Regarding 1), that goes to the store of value, safe haven argument.
Regarding 2), that goes to sentiment and perception which can influence momentum either way. I would, however, have argued much the reverse - that we here in Australia have become insipid, lazy, and living off the fat of the land, whereas in the States, the drive is there, but not necessarily uninform across the country.
Regarding 3), CPI figures the world over are adjusted and harmonised to remove either big ticket, volatile, or variable items (such as energy costs, housing, etc). The trouble with this argument though is that statisticians do factor in an imputed cost attributable to housing (at least in the States, but not so here). So, whereas the USA CPI figures (harmonised, "core", or whatever tend to reflect outcomes closer to the implicit price deflator, the same cannot be said for the Australian CPI results. And yet, Australia's CPI is buffeting against the RBA's ceiling range of 3%.
In the USA, shelter costs account for 40% of "core" CPI, and medical care costs, for 7.5% of "core" value.
In May, shelter costs rose 0.6% (vs +0.1% in April. and no change in March). May’s increase was led by a 4.1% surge in lodging costs, as well as a 0.3% rise in residential rent and 0.2% rise in owners’ equivalent rent.
Of these components, it appears that lodging carries a 10% weighting, owner equivalent rent, a 60% rating, and residential rent, a 30% rating.
Focusing on the 2 important sub-components (ie: ex-lodging), the annualised equivalent increase approximates 2.8% (based on May trends), meaning that "core" CPI is rising at >1.1% on the basis of housing /residential "rent" costs alone in the States.
Regarding 4), the 1/2 annual sales are more reflective of end of season runouts, poor mechandising decisions, loss leading promotions, or volume discount purchases, etc. They do not represent the normal activity or behaviour of society. It also means having to chance your arm in not getting what you want.
In addition, once you factor for the opportunity cost of waiting until the 1/2 year sale is on, coupled with the special trip to town to buy, and the in-store fighting, the discount value is not altogether there. Especially also when you consider that on most big ticketed items, my price to you today is $1,000, but at the sale it is 15 -20% off the list price of $1200, meaning that the sale price is anything between $960 - $1020. Not all sale items are the bargain they are made out to be. Nor are they based on everyday, normal operating prices (ie: from whichc the discount is calculated).
Regarding 5), services covers everything else out there from insurance, to utilities, to professional and business services, to banking and engineering, to transportation, and media, to the cinema, and gaming, even to your football tickets. It does not just apply to the local handyman. But, in any event, getting competitive quotes has always been the smart thing to do, as it always has been. And the pricing may well end up being competitive. But, for argument sake, when was the last time that you were able to get a plumber out on short notice, or on the weekend /evening, or pay for a reasonably priced plumber.
In other words, what they may be quoting on is their labour rates, to which then is added extra time, GST, parts (at full list price), maybe even transportation. And still, you will not get the service done when you want it most (ie: now, or at a time of your flexible choosing).
As for the balance, the underlying question to national worth or value is dependent upon doing an assessment of the national economic worth. GDP reflects the incoming earning potential of the economy, but the relative economic worth of the economy has never been fully calculated (except perhaps back in August 1086 - why???).
OXR Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
