Thoughts From the Frontline, October 2005

The Bernanke Era

October 28, 2005

The King is going. Long live the King. We now know that Ben Bernanke will be the next Fed Chairman. His approval by the Senate is as close to a lock as you can get. This week we focus on Bernanke, and specifically his most famous, and what I think one of the most important speeches ever by a Fed governor. We will look at how policies might change, the risks involved. Bernanke faces some very real challenges. We should all wish him well.

First, let's look at who Bernanke is: Dr. Ben...

Inflation and Fed Policy

October 21, 2005

Exactly how do you measure inflation? Last week's letter showed how the Bureau of Labor Statistics uses "owners' equivalent rent" to measure the rise in housing costs rather than the actual price. The conclusion is that it certainly smoothes out the volatility of housing prices, and keeps the CPI (Consumer Price Inflation) from violent swings from quarter to quarter, it also yields periods where the CPI both understates and overstates inflation. Today, given the rapid rise in home...

Smoothing Out Inflation

October 14, 2005

How can inflation be so low over the past few years if we see rising energy prices, ever-increasing medical costs and especially the cost of housing rising so dramatically? Today, for the first time we see inflation actually showing the results of rising energy costs, and the number is ugly. But it is not as ugly as it could be. This week we look at how the Consumer Price Index is calculated. Like the making of sausage and laws, it is not pretty. It will make for a fascinating read, I...

Aah, Brave New World

October 7, 2005

Last week we looked at how technology has the potential to slow and possibly reverse aging within the next two decades. Marvelous cures for the main reasons of death like cancer, heart disease, dementia and Alzheimer's, not to mention the potential to manage weight, are in our future. Amazing innovations in communications are rapidly coming at us, as is an increased ability to process information. Hunger and malnutrition are in our sites, as we increase the ability to find harvests which...