There are several ways to mask inflation, I think. If you are offshoring major parts of your industry to low-cost countries, you will not notice the inflation in your currency when the costs are dropping.
Also, if you are in an economic downturn and people are out of work, demand drops radically which causes prices to drop, thus again masking inflation of the currency. Demand can cause prices to rise or fall quite independent of inflation.
Increased automation of production processes have helped to mask inflation for a long time, as well. Again, falling prices due to technology help to mask the erosion of the currency itself.
Then, finally, if the currency you are comparing to is itself in crisis and losing value, you may not see the inflation in your own currency.
An economy has several moving parts (actually, millions of them, technically). Still, its funny to hear them tell us there is no inflation while considering the elimination of dollar bills and small coins because they aren’t worth anything anymore.
They’re completely lying about the cpi. Check out shadowstats.com. Just like every other government issued stat, this one doesn’t hold water. Williams shows 5-6 percent right now if the old method was used. Yes things that you want have not gone up in price. Things that you need like food, energy and basic clothing have gone way up. But the CPI excludes food and energy. Yes you can get a great deal on a home in florida or las vegas. Yeah, the iPad and iPhone have gone way way up in power of their computing and the price has stayed the same, which under the CPI means they’ve actually gotten cheaper in price. But you can’t eat an iPad.
I really would like to see Paul Krugman respond to your points concerning the masking of inflation. I say this because I’m sure you are correct. In order to respond to your points, Krugman would have to come up with an atrocious lie that would be professionally embarassing for a vaunted Nobel prize winner. We could discover whether or not Paul Krugman is yet devoid of any pride.