Skip to comments.Surprise, Surprise: Consumers Do Not Believe the Fedís Inflation Projections
Posted on 09/15/2013 3:50:42 PM PDT by BfloGuyEdited on 09/15/2013 3:59:06 PM PDT by Admin Moderator. [history]
University of Michigan Survey Research Center surveys consumers monthly. The Index of Consumer Expectations is one of two indexes compiled from consumer answers to these questions. One of the routine questions posed relates to expected inflation for next year and for 5 to 10 years from now. Judging by the average response to this question recent consumers clearly do not believe that the Fed either is aiming at or is capable of hitting its announced inflation target of 2 percent. For one year out, the index of inflation expectations has averaged 3.2 percent over the past year and 3.1 over the past 5 years. Consumer expectations of long-term inflation are roughly the same, averaging 2.9 percent over the past year and 3.0 percent over the past 5 years.
(Excerpt) Read more at bastiat.mises.org ...
1) There is no such thing as a national price "level" which can be neatly summarized in an inflation index.
2) Excluding the "volatile" food and energy prices is a shameless attempt to drive down the fictional CPI. Though it's true that supply and demand have a larger bearing on these products, it's also true that higher prices sustained over years and years can only be a result of the Fed's money-pumping.
3) All economics, properly analyzed, is from the individual's experience -- not the nation's which is only the total of the above.
I have a B.A. in economics. But my wife is far more educated than I in the ways of inflation: “Gas prices are up. Rice Crispy prices are up. The price of ..... is up.”
Yet the Fed says prices are under control? Bosh!!!
Ask my wife. She’s spot on when she says we do indeed have more inflation than a couple percent.
The price of a 1 lb can of coffee is “up” ....
But now there’s only 11.5 ounces in that “can” off coffee.
The CPI has been falsified - lies - since Clinton, long before Bush came into office.
No kidding. We went to Costco the other day and they wanted 19.99 for 4 pounds of bacon. The funny thing is that we were there a couple of weeks ago and we refused to pay $17 for the same thing and I was only checking the price to see if they'd come to their senses and dropped it.
I agree with your wife.
Since Obama came into office, there has been major inflation in all the basic necessities. Fuel prices have doubled. Heating costs have doubled. Food prices are up anywhere from 50 to 100%, depending on what you are talking about. Electric power is up.
Most of us are finding it pretty hard to heat our homes, drive our cars, and put food on the table.
And most of us require a certain amount of food and heat to survive.
When a producer reduces the size of a “serving,” but sells it at the same price as before, it “counts” as inflation. Feel free to assume that CPI is falsified—just not the way you mention.
Check the wholesale cost of coffee beans on a worldwide level and you’ll see a 50% price cut over the past few years. I wonder where the vastly increased profits went?
The plummeting value of our homes offsets the rising prices on everything else, so it averages out. See, no problem.
Now get back to work, you taxes are going up.
http://www.ico.org/ This is the source of my coffee pricing.
Who are you going to believe, the Fed or that lying cash register?
That’s still at least $1/lb. cheaper than the grocery store price around here, even if they’re on sale. And Kirkland is some pretty decent bacon — better than some of the leading brands like Oscar Mayer.
Yes, excellent example of how the fallacy of a national price "level" works. Prices of the hundreds of thousands of goods we purchase -- some daily, some once or twice in a lifetime -- do not rise and fall in elegant harmony.
At the rate it is going the public is not going to believe anything the government or the media say.
I’ll bet you were looking at the double 2 lb package of the Maple brand (which isn’t Kirkland) at that $19.99 price. So did I, and bought it. The hickory smoked is four dollars cheaper.
The reason I know this is because we used to get the maple under the Kirkland name years ago, and I hadn’t seen it, so went looking for it just a few days ago.
Kirkland is now Hickory smoked, and you have to pay extra for the Maple brand which is $19.99. I bought the Maple brand after much deliberation, and am glad I did as it’s very good, but I won’t be buying it anymore. The Kirkland Hickory is very good too, and cheaper.
Went to Giant Eagle yesterday. Wanted a chicken breast. $6.29/pound. No way! Went across the street to ALDI, and bought a bag of ocean caught frozen Salmon fillets for about the same price.
Lies, Dam Lies.....and then there are Statistics
Regarding the Fed and the “official” inflation stats. I believe that they are pathological liars. i.e. they repeat the lie until they themselves believe it. Thus, once it becomes truth in their minds, they become more convincing.
The sick pathology of government economists.
Try to find 16 ounces of anything. Potato chips are now down to 9.5 ounces at the ‘same’ price.
It can only go so far, because too many products have experienced about all the shrinkage they can. Grocery stores have had to replace shopping carts, because slats in the old ones were too far apart and the shrunken product packages kept slipping through and falling on the floors.
The FED can only fend off inflation so long. Team Obama are hoping it gets them through the election next year.
I gave up trying to live a normal life in the States and moved to the Philippines in February. I am retired, living on a small pension. I need air conditioning 24/7, drive a Honda scooter, and shop for fresh food. I live on less than $700 a month, in a rented 5 bedroom house, a 6-day-a-week housekeeper, and a full belly. I can rent a car for 1500 pesos a day (around $35 +/-) when I need one.
I am in a small city, just a $15 ride to Cebu, with huge malls and the traffic to go with it. I love it here. The people are friendly and courteous. The food is abundant, and my lifestyle is laid back. I have satellite TV and hi-speed internet for tv and communications. I was watching the Nascar race in Chi-town, until they stopped it for rain.
I came here because I wanted to do more than just "survive"!
We can live a long time without new TVs and iPhones. But consumers can’t live without electricity/gas and food.
CPI that ignores the most universally consumed products are simply wrong.
Then there’s the fact that they exclude health insurance and taxes, two areas also rising.
I have too many children and grandchildren here to do that, because I like to keep in touch with them. But it sounds like you’ve found a good life. Best of luck.
I have constant contact with my family. I have four grown children and eight grands. I have an Apple MacBook Pro, an iPad, and an iPhone, which all work over the internet with Apple's FaceTime program, using the built-in cameras and microphones. All that is required is a free account with Apple. My kids have Macs, and iPods, which all work together for us! I do miss out on some hugs, but America is only a plane ride away!
(disclaimer: pic taken from online image)
The CPI also excludes shares of stock -- conveniently.