Whatever happened to all that inflation conspiracy talk?

[Slimprofits]

Re: Whatever happened to all that inflation conspiracy talk?

I am curious whether iTulipers are actually seeing any real decreases in their cost of living? Gasoline is down on the back of crude, but what about other stuff?

Anybody's property taxes go down this year? How about your family food bill? Power utility? Clothing or tuition for your kids?

Maybe the stronger US$ is helping south of the 49th, but up here in Canada I'm not seeing anything, other than gasoline, that has declined. In fact the City of Calgary just announced property tax increases of between 21% and 25% over the next 3 years in their budget [good thing the bunker isn't inside the city limits].

Our commissars announced today that inflation went down in October and that wholesale, whatever that is, went down the most in 60 years.

I must live in the wrong town. Gas prices have certainly dropped, but prices at the supermarket are still rising. We haven't filled the propane tank in a while, so I can't remark on that. Mervyn's (retail chain, bankruptcy) held a liquidation sale with prices that ran higher than what we noted at a competing chain store (not bankrupt) just 150 yards away. I laughed out loud in the second store. Some of the little restaurants in the area have recently raised prices. Yesterday I popped in to buy a sandwich at the best place in town and promptly turned around. (this event will force me to learn how to cook better) The laundromats and the drycleaner have recently raised prices too.

[zadok]

Re: Whatever happened to all that inflation conspiracy talk?

The laundromats and the drycleaner have recently raised prices too.

Not for long.

[ASH]

Re: Whatever happened to all that inflation conspiracy talk?

I'm sorry but I don't think core-cpi is 'bogus' at all. In fact, I think it's the only sane indicator out there.

I believe the specific criticism of core CPI is its method of calculation. As EJ has written before, the more valid way to smooth out a volatile statistical series is to time-average -- not to discard the most volatile components. Further, if your methodology is to discard the most volatile components of the series, then you should discard the outliers for each data point without regard to their identity, rather than discarding the same components every time on the basis that they "normally" are the most volatile.

[Spartacus]

Re: Whatever happened to all that inflation conspiracy talk?

the CPI began diverging from reality according to John Williams a long, long time ago and got much worse in 1992. LONG before the housing bubble and LONG before the recent petrol price gyrations.

Most of the criticisms are still out there - housing & petroleum were only 2 criticisms of many - John williams lists several others.

hedonics and substitution, for example

And I don't see any indication that the people from whom the bogus (for all the things Williams cirticises) CPI took away money (cost of living increases)) are going to be made whole by petrol & housing price declines - remember that

(clarifying the wording here ..) And I don't see any indication that the people whose cost of living increases were stolen by the bogus CPI will be made whole by anything to do with housing & petroleum.

People were always complaining that core-cpi missed increasing housing prices and fuel prices.

Now that housing and fuel prices have dropped hard and core-cpi hasn't (reflecting the fact that prices aren't going down for most people), it doesn't seem so dumb.


I'm sorry but I don't think core-cpi is 'bogus' at all. In fact, I think it's the only sane indicator out there.

Not everything is a government conspiracy to keep the people down.

It's the inability to give credit where credit is due in some community forums that makes me question their general judgement.

[blazespinnaker]

Re: Whatever happened to all that inflation conspiracy talk?

I believe the specific criticism of core CPI is its method of calculation. As EJ has written before, the more valid way to smooth out a volatile statistical series is to time-average -- not to discard the most volatile components. Further, if your methodology is to discard the most volatile components of the series, then you should discard the outliers for each data point without regard to their identity, rather than discarding the same components every time on the basis that they "normally" are the most volatile.

The real problem with CPI is that there is no 'one number fits all'.

For some other people, eg: older people who mostly rely on food and medicare, inflation might be super higher. For others, dinks (double income no kids), who only eat out and drive hybrids, don't use medicare and aren't going to school, inflation might be something completely different.

The problem is, when CPI isn't measuring our particularly life style properly, we complain. When it does, we don't say anything. (How often do people say, wow, that government sure is smart!).

So now, if at any time, there is a segment of the population which isn't being fairly treated by CPI then therefore someone is always complaining about it.

[phirang]

Re: Whatever happened to all that inflation conspiracy talk?

The inflation talked ended when those helicopters expected to throw out dollars were strafing women and children, aka naive investors who went short the dollar.