Posted on 06/17/2021 8:49:49 AM PDT by blam
The Federal Reserve has been bleating that inflation is "transitory"--but what about the real world that we live in, as opposed to the abstract funhouse of rigged statistics? Here's a simple test to help you decide if inflation is "transitory" in the real world.
Let's start with some simple stipulations: price is price, there are no tricks like hedonics or substitution. Nobody cares if the truck stereo is better than it was 40 years ago, the price of the truck is the price we pay today, and that's all that matters.
(Funny, the funhouse statistical adjustments never consider that appliances that used to last 30 years now break down and are junked after 3 years--if we adjusted for that, the $500 washer would be tagged at $5,000 today because it has lost 90% of its durability over the past 30 years.)
Second, inflation must be weighted to "big ticket" nondiscretionary items. The funhouse statistical trickery counts a $10 drop in the price of a TV (which you buy every few years at best) as equal to a $100 rise in childcare, which you pay monthly. No, no, no: a 10% rise in rent, healthcare insurance and childcare is $400 a month or roughly $5,000 a year. A 10% decline in a TV you buy every three years is $50. Even a 50% drop in the price of a TV ($250) is $83 per year--absolutely trivial, absolutely meaningless compared to $5,000 in higher big-ticket expenses.
You can forego the new TV but not the rent, childcare or healthcare. That's the difference between "big ticket" nondiscretionary and discretionary (meals out, 3rd TV, etc.).
(snip)
(Excerpt) Read more at charleshughsmith.blogspot.com ...
Good post—destroys the components of the phony CPI.
Liars in .gov gotta lie—it is what they do best.
Inflation IS transitory for members of the Fed and the governing elites. They have secure jobs, generous salaries, great benefits, and annual cost of living adjustments. So they don’t see the problem. Inflation is not a problem for THEM.
“appliances that used to last 30 years now break down and are junked after 3 years”
I don’t think that’s true. Therefore I can’t trust the guy’s reasoning.
You absolutely nailed it.
You can’t believe more than 15% of what comes out of government.
“transitory” = BS. Once this inflation gets embedded, it’s very persistent.
In 1960 a dollar (silver) purchased 5 gallons of gasoline. Today a dollar bill purchases a third of a gallon but a silver dollar purchases 8 gallons of gas.
Plus they all find ways to get their slice of the corruption pie. They all become multimillionaires feeding at the public trough and taking what they can from the pile under the table while they're at it.
You clearly haven’t purchased any appliances in the last 10 years, I would say 3 years is on the generous side for appliance life these days.
We’ve had 4 dishwashers in the last 10 years and had several repairs on two before replacing. My parents have had their dishwasher for 23 years and still going....
People need to track their costs of living. Their OWN costs of living.
And the government assumes substitutions. If steak gets too expensive, you will switch of chicken. They assume protein is protein.
The fact that the price of the steak might have doubled is irrelevant. Its a tricky thing the government has been doing to hide inflation.
The reason is that if real inflation were measured, the cost of money would go up. If the cost of money goes up, the cost of next years budget would go up—because we finance a lot of the expenditures with long term debt.
And anyone who has studied budgetary finance for more than ten minutes knows you should not finance “expenses” with long term debt.
For example, you use your debit card for groceries. You shouldn’t use your Home Equity Loan for them. (Or at least you shouldn’t—unless you have a good, disciplined plan. Most people do not plan or live that closely.)
I have had the same refrigerator for 15 years. My washing machine is 17 years. We just bought a new dryer after 12.
If you don’t buy crap...and take care of stuff...it will last.
Janet says it is and pedo joe says he hasn’t seen any evidence. Per Mark Twain: “No amount of evidence will ever persuade and idiot.” Just sayin’............
I don’t know. We bought a new washer six years ago and I’ve replaced the control board three times already. Also our three year old rather expensive double wall oven has a bad door hinge on the bottom unit that needs replacing. I could go on with stories about refrigerators, dryers etc. that haven’t lasted more the 3-4 years without major repairs. Thankfully I can do most of them.
You clearly haven’t purchased any appliances in the last 10 years, I would say 3 years is on the generous side for appliance life these days.
We’ve had 4 dishwashers in the last 10 years and had several repairs on two before replacing. My parents have had their dishwasher for 23 years and still going....
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Can relate to the above and is why most get repaired by the owner(me) instead of buying new ones. Examples with 2005 era appliances(bought new with current home), part of why some don’t get replaced:
dishwasher had motherboard replaced once,
side-by-side refrig had defrost heater and thermocouples replaced then 3 years later had the motherboard replaced(thanks lightning storm),
freezer had timer and defrost heater replaced once
I do get strange looks sometimes when folks notice my cellPHONE is a 1990 Qualcomm. Yes, I’ve never replaced my cellphone in 30+ years. eBay has supplied about 4 batteries in 30 years, phone itself has been dropped and drowned a few times but has not quit yet. Now they are trying to delete CDMA due to 5G but so far so good.
Good for you.
I do the same thing. People say, Bill, you need to get a new phone. Nope. This one still works and does everything it want it to do.
I remember when dishwashers didn't have "motherboards"!
Neither did clothes washers and dryers nor fridges or ovens. They worked with more than an ounce of water and actually heated up. And don't get me started on toilets!
Problem with the new crap is the electronics fail. The keypads, digital readout and PC board that they operate don’t last. That and they use crap bearings made in china because the whole unit is made in china or assembled from parts made in china.
We use a wringer washer that was made over 60 years ago.
I’ve got a Sears mower built in 1969 that still runs and cuts grass.
I’ve got a 1981 Mitsubishi compact tractor with a 3 cyl mechanically injected diesel that still runs good. Could use a set of rings and might as well do bearings and then it will likely go another 40 years. No electronics on it. Electrical system consists of a starter, alternator, glow plugs and headlights.
All that stuff has electronics now, even riding mowers and they don’t sell parts for stuff like that anymore or only sell them for a few years.
Automotive computers are built pretty well but eventually, the capacitors blow and sometimes it eats up the PC board because the stuff that leaks out of capacitors is corrosive. They generally last 30 years or so.
“I don’t think that’s true. Therefore I can’t trust the guy’s reasoning.”
totally agree ...
“I’ve replaced the control board three times already. “
I’d say there’s something outside the control board that’s causing the problem. You’ve probably looked for that too.
““appliances that used to last 30 years now break down and are junked after 3 years”
I don’t think that’s true. Therefore I can’t trust the guy’s reasoning.”
I don’t blame you. He has taken a valid point (appliances don’t last as long as they used to) but then exaggerates the point. I certainly don’t replace appliances every three years.
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