Posted on 12/14/2004 11:16:34 AM PST by RWR8189
In the fifth tightening of US monetary policy in as many meetings, Alan Greenspan and the Federal Open Market Committee (FOMC) raised the Federal Funds Rate target 25 basis points to 2.25%, as expected.
More...
A basis point is 1/100th of a percent. 100 basis points equals 1 percentage point. 50 basis points equals 0.5%
Food and energy are excluded from core CPI numbers. They also use a "substitution" method whereby an estimate of how many families have stopped buying beef because prices have risen too much and started eating more chicken instead. These types of adjustments are common and can make the data say anything they wish. There are many more "fudge factors" built into theses numbers.
Check here for more details :
http://www.gillespieresearch.com/cgi-bin/s/article/id=300
Whatcha smokin'?
We've quit buying tomatoes, broccoli, cauliflower, and bell peppers altogether. Thank God beer hasn't gone up.
...why should we care about joe six pack, let him eat cake.
I just keep waiting for these little incremental increases to show up in higher interest rates for certificates of deposit and other savings instruments. Aging boomers in preservation mode are tired of being punished.
It's the fraction times 1000. 25 basis points is the same as .025 increase in the interest rate.
My apologies. The previous responder is right. 25 basis points is the same as .0025, or one-hundredth of a percent.
Well, actually, me and my wife quit eating beef and eating more turkey, fish and chicken because it is less fat, and more healthy for you. I don't even miss beef.
The present round of massive food price increases is just being completed. It is somewhere in the range of 20% this year.
That's fine, but it should have no bearing on pricing measures. The only valid way to have a statisically significant tool, is to measure the same items over time. Substitutions that may be made by some to offset higher prices does not change the fact that those prices are higher.
Govt. has a major vested interest in keeping the CPI numbers low. It makes GDP look better and lowers payouts to Social Security recipients, among other things. It's like having the fox guard the hen house.
Computers are down 30%, advanced automobile techologies are down 20%, and products made by Chinese slave-labor are down 32.5%...
You simply do not know how to do basic math. You're taking an annual rate and multiplying it by whatever number will create what you wish the numbers to be.
Do you even do the shopping for your family? Twenty-five percent increase in inflation is noticable.
No, Don’t be fooled!
Nanak’s figured out how we’re all being lied to with a 24% hidden tax. The government and media are all in on it. Academia and business haven’t figured it out. Go Nanak Go!
It is an evil plot and nanak is on top of things...with his "advanced skills" of "Million Man March Math"...it is all relative to personal happiness...LOL!
"Here's a question: What exactly IS a "basis point" anyway?"
1/100th of a percent.
Here's a question: What exactly IS a "basis point" anyway?"
1/100th of a percent. NO, 1/l00th is written 0.01%.
1/4 of 100, when interest goes up 0.25% that is 1/4 of one percent. So, a whole basis point is just one percent or l.00%.
What is important is for the markets to believe that Alan Greenspan knows what he is doing (this time). Place your bets accordingly.
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