chart is constructed so that outturns of inflation are also expected to lie within each pair of the lighter red areas on 10 occasions. In any particular quarter of the forecast period, inflation is therefore expected to lie somewhere within the fan on 90 out of 100 occasions. And on the remaining 10 out of 100 occasions inflation can fall anywhere outside the red area of the fan chart. Over the forecast period, this has been depicted by the light grey background. In any quarter of the forecast period, the probability mass in each pair of identically coloured bands sums to 10%. The distribution of that 10% between the bands below and above the central projection varies according to the skew at each quarter, with the distribution given by the ratio of the width of the bands below the central projection to the bands above it. In Chart 3, the probabilities in the lower bands are slightly smaller than those in the upper bands at Years 1, 2 and 3, albeit that the upward skew in Year 1 is smaller than those at Years 2 and 3. The dashed line is drawn at the two-year point.

CPI inflation projection based on market interest rate expectations and £200 billion asset purchases, May 2011


Image by Bank of England
Source: Inflation Report, May 2011

The fan chart depicts the probability of various outcomes for CPI inflation in the future. It has been conditioned on the assumption that the stock of purchased assets financed by the issuance of central bank reserves remains at £200 billion throughout the forecast period. If economic circumstances identical to today’s were to prevail on 100 occasions, the MPC’s best collective judgement is that inflation in any particular quarter would lie within the darkest central band on only 10 of those occasions. The fan chart is constructed so that outturns of inflation are also expected to lie within each pair of the lighter red areas on 10 occasions. In any particular quarter of the forecast period, inflation is therefore expected to lie somewhere within the fan on 90 out of 100 occasions. And on the remaining 10 out of 100 occasions inflation can fall anywhere outside the red area of the fan chart. Over the forecast period, this has been depicted by the light grey background. In any quarter of the forecast period, the probability mass in each pair of identically coloured bands sums to 10%. The distribution of that 10% between the bands below and above the central projection varies according to the skew at each quarter, with the distribution given by the ratio of the width of the bands below the central projection to the bands above it. In Chart 3, the probabilities in the lower bands are slightly smaller than those in the upper bands at Years 1, 2 and 3, albeit that the upward skew in Year 1 is smaller than those at Years 2 and 3. See the box on pages 48–49 of the May 2002 Inflation Report for a fuller description of the fan chart and what it represents. The dashed line is drawn at the two-year point.

Interesting Mosely


Image by tim_d
Amazing what having a photo ripped to pieces in DeleteMe can do to it’s interestingness rating…

She makes page 20 for August 13th!

Schiff Report Video Blog Dec. 13rd 2010
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