Posted on 01/17/2013 10:06:53 AM PST by 1rudeboy
I thought I’d give the hornet’s nest a good whack.
All I know is that my grocery bill has gone way up over the past few years. And even for items that have not gone up, the amount in the bag or box is less. You open the bag and 2/3rds of it is empty. My utility bill has gone up about 10% too. I guess if I ate less and drove less and sat around in the dark, my bills would be lower and I wouldn’t be contributing to inflation.
Inflation is not a problem unless you have to send you son or daughter to college, or buy insurance of any kind, buy food or gasoline. < sarc > So if you are a self sufficient farmer with no kids, forgo health insurance and have your own supply of methanol that you produce yourself then there is very little inflation< /sarc >
The government also takes into account shrinking package sizes when calculating inflation. So if your 36oz. can of coffee shrinks to 34oz., with the price remaining the same, it counts as price inflation.
College tuition has been rising at a much higher pace than inflation for decades. Gasoline prices are down (significantly) since this summer.
“Excluding food and energy, it rose 1.58%”
Of course food and enegy were not included!
See this CNBC article from April 2011:
Inflation Actually Near 10% Using Older Measure
http://www.cnbc.com/id/42551209
As someone who shops very cheaply for groceries, I can attest that low-end prices have risen signficantly over the last 3 years or so. Used to be you could find chicken legs for 49 cents a pound at times, now the cheapest you see are 79 cents. Potatoes? Used to be able to commonly find them for 99 cents for a five-pound bag, the last time I saw them at the price the spuds were very poor quality. Fair quality spuds are 1.49 a bag cheapest now. Store-brand tub margarine? Gone from 1.99 to 2.99.
Other examples abound. Those are significant percentage increases for someone on a very tight food budget.
And this is why a lot of people question the official inflation stats - their own eyes are telling them something very different.
The price for a gallon of gas is coming down. This has nothing to do with Obama, but he’ll sure take credit for the results. Those dirty oil companies may actually wind up saving us. I think a lot of the trouble in the Middle East stems from OPEC looking at our new found energy reserves and realizing that the golden days are coming to an end.
Except, of course, when they were included. The author takes care of that canard by including both figures (included and not included).
A study in 1999? Those graphs appear to be diverging and it’s over 13 year old data. What are the differences between the old style inflation calcs and the new style ones today?
You get a lot of this stuff on ZeroHedge and elsewhere too. There is an "end is near" crowd of economic bears that instinctively try to paint the worst picture possible at all times. Things are bad enough as it is, there is no need for exaggeration. If you believed the bulk of opinion on ZH, gold should be worth triple what it is now, the EU should have been broken up already and Americans should be rioting in the streets over hyper inflation. Instead Wall Street has run up nicely over the last couple years and anyone who invested wisely did pretty darn well.
It is certainly true that the economy and markets are not healthy (and may well be a house of cards that could implode in the future), but that doesn't mean they will collapse tomorrow, or that hyperinflation will occur in the near term, or that we won't have some good growth quarters, or that there isn't a ton of money to be made.
Interesting comment I saw once about Shadowstats . . . by the time an actual economist crunches, and then refutes its numbers, it’s gone and reposted its BS a dozen more times.
This guy is an idiot.
About that graph from 1978 to 1999. Notice the gap between the old method and new method grows every year, basically doubling every 10. So a gap of 20 points in 1999 would become a gap of 40 points by 2009 and close to 50 by now. Basically, it is gradual negative compounding of the CPI, which was, IMO, the intention all along of the changes.
Agree. And certainly worthy of more study. The question is, is the divergence as large as the folks who want you to buy their newsletters (or sell you gold) claim?
“Excluding food and energy”
And there you have it.
and further, meaningless without tracking the employment numbers , and the skyrocketing foodstamp numbers.
and further, behavioral conditioning have many to believe gas prices above 1.00, yes ONE dollar, are “low.”
Massive numbers of government paychecks = price pressures
HOUSING!
“Owners Equivalent Rent” is the basis used in inflation metrics for the cost of your housing.
Since the value of houses has been collapsing, the biggest thing you spend money on, housing, has been rapidly declining within the basket of goods the Fed considers.
Therefore, inflation everywhere else can (possibly) be hidden by the rapidly declining value / cost of houses.
Now, did you really experience a reduction in cash outflow because your house declined in value? No?
So, is the Fed really just using a housing bust that killed your Net Worth as a cover for actual inflation everywhere else in the economy?
Quite possibly.
Who will go do the analysis of “Inflation, excluding Housing”?
The truth, as always, is somewhere in the middle. I’ve been around long enough to have a jar of very large grains of salt for reading the rants from the doom-and-gloom crowd. Problem is, we almost did melt down a few years ago, and I have seen little done to address the root causes of that meltdown - in fact, in some areas it is even worse, as Dodd-Frank has instutionalized too big to fail, just for one example. So if nothing positive is done, one of these days the gloomers will probably be right again, albeit probably for the wrong reasons.
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