Posted on 04/12/2011 2:56:10 PM PDT by The Magical Mischief Tour
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.
Getty Images Inflation, using the reporting methodologies in place before 1980, hit an annual rate of 9.6 percent in February, according to the Shadow Government Statistics newsletter.
Since 1980, the Bureau of Labor Statistics has changed the way it calculates the CPI in order to account for the substitution of products, improvements in quality (i.e. iPad 2 costing the same as original iPad) and other things. Backing out more methods implemented in 1990 by the BLS still puts inflation at a 5.5 percent rate and getting worse, according to the calculations by the newsletter’s web site, Shadowstats.com.
(Excerpt) Read more at cnbc.com ...
Its a bit like unemployment is actually near 16% using the older methods?
The list, ping
Let me know if you would like to be on or off the ping list
Using the damage to the pocketbook method, after buying gas, groceries, paying for insurance, tires, airline tickets and so on, inflation is way over 10 percent. The real misery index is about as high as it has ever been.
Ping! Over here....
America is finished. It will never come back.
You can substitute chicken for steak. Literally, that is what the Feds presume now when looking at inflation.
Plus, “hedonics effects” presume you love the quality of the air so much, that the crappy ethanol you put into your pump for more money actually REDUCES the cost of living.
OBTW - Newt Gingrich helped agree to these new measures as a way to save the Federal Government money by stiffing Grandma out of her Social Security Cost Of Living Adustments (COLAs).
When the price of housing goes down, the Fed assumes a reduction in the CPI. That’s because “Owners Equivalent Rent” is based on recent selling prices, NOT WHAT YOU ACTUALLY SPENT on your house.
So, your net worth is in the toilet, you’ve lost your shorts on your housing investment, don’t have the money to spend on anything else, and as a result Voila! The Fed tells you prices have declined.
Neat trick, but totally not of this world. Your mortgage payment didn’t change, but the Fed presumes it went down.
Just the cost of fuel the average family has seen 10% of their family income spent on higher fuel costs in the past year.
"Let's be clear -- my plan is working!"
Did you ever get in touch with your roommate?
He didn’t answer my email...... He’s a bit of a recluse; so you’re never sure what you’re going to get.
Absolutely untrue. Why do people need to make stuff up? You clearly have no idea what you’re talking about, so why comment? Do some research with actual documentation and technical papers instead of just reading blogs.
The Gateway I'm using cost the same as the Atari I bought 30 years ago, so do we figure prices by bucks per box or bucks per bits?
This may or may not be the complaint we're getting from "The Shadow", but even if it is there's more to it then quality (BLS faq here). We also substitute by fashion (Nehru jackets aren't considered anymore), by availability (buying strawberries when blueberries are out of season), by location (California oranges when Florida frosts) and so forth.
Anyone can make up a 'secret shadow' number and say it's true. If it means higher taxes then they get on CNBC.
Need to bring the peanut farmer’s MISERY INDEX BACK.
The key is to take those made up numbers and use them to sell newsletters. That's a true skill test.
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