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Official vs unofficial inflation
Topic Started: 29 Dec 2013, 10:08 AM (3,390 Views)
Count du Monet
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zaph
29 Dec 2013, 01:30 PM
Land is an asset not a consumable. You don't consume land, only the building that sits on it.
Whether something is a consumable, don't matter squat in the question of inflation.
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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zaph
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Dr Hank
29 Dec 2013, 01:36 PM

the RBA should include the cost of land, as they used to, in the calculation of cpi

it is sneaky that they don't, or rates would have gone through the roof in the 00's to reflect this

inflation 3%...that is bullshit
I thought your first reference to the RBA being sneaky by not including land appreciation in the CPI was a typo, clearly not. The RBA do not calculate CPI!
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Dr Hank
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zaph

how is a building a consumable and yet land isn't??

why does it matter??

it is a cost IMO...they both are
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Count du Monet
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zaph
29 Dec 2013, 01:37 PM
Then those cost flows will be reflected in other elements of CPI. If he rents then it will be reflected in the rental component of CPI. If an increase in the cost of farmland leads to an increase in the cost of produce then that will be reflected in the groceries component of CPI. etc etc.


So you're saying it will not made any difference if you include the price of land or not? Hence there should be no problem including the price of land in the calculation?

If 50 Indian migrants are each paying $100 pw rent on the same property. That is the same as 5 Australians each paying $100 rent on a similar property? They are all paying $100 rent and hence there is no inflation?

As I said the only thing the CPI takes into account is the rations of the slaves. :D
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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zaph
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Dr Hank
29 Dec 2013, 01:43 PM

zaph



it is a cost IMO...they both are
Quote:
 
how is a building a consumable and yet land isn't??


If I closed the door to my house and came back in 50 years then it's highly likely that there would not be a habitable building left. The land would still be there. Buildings wear out land doesn't.

Quote:
 
why does it matter??


Land is purchased once as an asset, it can be sold again as an asset when I'm finished using it. I buy a house and I either have to spend money regularly maintaining it or it wears out and becomes valueless.

I'm off to consume some of my pool. I won't be consuming any of the land on the way.
Edited by zaph, 29 Dec 2013, 02:01 PM.
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Count du Monet
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Dr Hank
29 Dec 2013, 01:43 PM

zaph

how is a building a consumable and yet land isn't??

why does it matter??

it is a cost IMO...they both are
Consumables are described as non-durable goods. But is doesn't make any difference to inflation because inflation is a question of supply.
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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peter fraser
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We could put gold in as well, then the inflation rate would be minus 38%.

seriously - CPI stands for Consumer Price Index - not Asset Price Index.
Any expressed market opinion is my own and is not to be taken as financial advice
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Count du Monet
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The human animal only needs a source of nutritional calories and the combustibles for fire. These are critical and the first generally to suffer shortages, the rest is just window dressing.
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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zaph
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Dr Hank
29 Dec 2013, 10:08 AM
why was land taken from the cost of calculating cpi in 1998??
Do you have a reference for that Hank?
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Count du Monet
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peter fraser
29 Dec 2013, 02:13 PM
We could put gold in as well, then the inflation rate would be minus 38%.

seriously - CPI stands for Consumer Price Index - not Asset Price Index.
Consumers do consume assets. If there are 10 gold bars in a shop but they are all purchased by others before I can make the store. Are you telling me they haven't been consumed? Inflation is question of supply.

If some tycoon comes to Melbourne and drops trillions of dollars through out the city. And in two days the shop shelves are empty of most goods and every house has been sold, are you saying that inflation only effects the non-durable goods?

Tosh!
zaph
29 Dec 2013, 02:20 PM
Do you have a reference for that Hank?
The purchase price of a new home was included in the CPI up until then and removed under the Howard government. That is a fact, go ask Chris Joy.
Edited by Count du Monet, 29 Dec 2013, 02:29 PM.
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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