In one case your interest rate went up 100%, and in the other case it went up 25%.
100% is more than 25%.
Sweet, I'll take the one where my interest went up 100%. Enjoy your new rate, math genius.
In one case your interest rate went up 100%, and in the other case it went up 25%.
100% is more than 25%.
10% is 25% more than 8%.
Its pretty simple.
Somehow I doubt you would put up with your mortgage company "accidently" charging you 5% interest instead of 4% interest... but hey its only 1%!!!!!!
Yet under your way of looking at things you would view interest going from .0001% to .0002% to be a bigger change than going from 4% to 5%.
This is because you're stupid and don't understand math.
Sweet, I'll take the one where my interest went up 100%. Enjoy your new rate, math genius.
To be fair, it would be a bigger "change". The first is a 50% increase, relative to the initial value, where as the 2nd is a 20% increase relative to the initial value.
50% of .0001 is a smaller value than 20% of 4, but if the measurement is change, then the first one is "bigger" in a percentage.
In one case your interest rate went up 100%, and in the other case it went up 25%.
100% is more than 25%.
It would be a larger relative change, but a much smaller absolute change.
Regardless, when we're talking about people's perception of rising prices as was the original topic, the idea that they are noticing a cumulative 2% difference in total price over six years is silliness. Additionally, if CPI were being understated as they imply the differences would be much larger.
Kwatt said:I think I may catch a cold from the draft as all of this goes over my head.
I am not a real good math person. Could you break that down. Or point me to a place that I can learn the basics from?
I understand if you don't have the time to teach.
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Oh I agree with that. But I knew his argument would be the relative change vs the absolute. He originally made an error on how he looked at the data.
Also, I dont think people are looking at the compounded effects. If I'm not mistaken, the CBO measures inflation monthly, and so if it increases 1% every month, its compounded over 12 months. That would give a much larger net effect relative to the initial price right?
Fed paying banks billions on reserves
The inflation hasn't hit the real economy because the government dumped money in to the banks and is paying them interest on it. This also explains why the 1% (more accurately, the .001%) are doing so well - they have a golden goose.
He's pointing out that the 2.9% figure is "annualized", meaning that it's a per year figure, but based on 3 mos of data. So from my simplified example, to get quarterly change you need to divide by 4.
Made up numbers follow. If GDP is 16T per year, avg is 4T per Q. A 3% decline would be $4T*0.97. 3% gain would be 4*1.03. That's a swing of $120B. ($4T*0.03)
So the economists take some time to gather these measurements. Can't measure everything, so they are taking samples and correcting for error and noise.
Obviously the real calcs are much more complicated
I'm not fan of Obamacare, but I dont think the effects have been large enough to be measurable yet.
I see. Thank You.
Org. full year est. for 2014 was 2% annual. So, with a -2.9% annual for the first quarter.
What do the next 3 quarters have to come in at to get there?
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Sorry if I was repeating an answer, the reply sat forever before I posted it.
2= (-2.9+3x)\4
8=-2.9+3x
10.9=3x
X=3.6
Thanks for the answer and the formula!
3.6 annual rate for the next 3 quarters sounds high to me.
Although one of the talking heads on TV said he expects a annual of 3 for the year.
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Maybe spending increased but did people get less or more with that spending? Insurance is a lot of that spending.
Quote: Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 1.0 percent rate. It was previously reported to have advanced at a 3.1 percent pace.
How is consumer spending increasing driving down the economy?