Thursday, July 11, 2013

Billion Prices Project

The Billion Prices Project uses computers to make a price index from a huge number of prices listed on the Internet.  This index is updated daily and provides a better real time indication of price changes than anything else I have found.   It is up about 2% in the last 6 months.  This is an annual rate of about 4%.  Maybe this is just a blip and maybe it is the start of something.   In any case, BPP will be interesting to watch.


  1. Your FAQ was very good, lengthy but good. I think your assessment about hitting 40% deficit spending is a good point. It seems like the money that was taken out of the shadow banking system, in 2008 is still not fully recovered and that is keeping the velocity of money in check. What is your take on the low velocity of money currently?

    1. Thanks. Hussman has data that shows that low interest rates cause low velocity of money. Also, paying banks to let $2 trillion of "excess reserves" stay inside the Fed causes low velocity. Both of these could stop working at any time and give us a high velocity of money. If interest rates go up banks could take their money out of the Fed and put it into higher paying things. Higher interest rates also would mean higher velocity of money. So prices could head up at any time.

  2. Vincent, thank you for making such an interesting website. I read all your updates. Keep it up! :)


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