Appendix 2

  Regression Analysis

Consumer Price Index to National Debt Regression Analysis

 

 

 

The Consumer Price Index (CPI) was predicted based on its dependence on the U.S. National Debt as the independent variable.  The regression line was: CPI = 45.98 + (2.248^-11 * National Debt), with a 99% confidence interval, also 93% of the change in CPI was related to the regression line, and a correlation coefficient, r = 0.96.  It can’t be said that this line fits like a glove, but it shouldn’t fit at all. 

 

This indicates the National Debt creates new money that causes inflation of the Consumer Price Index.

 

 

Expected Consumer Price Index                 = 45.98 + (2.248^-11 * National Debt)

2004 National Debt                                      = $7,379,052,696,330.

Actual 2004 Consumer Price Index            =  $188.90

Expected 2004 Consumer Price Index      =  $211.86

Actual error                                                   = +$22.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes

 

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#1

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#7

Federal Reserve Act, Division of Earning Sections 7

Federal Reserve Act, Federal Reserve Banks Section 4

Federal Reserve Act, Section 8

http://en.wikipedia.org/wiki/federal_Reserve_System#Balance_sheet balance sheet as of May 15, 2008.

Federal Reserve Act, The Federal Reserve Board shall be authorized and empowered section 11 (k)

http://www.federalreserve.gov/generalinfo/faq/faqbog.htm  Is it legal for Board employees to own stock or to trade in the market? May 14, 208

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#1

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5

Federal Reserve Act, Section 4 Federal Reserve Banks

Federal Reserve Act, Section 4 Federal Reserve Banks, First

Federal Reserve Act, Section 4 Federal Reserve Banks, Second

Federal Reserve Act, Section 4 Federal Reserve Banks, Third

Federal Reserve Act, Section 4 Federal Reserve Banks, Fourth

Federal Reserve Act, Section 4 Federal Reserve Banks, Fourth

Federal Reserve Act, Section 4 Federal Reserve Banks, Fifth

Federal Reserve Act, Section 4 Federal Reserve Banks, Sixth

Federal Reserve Act, Section 2 Federal Reserve Districts

1913 Federal Reserve Act section 2

http://landru.i-link-2.net/monques/currencyact.htm1#NATIONAL, National Currency Act (later called “National Bank Act”) June 3, 1864 section 31, page 14.

http://landru.i-link-2.net/monques/firstbank.html The First Central Bank of the United States, sec 7 IX

http://landru.i-link-2.net/monques/firstbank.html The First Central Bank of the United States, sec 5

American Heritage Dictionary, Second College edition, Houghton Mifflin Company, Boston, page 778

www.amstd.spb.ru/gilded_age/gold_standard.htm The Sold Standard Act, 1900

http://en.wikipedia.org/wiki/federal_Reserve_System#Balance_sheet balance sheet as of May 15, 2008.

  http://www.federalreserve.gov/monetarypolicy/reservereq.htm#table1 Federal Reserve Board web site

http://www.frbsf.org/education/activities/drecon/2001/0108.html Ask Dr. Econ

http://www.frbsf.org/education/activities/drecon/2001/0108.html Ask Dr. Econ

http://www.federalreserve.gov/monetarypolicy/discountrate.htm The Federal Reserve Board

www.frbdiscountwindow.org/frscollateralguide.cfm?hdrID=21&dtID=81 Discount window procedures

 

http://www.newyorkfed.org/markets/statistics/dlyrates/fedrate.html Historic Changes of the Target Federal Funds and Discount Rates, Federal Reserve Bank of New York, Markets March 2008.

ftp://ftp.bls.gov/pub/special.resuest/cpu/cpial.txt, U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index, All Urban Consumers – (CPI-U) U.S. city average, all items, 1982-84=100, 4-16-2008,

http://www.newyorkfed.org/markets/statistics/dlyrates/fedrate.html Historic Changes of the Target Federal Funds and Discount Rates

www.frbsf.org/education/activities/drecon/answerxml.cfm?selectedurl=/2005/0507.html Ask Dr. Econ, Monetary Policy, Who are the largest holders of U.S. public debt?

The First Central Bank of the United States, Section 7.9, February 25, 1771.  http://landru.i-link-2.net/monques/firstbank.html

The First Central Bank of the United States, Section 7.9, February 25, 1771.  http://landru.i-link-2.net/monques/firstbank.html

The First Central Bank of the United States, Section 7.9, February 25, 1771.  http://landru.i-link-2.net/monques/firstbank.html

The American Heritage Dictionary, Second College Edition, Houghton Mifflin Company, Boston 1982 page 507.

Federal Reserve Act of 1913, Section 14.

^{http://www.frbsf.org/education/activities/drecon/answerxml.cfm?selectedurl=/2005/0507.html} Ask Dr, Econ, Monetary policy