Inflation Actually Near 10% Using Older Measure
Published: Tuesday, 12 Apr 2011 | 5:18 PM ET
By: John Melloy
Executive Producer, Fast Money
Executive Producer, Fast Money
After former Federal Reserve Chairman Paul Volcker was appointed in 1979, the consumer price index surged into the double digits, causing the now revered Fed Chief to double the benchmark interest rate in order to break the back of inflation. Using the methodology in place at that time puts the CPI back near those levels.
You can read the entire story here: (that is assuming they don't yank it first!)
Hehe yeah, especially with that kind of headline. Who would have thought to read something like that on CNBC?
ReplyDeleteI mean, I know that the managers of public perception think that the best conspiracy is an open conspiracy, but putting something like that in the daylight is just plain stupid for them.
This kind of sensationalist headlines is exactly what everyone preys on and believes. Now just step aside a moment and think, why would one use an methodology used in 80s to evaluate inflation currently. That methodology was chucked for something better cause as things change (consumption patterns), so must the constituents to the index used to gauge inflation and the correct statistical method.
ReplyDeleteTo simply go out there and use a 80's methodology, come up with an incredulous figure is just a way to create a sensationalist headline which in effect doesn't mean anything
there goes fed bonus to news corporation
ReplyDeleteThat's right, Pi! "In the best of all possible worlds, all is for the best." They're doing it for our own _good_.
ReplyDelete"Pi said...
ReplyDeleteThis kind of sensationalist headlines is exactly what everyone preys on and believes. Now just step aside a moment and think, why would one use an methodology used in 80s to evaluate inflation currently. That methodology was chucked for something better cause as things change (consumption patterns), so must the constituents to the index used to gauge inflation and the correct statistical method.
To simply go out there and use a 80's methodology, come up with an incredulous figure is just a way to create a sensationalist headline which in effect doesn't mean anything "
Wow. You're even better than Ben and his printing press. You just created a hundred words out of nothing and made it worthless instantly.
Everything that was changed about measuring inflation was done to make it appear less. It isn't. The middle class and working class don't spend their money on Ipads, they spend it on food and energy and housing or rent.
And IF they can afford lots of fancy stuff, then only because a) they maxed out their credit b) because these goods are only cheap because they're made abroad. Which means that the real economy that actually produces something and without the huge debt is much smaller, which means that living standards should be much lower, which means most of people's capital should be spent on basic things, which means the inflation measure should be about basic things, which means the current measure of inflation is a bunch of propaganda bailony (or at best, horribly stupid and inappropriate) and we would be better off with the one from 50 years ago.
Anyway, inflation is growth in money supply, price inflation is a guaranteed consequence and we do not really need to measure it.
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