tag:blogger.com,1999:blog-8702840202604739302.post5349558760872303406..comments2024-03-28T03:38:53.734-07:00Comments on MacroMania: U.S. Inflation and Inflation ExpectationsDavid Andolfattohttp://www.blogger.com/profile/12138572028306561024noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-8702840202604739302.post-64374153798256462192012-12-14T05:22:36.092-08:002012-12-14T05:22:36.092-08:00what is it doing? It is selling zero-interest bill...what is it doing? It is selling zero-interest bills for (slightly) positive-interest bills. Would a deceleration in this asset-swap activity really have the dramatic effect Gross suggests. <a href="http://www.china-direct.net/" rel="nofollow">China Direct</a><br />Anonymoushttps://www.blogger.com/profile/00181753070857437581noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-31171453563365046852011-06-30T05:34:43.299-07:002011-06-30T05:34:43.299-07:00I'm honestly not familiar with the matter. you...I'm honestly not familiar with the matter. you did, it seems quite interesting though. I really surfed your blog to get some ideas for the blog I am ready to launch, but beyond your conception. Thanks for the information.Tummy tuckhttp://www.tummytuckguide.com/noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-76408407666990485832011-03-27T20:31:41.316-07:002011-03-27T20:31:41.316-07:00Really wonderful explanation. I am really thankful...Really wonderful explanation. I am really thankful to you for know this.body lifthttp://www.bodyliftguide.comnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-64891900319322712672011-03-07T18:28:26.098-08:002011-03-07T18:28:26.098-08:00Nobody with real inflation expectations buys TIPS....Nobody with real inflation expectations buys TIPS. TIPS depend on the governemnt using honest inflation metrics to make their payments. Silly.<br /><br />Physical Silver and gold is where serious people get inflation protection.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-59421508685432565572011-03-03T17:40:10.966-08:002011-03-03T17:40:10.966-08:00David,
Thank You very much.
Tell Kevin that I fo...David,<br />Thank You very much. <br /><br />Tell Kevin that I found the data file to be a joy. The 2 year TIPS data show a larger rise in inflation expectations (0.65% to 2.21%) since Bernanke's Jackson Hole speech than the 2-year inflation zero coupon swaps (0.92% to 2.37%). <br /><br />P.S. Not that inflation is a joy, of course, but that the effect of QE2 on AD appears to be larger by this measure.Mark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-26830875500392918752011-03-03T08:20:26.585-08:002011-03-03T08:20:26.585-08:00Morris: The trade balances are a mystery to me as ...<b>Morris:</b> The trade balances are a mystery to me as well. But a part of the explanation might be what I described here: http://andolfatto.blogspot.com/2010/08/global-imbalances-good-for-world.htmlDavid Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-83977555961364463542011-03-03T08:18:01.676-08:002011-03-03T08:18:01.676-08:00Mark: I did not make the calculations myself. My c...<b>Mark:</b> I did not make the calculations myself. My colleague Kevin did. I forwarded your question to him, and this was his reply:<br /><br />Well, the simple calculation of subtracting the real constant maturity TIPS yield from the nominal constant maturity yield can't be done for the 2-year Security. Why? Because the H.15 (the Fed's interest rate release) does not calculate constant maturity yields for 2-yr TIPS, like they do for 5-, 10-, and 30-year securities. Thus, for someone wanting to calculate a 2-year inflation expectations from nominal and real TIPS, they must find securities that have the same maturity dates. Unfortunately, the Treasury does not have 2-year nominal and real Treasury securities that mature at the same time. You can find something close -- a 1 month differential. Now, does one month make a big difference? Maybe not. <br /><br />What I chose to do, instead, was to look at the 2-year breakeven inflation rate constructed from a continuously compounded zero coupon yield curves. These data are on Haver: fyiez2@daily.<br /><br />You can find out more information from them here (see Gurkaynak, Sack and Wright paper and the data file they have listed): http://www.federalreserve.gov/econresdata/researchdata.htmDavid Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-16201217217072452762011-03-03T07:05:21.707-08:002011-03-03T07:05:21.707-08:00David,
Where is the data in the market based infla...David,<br />Where is the data in the market based inflations expectations chart coming from? What caught my eye was the 2 year rate. The USSWIT2:IND closed at a low of about -3.6% in mid December 2008. Your chart is showing something closer to -5%. That's quite a discrepancy.Mark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-24563956800755439032011-03-03T05:36:36.698-08:002011-03-03T05:36:36.698-08:00Morris,
China is still not as free to development...Morris,<br /><br />China is still not as free to development as the U.S. Not even close. Unless you are a small/medium business, you have government officials either in charge or on the board or otherwise involved in managing the company. There is not much incentive to be a noticeably large company in China unless you are politically favored.<br /><br />Second, don't trust official Chinese statistics. My instincts (and a few Chinese friends) tell me that they are manipulated regularly, although they are making improvements in that area to have more accurate statistics.<br /><br />It's not USSR obfuscation, but it's not fully the real deal either.Prof Jhttps://www.blogger.com/profile/16539902592080231165noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-31417951140754911342011-03-02T17:38:27.682-08:002011-03-02T17:38:27.682-08:00The US trade deficit with China is a mystery to me...The US trade deficit with China is a mystery to me. The rate of return on Chinese investments should be much higher than US investments since China is still developing. This suggests capital should flow into China from the US, not vice-versa. Either the theory is horribly wrong, or the Chinese are taxing current consumption to manipulate trade flows -- likely the latter.<br /><br />If the Chinese ever decide to reduce their implicit tax rate on current consumption then I think 1-3 will occur. If the Chinese keep taxing current consumption, but stop saving in U.S. backed assets and save in some other kind of asset (Euro or gold or whatever), then I don't know what will happen.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-32229402809706536922011-03-02T13:25:12.191-08:002011-03-02T13:25:12.191-08:00Morris:
It's probably even more complicated ...<b>Morris:</b> <br /><br />It's probably even more complicated than this. O.K., imagine that the Chinese stop buying Treasuries. What are they going to do instead? Buy other types of sovereign debt instruments and, if so, which ones? Buy gold, or other materials? Or, instead of altering the composition of their saving, will they instead decide to redeem debt for goods & services? <br /><br />Although...now that I think about it, your (1)-(3) are still the likely result. And will it be good or bad. For those who like the idea of making Americans work hard to produce stuff and then ship it over to China, it will be good. ;)David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-14574809353233660112011-03-02T13:19:00.608-08:002011-03-02T13:19:00.608-08:00Maybe we should ask what happens when the Chinese ...Maybe we should ask what happens when the Chinese stop buying Treasuries? 1) Interest rates rise. 2) Net Exports rise. 3) Us Domestic Saving rates rise. Is this "good" or "bad" ? No idea.Anonymousnoreply@blogger.com