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Inflation rate for the month of July
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mwekez@ji
#21 Posted : Wednesday, August 01, 2012 11:43:11 AM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
Impunity wrote:
What formula is used to draw the inflation equation?
Is it absolute or generalistic formula?


@impunity, a specific basket of goods that is used by a “typical consumer” is used in calculating inflation. Have a look at a guide here:

http://www.knbs.or.ke/cpi/CPI%2...'%20GUIDE%202009.pdf

And here for the detailed July 2012 inflation numbers:

http://www.knbs.or.ke/cpi/cpi072012.pdf
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mwekez@ji
#22 Posted : Wednesday, August 01, 2012 11:51:25 AM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
hisah wrote:
mwekez@ji wrote:
hisah wrote:
Lets forget about the tbills/bonds, CBR, lending rates etc fin jargon.

Say in Dec 2011 your shopping basket required 5,000. Lets assume the basket contents have remained constant till end of July. Is this 5,000 still enough to purchase the same contents through this 7 month window of inflation nosedive? Have you increased say more milk or bread, eggs, etc with that inflation rate slamdunk to 7.74% from 19.7%...?

Answer this honestly to yourself.


Economics of the inflation

The price of a basket of goods keeps going up year in year out unless a country is in deflation. Deflation is a negative inflation rate (below 0%) which is not desirable for a developing country like ours.

Recently, the rate at which the price of a basket of good is rising has significantly declined. The inflation rate of 19.72% in Nov 2011 meant that the cost of a basket of goods was 19.72% more than in Nov 2010. The inflation rate of 7.74% in July 2012 means that the cost of a basket of goods is 7.74% more than in July 2011. It doesn’t mean that the cost of the basket of goods has declined.

Truth be told, it’s good for us that the cost of a basket of goods has not gone up a whopping 19.7%. A low and stable inflation rate is what we need. So kudos that we have achieved a single digit inflation rate. Our short term target has been met

That's why I call it ponzinomics...

Anyway, let them slash the CBR by 400bps, flood the banks with easy credit and lets us celebrate the economy has been healed. Hurray!


Ponzinomics applys worldwide. …. Its time for our monetary easing and the economy to grow. Ride the wave brother
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theman192000
#23 Posted : Wednesday, August 01, 2012 12:10:10 PM
Rank: Member

Joined: 7/11/2008
Posts: 401
hisah wrote:
There's something that is not adding up with inflation and lending rates by CBK... If you look at the tbill rate behaviour it says otherwise about inflation nosediving...

I'm finding CBK and treasury moves very confusing and this needs to be resolved asap to jumpstart the econ. Expensive lending rates, expensive tbills, falling inflation rates... WTH... Someone is lying.



@ hisha are you saying that the T-bill is pegged to inflation so they move in tandem? Is the t-bill part of the basket of goods used to determine inflation?d'oh!
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guru267
#24 Posted : Wednesday, August 01, 2012 1:02:33 PM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
hisah wrote:
Lets forget about the tbills/bonds, CBR, lending rates etc fin jargon.

Say in Dec 2011 your shopping basket required 5,000. Lets assume the basket contents have remained constant till end of July. Is this 5,000 still enough to purchase the same contents through this 7 month window of inflation nosedive? Have you increased say more milk or bread, eggs, etc with that inflation rate slamdunk to 7.74% from 19.7%...?

Answer this honestly to yourself.


@hisah I thought you knew better than this!! An inflation rate means prices are rising

So i definitely cannot buy the same basket of goods that I could last month..

All I know is that I am paying 350 more on that 5k (7%) instead of paying 1000 more (20%)

That sounds like healing to me...
Even the price of soda went down...
Mark 12:29
Deuteronomy 4:16
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Ericsson
#25 Posted : Wednesday, August 01, 2012 1:24:35 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,811
Location: NAIROBI
I am getting more units of prepaid power using the same amount of money compared to last year.
Same case with petrol/fuel.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Liv
#26 Posted : Wednesday, August 01, 2012 4:09:59 PM
Rank: Veteran

Joined: 11/14/2006
Posts: 1,311
The biggest risk to our inflation rate is the price of oil.

Apparently the world economy is contracting / or not growing as fast as the last few years....meaning the demand for oil will not be high...if all other factors remain the same (i.e. no Iran war, no other chaos like the last arab uprising,etc)

With low oil demand.... the oil price will fall or stabilize... and hence the imports for Kenya will not go through the roof again....thus Kenya shilling may also not lose value even after the TB rates fall.

with a stable currency, low inflation and low interest rates..... the economy will boom again, land & property prices will rise and the NSE will go through the roof..... and we will all be excited again....

I guess President Kibaki might hand over power circa March - June 2013 on a very high economic note.
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  | | Edit by user: Wednesday, August 01, 2012 4:38 PM | Reason: Not specified
guru267
#27 Posted : Wednesday, August 01, 2012 6:05:06 PM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
Finally my portfolio dividend yield exceeds the inflation rate!!

SWEET!! Laughing out loudly Applause
Mark 12:29
Deuteronomy 4:16
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Scubidu
#28 Posted : Wednesday, August 01, 2012 6:16:17 PM
Rank: Veteran

Joined: 9/4/2009
Posts: 700
Location: Nairobi
@hisah. But i'm curious that the stats aren't showing a slow down in inflation (i.e., declining rate of change, to use gurus illustration of 350 bob more on 5000k - 5350k - resulting in 7.74%) but is telling us that the actual basket has actually dropped over the last 4 months. So they're literally saying that in April 2012 we were at 5000k, but now at say 4700k. Perhaps that's what is hard to swallow. But how perceptive are you to changes in prices... depends on what you're buying??? Bread, Milk, Baby Formula, Sugar, etc. I'm still reminded that before we celebrate we must remember that Githae has big plans for the VAT Bill which might undo a lot of the good work.
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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Scubidu
#29 Posted : Wednesday, August 01, 2012 6:19:05 PM
Rank: Veteran

Joined: 9/4/2009
Posts: 700
Location: Nairobi
guru267 wrote:
Finally my portfolio dividend yield exceeds the inflation rate!!

SWEET!! Laughing out loudly Applause


I believe it was Hass who said rental yields are around 6.8% on certain apartments. So looks like by the end of the quarter, the landlord won't be adding anymore rent Applause

@guru267. What's the dividend yield on your portfolio?
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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guru267
#30 Posted : Wednesday, August 01, 2012 6:21:32 PM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
Scubidu wrote:
@guru267. What's the dividend yield on your portfolio?



6.9% trailing

8.5% forward
Mark 12:29
Deuteronomy 4:16
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  | | Edit by user: Wednesday, August 01, 2012 6:22 PM | Reason: Not specified
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