[ExI] Inflation graph

BillK pharos at gmail.com
Wed Oct 30 16:21:48 UTC 2013


On Wed, Oct 30, 2013 at 3:37 PM, spike  wrote:
 > It isn’t so much inflation is a lie, but rather that it is different for
> each person.  Show me where your money is going, I will show you how to
> estimate your inflation rate.  Mine is near zero, possibly negative.
>


Agreed. Everybody's inflation rate is as different as the goods they buy.

But the reason I used the term 'lie' is that the government CPI
calculation is no longer based on the price you pay.

For the long explanation, see:
<http://www.shadowstats.com/article/no-438-public-comment-on-inflation-measurement>

Some examples:
If you buy burger instead of steak because steak has gone up in price,
that's called substitution, and there is no price increase.
If your textbook goes up in price because of added features, like
glossy photographs or leather covers, a deduction is made for the
added features, and again there is no price increase. Even though you
cannot buy a cheaper alternative and have tp pay the dearer price.
That's called “hedonic” quality adjustments.

By gaming these two techniques the government now produces a
ridiculously low CPI figure which is becoming obviously wrong to
anybody that goes shopping. The government has good reasons (to them)
for using a low CPI figure.

BillK




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