Wednesday, December 3, 2014

Going Bananas Over Parabolas

The following chart shows the 20-year moving average of the consumer price index for bananas.

Click to enlarge.

"Saver" the long-term banana parabola! ;)

As is the case with all parabolas, this parabola is absolutely guaranteed to fail at some point (stores will never pay you to take their bananas).

Although this chart points to long-term banana deflation in our future, I would still consider investing a large sum of money to lock in a lifetime supply of bananas at today's prices (if they kept indefinitely). Why not? I absolutely love bananas. They are my favorite fruit. At the very least, I could become king of the banana republic if we all become homeless someday, lol. Sigh.

In the real world, the point of parabolic failure could be long after I'm dead and buried. In the meantime, I'm therefore all about locking in long-term real yields when and where I can. As seen in the following link, not all bears feel as I do though.

December 20, 2012
Interest Rates Near Zero Put Savers in a Bind

“I’ve sent e-mails to [Fed Chairman Ben] Bernanke. I know he doesn’t read them,” says Hernandez.

Sent emails to Bernanke knowing full well he doesn't read them? Might I ask what that was intended to accomplish? Here's an idea. Start a sarcastic blog. Tell the world. Works for me, lol. Sigh.

Further, if I did write emails then I'm not sure what I would have said. Congratulations for continuing the long-term death of real yields? Real yields have been dying for more than 30 years. It's not like Bernanke invented the idea or even has all that much power over the trend. We can't all expect to make out like bandits as more and more people notice the cracks in the economic dam. It's the dam that ultimately provides the interest.

What can savers do about this Fed-induced predicament besides complain? Hernandez’s choice is to stick with the safest, shortest-term securities—low yields be damned. That strategy may make sense if you’re going to take money out soon, or if you’re so risk-averse you sell in a panic whenever the market hiccups. Hernandez, who lives in Henderson, Nev., shies away from riskier assets because he thinks the Fed is manipulating markets. “I believe we’re sitting on a house of cards,” he says. “Every bit of our money is going into CDs and money markets now.”

Every bit of his money sits at the short-end of the curve earning next to nothing? In my opinion, that sounds about as useful as emailing Fed chairmen or burying paper dollars in one's backyard. I find it hard to believe that either strategy will pay off over the ultra long-term.

Just the opinions of an anonymous banana loving fool on the Internet. Take them for what they are worth, perhaps 70 cents a pound, for the bananas that is. The commentary is absolutely free.

If you came here looking for actual banana advice then, well, um, I suppose I could offer something. In theory, I think the following video is work safe. Look, it's just bananas! There is no law against eating them in public! Right?

Source Data:
BLS: CPI Databases
File:Banana fruit on white background.jpg


dearieme said...

Does that fruit meet the EU's requirements for the curvature of bananas?

(oh yes, and there are rules about cucumber curvature too.)

Truly, those who devote their lives to ensuring our welfare never sleep.

dearieme said...

Does that fruit meet the EU's requirements for the curvature of bananas?

(oh yes, and there are rules about cucumber curvature too.)

Truly, those who devote their lives to ensuring our welfare never sleep.

Stagflationary Mark said...


I thought you must have been joking but I went looking just the same!

EU relents and lets a banana be a banana

One such controversy revolved around the correct degree of bend in bananas - a type of fruit not covered by the Wednesday ruling.

That is frickin' hilarious! Hahaha!!

midwesterngirl said...

How did you find this banana video? It's too funny! And ironically appropriate.

Stagflationary Mark said...


I looked for academic research confirminng that if people were buying bananas then perhaps they might be eating them too. I figured that was good for a $10 million research grant, at the very least.

I actually stumbled upon the video by accident though. I think it offers more than enough proof that the theory is sound. People are eating bananas.

You found it too funny? I've never seen people eat bananas so slowly. It's ridiculous what some people will do to keep their weight down! So, yeah. It was funny, and yet somehow useful.

Note that none of the banana eaters were grotesquely overweight. That just can't be a coincidence. More studies need to be done!

This banana video could be the key to solving our nation's obesity problem!

midwesterngirl said...

Academic research is definitely your forte.

Stagflationary Mark said...

I thought politics was my forte.

Read my lips. No more parabolic trend failures after the next thousand or so.

You know what? Perhaps politics is not my forte. Never mind.