Cents and Sensibility: the Inflation Guy Podcast

Ep. 87: Confusing Price Effects and Quantity Effects

In this too-late-in-the-week episode of Cents and Sensibility, the Inflation Guy takes on supply and demand curves, market clearing prices and quantities, and says you're doing it all wrong.

It's more nuanced than that, but they charge us by the word for these summaries.

NOTES

Blog Callback: “Shortages are Unmeasured Inflation” https://inflationguy.blog/2021/10/24/shortages-are-unmeasured-inflation/  

Blog Callback: “Enough With Interest Rates Already” https://inflationguy.blog/2021/10/24/shortages-are-unmeasured-inflation/

To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/

To Subscribe for free to the blog: https://inflationguy.blog/

Check out the new website!: https://www.EnduringInvestments.com/

Ep. 86: If Gold is Like TIPS, Should I Buy it?

Sometimes, the episodes write themselves.

In Episode 84, the Inflation Guy pointed out that with real yields now comfortably above 2%, TIPS are at least fair and possibly just downright attractive from a long-term perspective. "Is it Time to Buy TIPS?" he asked.

But back in Episode 31, the Inflation Guy discussed "Why Gold is Like TIPS (or Vice-Versa)."

So, by the commutativity principle of podcasting (actually we just made that up), it follows that we should probably ask "Is it Time to Buy Gold?" So in this episode, the IG squares the circle and answers that question.

[He also clarifies that gold is lots heavier than TIPS. So they're not identical or anything. For that matter you can't make a necklace out of TIPS.]

 

NOTES

Podcast Callback: “Why Gold is Like TIPS (or Vice-Versa)” https://inflationguy.podbean.com/e/ep-31-why-gold-is-like-tips-or-vice-versa/  

Podcast Callback: “Is it Time to Buy TIPS?” https://inflationguy.podbean.com/e/ep-84-is-it-time-to-buy-tips/

Blog Callback: “How Higher Rates Cause Big Changes in the Bond Contract” https://inflationguy.blog/2023/10/17/how-higher-rates-cause-big-changes-in-the-bond-contract/

To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/

To Subscribe for free to the blog: https://inflationguy.blog/

Check out the new website!: https://www.EnduringInvestments.com/

Ep. 85: This Month’s CPI Report - The Hard Part Has Begun

Another month, another CPI report. In recent months' reports, the Inflation Guy has warned "Don't Get Used to It!" (Episode 77) and "The Easy Part is Over" (Episode 81). Those months saw flaccid CPI figures that were easy to see through, and this month inflation returned to something approximating the old trend.

In this episode, the Inflation Guy walks through the report with an eye to what happened, but more importantly what happens next. You will want to know why he thinks that the hard part...has just begun.

 

NOTES

Praxis Financial Publishing Q&A of the Inflation Guy: https://lnkd.in/emCrcnHs

Blog Callback: “Enough With Interest Rates Already” https://inflationguy.blog/2023/06/21/enough-with-interest-rates-already/

To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/

To Subscribe for free to the blog: https://inflationguy.blog/

Check out the new website!: https://www.EnduringInvestments.com/

Ep. 84: Is it Time to Buy TIPS?

This is an episode with a call to action!

In this episode, the Inflation Guy discusses the current state of nominal and inflation-linked yields, and gives some historical context as to where those stand in the Grand Scheme of Things. In doing so, he explains why TIPS' downside is much more well-defined that those of normal Treasury notes, and why the current level makes it a good time...well, anyway, you can listen to the episode and find out!

 

NOTES

To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/

To Subscribe for free to the blog: https://inflationguy.blog/

Check out the new website!: https://www.EnduringInvestments.com/

Ep. 83: Inflation Bookshelf

So often, the Inflation Guy is asked to recommend a good book on inflation. Just one? That's crazy. There are oodles of good books on inflation, and in this episode the Inflation Guy recommends eight.

Okay, one of the recommendations was less-than-enthusiastic. But these are all worth reading. Listen to the podcast, and visit the links below to see the books in Amazon or other site.

[erratum - Inflation Guy in this episode refers to the author of Economics as Robert Samuelson. He obviously misspoke because no reasonably-educated economics student wouldn't know that Economics was written by Paul Samuelson, who won a Nobel Prize by the way. Also William D. Nordhaus, who did not.]

NOTES

Podcast Callback: Ep. 15: An Interview with Special Guest Milton Friedman

Books Referred to:

Fiat Money Inflation in France, Andrew Dickson White, 1933 (free pdf)

When Money Dies, Adam Fergusson, 2010

Inflated: How Money and Debt Built the American Dream, R. Christopher Whalen, 2010

The Great Inflation and Its Aftermath: The Past and Future of American Affluence, Robert J. Samuelson, 2010 (funny how many of these are from 2010. Never noticed that before.)

Money Mischief: Episodes in Monetary History, Milton Friedman, 1994

Asking About Prices: A New Approach to Understanding Price Stickiness, Alan Blinder, Elie Canerri, David Lebow, 1998

The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival, Charles Goodhart and Manoj Pradhan, 2020

The Mandibles: A Family, 2029-2047, Lionel Shriver, 2017

To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/

To Subscribe for free to the blog: https://inflationguy.blog/

Check out the new website!: https://www.EnduringInvestments.com/

Ep. 82: Why Endowment CIOs Should Operate in Real Space

Eleven episodes ago, the Inflation Guy presented five ways that endowment CIOs could improve their inflation allocations. In a way, that put the cart before the horse and so the IG is circling back: what is it about UPMIFA that virtually demands that CIOs address their asset strategies in real space?

The basic problem is that two of the seven factors that endowment investment committees are to consider under UPMIFA are in tension in nominal space. But, by changing the problem to look at it in real space, the "consideration of inflation" requirement and the "real value of the endowment" requirement can operate in harmony.

Well, that's the gist of it. Listen to the podcast to hear why this is true!

And check out our new website! (link below)

NOTES

Podcast Callback: Ep.71: 5 Simple Ways an Endowment Can Improve its Inflation-Protection Allocation

To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/

To Subscribe for free to the blog: https://inflationguy.blog/

Check out the new website!: https://www.EnduringInvestments.com/

 

Ep. 81: CPI Report Summary - The Easy Part is Over

In this edition of the monthly CPI Report Summary, the Inflation Guy sets the stage by reminding us about the backdrop: the low, low inflation reports of the last two months. These were somewhat quirky, in mostly different ways, and the IG explains why today's higher-than-expected inflation report is a sign that - although things are getting better - inflation is about to get to the 'sticky part' where continued improvement all the way to the Federal Reserve's goal becomes more challenging.

NOTES

Podcast Callback: Ep.74: Inflation Folk Remedies

To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/

Ep. 80: Hedonic Adjustment and Why You Shouldn’t Hate It

“Hedonic adjustment” is a curse word among those who think that inflation figures are all scrubbed to look nice by the Bureau of Labor Statistics (if they are, the BLS did a pretty rotten job of it over the last couple of years!), but it is not nearly as sinister as you might think it is. In this episode, the Inflation Guy goes inside-baseball again to explain hedonic adjustment, and the offsetting effect that no one ever seems to complain about because it pushes inflation higher.

It's okay to hate inflation, but don't blame hedonic adjustment! Or the Inflation Guy. He's just the messenger.

 

NOTES

To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/

Podcast Callback: Ep. 4: The Making of an Inflation Index

Website reference: BLS Link to Hedonic Adjustment Q&A

Website reference: BLS Link to Hedonic Adjustment for Men’s Suits

Research reference: Johnson, D.S., S.B. Reed, and K.J. Stewart . 2006. “Price Measurement in the United States: a Decade Aftert he Boskin Report.” Monthly Labor Review 129 (5): 10–19.

Ep. 79: Seasonal Adjustment and Inflation

The inflation derivatives market is currently suggesting that prices will decline in the US between August (the report we get in a couple of weeks) and December. Does this mean that inflation is upon us? No, and the reason why is something called 'seasonal adjustment.'

It turns out that seasonal adjustment is critically important for inflation markets, and the market's pricing is not nearly as outlandish as it looks. In this podcast, the Inflation Guy explains in plain English what seasonal adjustment is, and what it means in this case.

NOTES

To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/

Ep. 78: Why China’s Economic Weakness Isn’t Deflationary

Recent data out of China has shown growing stresses in the property market, implying stresses in banking; weakness in the trade balance; and generally disappointing growth. This has led some observers to suggest a deflationary wave is headed our way. In this episode, the Inflation Guy recalls a prior example where weakness in Pacific Rim countries actually provoked acceleration in Western economies, and rising inflation.

NOTES:

Book: Maestro, My Ass! https://amzn.to/45hhFbP