Price inflation since 2000 in France

[bernardd]

Thank you, thank you ... well I spent almost 30 minutes! Start by responding to A) for example ...

Except that if you advance at the same time by mixing all the points, I do not know what to do :-(

- Yes I thought of the price but as for THE inflations, deflations are linked.

There are relations between them, but it would take a little time to describe them. In particular, one of the relations between monetary inflation and price inflation is of the speed versus acceleration type, ie derivative to integral: when prices fall, the money supply continues to increase, but less rapidly.

And it is an artificial relationship related to our current definition of money, not a basic relationship.

[Obamot]

A priori it would seem that currently the "ingredients" to move towards a situation of "stagflation" would be gathered

... but since consumption has not dropped, I must probably be wrong

If you do not take into account the right parameters you are quickly stuck!

[bernardd]

In fact, we should start at the beginning:

is it clear that when the money supply increases, the currency loses its value?

And do you realize what actually means an increase of 10% per year since 1997 at least?

Each year, the money supply compared to the 100 index in 1997, and the value of 1 € compared to the money supply.

x1,1 1 €
1997 100 1,00
1998 110 0,91
1999 121 0,83
2000 133 0,75
2001 146 0,68
2002 161 0,62
2003 177 0,56
2004 195 0,51
2005 214 0,47
2006 236 0,42
2007 259 0,39
2008 285 0,35
2009 314 0,32
2010 345 0,29

Is it clear for the effect of increasing money supply?

Note: the increase in the money supply of 10% per year dates from well before 1997: the effect since 1970 is still much worse ...

x1,1 1 €
1970 100 1,000
1971 110 0,909
1972 121 0,826
1973 133 0,751
1974 146 0,683
1975 161 0,621
1976 177 0,564
1977 195 0,513
1978 214 0,467
1979 236 0,424
1980 259 0,386
1981 285 0,350
1982 314 0,319
1983 345 0,290
1984 380 0,263
1985 418 0,239
1986 459 0,218
1987 505 0,198
1988 556 0,180
1989 612 0,164
1990 673 0,149
1991 740 0,135
1992 814 0,123
1993 895 0,112
1994 985 0,102
1995 1083 0,092
1996 1192 0,084
1997 1311 0,076
1998 1442 0,069
1999 1586 0,063
2000 1745 0,057
2001 1919 0,052
2002 2111 0,047
2003 2323 0,043
2004 2555 0,039
2005 2810 0,036
2006 3091 0,032
2007 3400 0,029
2008 3740 0,027
2009 4114 0,024
2010 4526 0,022

[Christophe]

Well if we are in 2010, it makes an "increase" of 1.1 ^ 13 (or 12)? No?

If we start talking about relationships between different currencies, it becomes even more complicated!

Uh, I think that Obamot summed up the complexity of the inflation situation (and the mechanisms of the macroeconomics) so as not to complicate it even more: let's stay in EURO and France (if possible for Obamot) ...

I think Bernardd is the best of us in this discussion, so let him have the pleasure of educating us ...

ps: what is a sustainable GDP?

reps: I'm not far from being stuck there

[bernardd]

Well if we are in 2010, it makes an "increase" of 1.1 ^ 13 (or 12)? No?

yes, but it's abstract: I put you the calculation.

And if we take the real figures that the ECB broadcasts since 1997, we are on average at that. Savings in euro on a bank account have lost 71% of their value since 1997 and 97,8% since 1970 ...

I think Bernardd is the best of us in this discussion, so let him have the pleasure of educating us ...

Let's say I was tired of not understanding, so I looked for :-)

The problem is that if I understand and model the principles well, I do not know the purely economic vocabulary, particularly obscure sometimes: as if they were secrets accessible to the initiated only :-)

ps: what is a sustainable GDP?

I do not know what to call it, so I call it that.

In what is produced and valued in the GDP, there are the services and the volatile: which does not last, and no longer exists once finished. The chocolate bread is also in this category.

The construction of a house is different: it will remain a long time, and also incorporates the change of status of the land that supports it.

The construction of a car is quite durable, but not eternal.

He says there is a way to find that in GDP, but I do not know it.

[Obamot]

Oulah! Do not pack. To use the method with GDP, you need to know the "trend" of "expected" inflation, and differentiate from "real" inflation (nominal inflation). It is however "simple" not? (joke inside) Thus we ignore the unknown factor of the influence of "economic agents" since they will be de facto contained, 'and so on' you're done .... I'm good? (... if yes, thank you! No applause, and I do not answer questions)

Is it clear for the effect of increasing money supply?

Ok, we understand the principle. Question: if the money supply increases, I imagine that it is because the indebtedness increases (ie the money debt). But if we imagine for a second that borrowings decrease during the period to be evaluated, what happens? Are we going to reduce inflation? Since the difference between "expected" inflation and actual inflation will decrease ...

What about the fact that at the same time the economy, too, is developing and creating "value" (because the proceeds of debt are always to make acquisitions, that is to say to buy movable goods, real estate, services? etc ....)?
What about the "debt repayment", which must also have an impact on the fall in inflation, right? (minus the percentage of "to believe", mebon, it must be within a known range ... so predictable).

[Christophe]

As luck would have it, there was a report in the FR2 newsgroup on the rise in food prices related to commodities (which are good news because we bet it will not fall or not enough when prices fall). ..

See here: http://jt.france2.fr/player/13h/index-f ... t=20100927
It starts with 13: 17 after the interview of the guest of the mid diary.

So the supermarkets (which are moving and do not care about the mouth of the producers) of course accuse manufacturers ... Obviously not question that they trim their margins ...

So who says prices do not go up?

[Christophe]

And an 2ieme help from chance: http://www.dailymotion.com/video/xeynin ... et-fe_news

[Obamot]

... it's like the story of the snake biting its tail.

Is:
- if we increase prices, we reduce consumption.
- if we reduce consumption we boost inflation because companies sell less, so borrow more ....

What it would take is to lower prices and raise wages ...

(ok, if there is a boss in the room, I go out -> [])

But I will first comment on the points above.

[Christophe]

An article that will please pb: http://tempsreel.nouvelobs.com/actualit ... vrete.html

Nearly one in eight households below the poverty line

Poverty affects 30% of single-parent families, which represents more than 1,6 million people, according to INSEE.

Nearly one in eight households, including nearly a third of single-parent families, live below the poverty line that corresponds to 950 euros per month, according to a study published Tuesday September 28 by INSEE. The median standard of living, which divides the population in half so that half of the people have a lower standard of living and the other a higher standard of living, amounts to 19.000 euros per year, 1.580 euros per month, according to this study established on the basis of tax and social income up to 2008.

The median standard of living is up by 1,7% in constant euros compared to 2007. The 10% of the most modest people have an annual standard of living lower than 10.520 euros and the 10% the most affluent a standard of living of at least 35.550 euros, ie 3,4 times more. The poverty line, defined as the equivalent of 60% of the median standard of living of the population, is 950 euros per month.

(...)

The poverty rate, which is the proportion of people whose standard of living is below the poverty line, fell from 1996, where it reached 14,5%, to 2004 to stabilize then around 13%, says INSEE. Poverty affects 30% of single-parent families, which represents more than 1,6 million people, adds INSEE.

So yes, poverty is decreasing according to these numbers but why are there more and more people registered in the restaurants of the heart? Yet the article speaks of constant euros ... so there is a correction by inflation ... it may not be enough (well yes since the rents are not taken into account ... )

This article shows that we can do anything to the numbers ...