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pandora
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Inflation at 10% using old rules

This seemed interesting to me. I KNOW we have a serious inflation problem. It seems as if our government has enlisted every Ivy league economist they can lasso to tell us our lying eyes are wrong.

Story is here - »www.cnbc.com/id/42551209

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.

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.

Our government has changed the basis it uses to compute inflation several times, each to make inflation seem less. This also makes it impossible without a normalization program to compare historic inflation to current inflation.

I know we are about to relive the late 70's, and maybe the early 80's, and am not looking forward to it.
--
"People demand freedom of speech as a compensation for the freedom of thought which they seldom use."


Midgard

join:2010-10-11
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I don't get what your driving at with this. If we used everything from 30+ years ago the world would be a different place but stuff changes every decade or so. As times change so does everything else. On the same token as the article if I used my pay raise percent from 1990's I'd be a lot richer today.
--
"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." -Warren Buffett



lugnut

@look.ca

What doesn't change is that we still need to put groceries in our kitchens and gas in our cars. But suddenly this stuff doesn't count as real inflation? Let's face facts, this is one of those instances where conspiracy theorists are right on the money. The gov't has been losing control of the economy for decades and rather than letting the public know what a p*ss poor job it's doing of managing things it simply spins bullsh*t numbers out of its ass to give the peons the illusion that inflation numbers are low.

And this is not only an American problem. It's worldwide among the G20 to maintain the illusion that the bus is under control as it hurtles over a cliff.


pandora
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reply to Midgard

said by Midgard:

I don't get what your driving at with this. If we used everything from 30+ years ago the world would be a different place but stuff changes every decade or so. As times change so does everything else. On the same token as the article if I used my pay raise percent from 1990's I'd be a lot richer today.

My point is government has changed the basis for computing inflation. The inflation we have today is unacceptable.

Some things don't change, if stuff costs more, we used to call it inflation, now we don't.

Our ability to communicate or understand things over time requires a relatively constant basis for language and mathematics.

2 + 2 is still 4. Do you suggest we change that, because it's the old answer, the same answer as 30 years ago??
--
"People demand freedom of speech as a compensation for the freedom of thought which they seldom use."


disconnected

@snet.net

It's all becoming very clear to me now, why all of this is happening. It's a progressive creeping process.
While Atlas Shrugged foretold this quite well in 1957 (movie hits the theaters tomorrow, BTW--Fairfield and Plainville, CT and 300 others nationwide), there is a new book out that takes AS to the next level. It's Starving the Monkeys - Fight Back Smarter by Tom Baugh. I watched his 90 minute lecture on Youtube and this guy has a better understanding of the Big Picture than all the conspiracy whackos, Liberals and Conservative pundits combined.

From his web site: »starvingthemonkeys.com/

• Why voting shouldn't be your primary tool, and how voting for even reformed incumbents only makes things worse.
• How protest movements can become a dead-end without a plan for individual action.
• How and why the system seeks to destroy anyone who thinks for himself.
• Why you need much more preparation than gold and guns, or heading for the hills.
• How to carve out personal and financial independence without attracting attention, while you prepare for the coming crisis.
• How to be worthy of assistance during and after a collapse.

Had Enough Yet? Then Fight Back Smarter

Productive people everywhere understand that their lives are being wrung of every drop of value, but it is hard to put your finger on why and how. Or more importantly, what to do about it. Yet, even though there are so few of us, we still hold all the cards. You just have to know how to play them.

We've seen elections come and go, and yet things seem to always get worse and worse no matter who gets elected. And no matter how much you talk yourself blue in the face, or wear your fingers to the bone online, too few people seem to "get it". A lot of what you hear in the media, even from your favorite pundits, still seems to miss the mark somehow.

How can this be? You may be one of the unlucky ones who have had everything you've ever work for destroyed. And yet there are many people around you who don't seem to notice anything is wrong at all. We keep hoping those people will eventually wake up, but they never do. Not even the intrusive policies of the TSA seem to make much of an impact on most people. As horrifying and unpleasant as this may be to you, most people seem to just simply accept the accelerating encroachment of their liberties. While you get madder and madder, and more and more exhausted.

There is a simple reason why so few people seem to care, and yet this simple reason eludes people like us, who thrive on creating value in the world. We're so busy working to improve things, we just can't see the world through their eyes.

The reason is that to all those people, you are the enemy. It doesn't matter whether you've ever threatened anyone, the simple fact that you think for yourself, and are bold enough to believe that you have rights and value as an individual, is downright terrifying to most people. And those people will take any amount of government abuse necessary, as long as bad people like you are rounded up in the process.

This is why your children are indoctrinated against your values in school, to breed more numbed populace who see you as the enemy. This is why working hard and playing by the rules brought us to the brink of ruin, because, as we are only now becoming aware, the game was rigged all along. This is why you have to swallow every bit of your inner self at work. Or, if you own and run your own business, this is why it gets harder and harder each year to stay afloat. This is why no one but you and your close circle seems to really be bothered about any of this insanity in any meaningful way. This is why not even those pundits and politicians "on our side" ever really seem willing to "go there". They only dribble out enough pap to keep us tuning in, or voting for them.

We would like to think that people are waking up. Some are, no doubt. But most people don't want to wake up, because the dream is nicer. And turning to government to take what they need from you is a lot easier, isn't it? If you are really honest with yourself, and evaluate those around you, you will probably find, unless you are extraordinarily fortunate, that there are just too few of us left.

We're facing a war on two fronts. On the one hand, we're faced with an enormous and growing entitlement population drawn from all walks of life, including those who adminster and protect that entitlement class, which is another whole entitlement class of its own. On the other hand, we're faced with the powerful elites who control the media, banking and government. Ultimately, elections don't matter because there are just too many of the one, and the other are too powerful. The suit monkeys on Wall Street, and their international banking partners, are able to whip up the masses into any frenzy they wish at the snap of their fingers. And to prevent us from making any measurable impact at all.

The necessary end result? A total economic collapse, of course. But you already knew that.

Take heart, though, because that collapse will finally break our enemy's hold on us. Read this book and find out how to win the war on the other side of the collapse. And what to do to improve your life, in meaningful ways, until that day arrives.

More practical and modern than Atlas Shrugged, this book fills in the gaps that popular political pundits won't touch.

Buy it now or look inside. Or download and read the entire "Chapter 2, Who Should Read This Book". As you can see, this book is about a different kind of survival skill, one that works today as well as being essential to pulling us out of a collapse later. But you've got to learn to hide among the monkeys, the right way, and protect yourself from them, until we get there. Or else the monkeys will single-out and destroy you now, before you ever get a chance to defeat them later.

And this is what makes them fear you.

Because they know your time will come.



Midgard

join:2010-10-11
MA
kudos:1

reply to pandora

said by pandora:

said by Midgard:

I don't get what your driving at with this. If we used everything from 30+ years ago the world would be a different place but stuff changes every decade or so. As times change so does everything else. On the same token as the article if I used my pay raise percent from 1990's I'd be a lot richer today.

My point is government has changed the basis for computing inflation. The inflation we have today is unacceptable.

Some things don't change, if stuff costs more, we used to call it inflation, now we don't.

Our ability to communicate or understand things over time requires a relatively constant basis for language and mathematics.

2 + 2 is still 4. Do you suggest we change that, because it's the old answer, the same answer as 30 years ago??

It's not simple math though. The .99 cent menu from 10 years ago is still .99 cents today. I've been paying between $2.00-2.50 per 12 pack of Pepsi for almost 15 years now. Lobster was $3.99 a pound at one point here this year! The lowest price in the last 20 years roughly. My last 2 computers have been the same price roughly. Both were about $750-800 yet the newest one is triple the power. A 2'x4'x8' is roughly the same price now as it was a decade ago. My auto insurance has dropped $40-70 a year over the last 3 years. There's no way to quantify all that into a single number just by doing the math. You need a formula that calculates that into a single number and that formula needs to be dynamic. It has to change to take all kinds of things into account and adjust for them accordingly to get a single CPI rate.
--
"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." -Warren Buffett

pandora
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said by Midgard:

It's not simple math though. The .99 cent menu from 10 years ago is still .99 cents today. I've been paying between $2.00-2.50 per 12 pack of Pepsi for almost 15 years now. Lobster was $3.99 a pound at one point here this year! The lowest price in the last 20 years roughly. My last 2 computers have been the same price roughly. Both were about $750-800 yet the newest one is triple the power. A 2'x4'x8' is roughly the same price now as it was a decade ago. My auto insurance has dropped $40-70 a year over the last 3 years. There's no way to quantify all that into a single number just by doing the math. You need a formula that calculates that into a single number and that formula needs to be dynamic. It has to change to take all kinds of things into account and adjust for them accordingly to get a single CPI rate.

The modifications to the determination of inflation are intended to present apparent mitigation. Similarly modifications to how unemployment is computed are also intended to mitigate those figures as well.

We must normalize stats every time the basis for them changes to get meaningful comparisons. Currently we have what historically would be 10% inflation.

That is not good, yet our government is bending over backwards to tuck it head up it's rear and deny we have inflation.

I recall Reagan and Volker taking this on in the early 80's, stagflation was no fun under Carter, and fixing it was no fun under Reagan. At least back then, government recognized the problem. Today we pretend it doesn't exist.

If statistics are to tell a story and provide meaningful information, they are useful. If statistics are to serve a governments agenda and make it look good, they are useless. Currently we have the latter with respect to inflation.

As an example, the historic inflation we have today is 10%, seniors receive a COLA based on inflation. Our government for 2 years has said there is no inflation, yet there is. Seniors have had 10-20% of their benefit taken from them, due to this massaging of numbers. It is not a good situation for those on fixed incomes to be in.
--
"People demand freedom of speech as a compensation for the freedom of thought which they seldom use."

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