Where's the inflation? US CPI unexpectedly drops 0.1%
- Thread starter Kassz007
- Start date
Price of beer, wine etc.
I compare the neccessary costs of living as an independent trader, which includes insurance premium hikes of 40%+/yr, and look at the 1% and lower inflation numbers reported each year. Somehow, the two don't seem to align.
Have a look at the birth death index adjustment, and see if you make any sense of it. I agree with others, the numbers as reported by gov. do not often reflect reality.
Quote from dtrader98:
I compare the neccessary costs of living as an independent trader, which includes insurance premium hikes of 40%+/yr, and look at the 1% and lower inflation numbers reported each year. Somehow, the two don't seem to align.
Have a look at the birth death index adjustment, and see if you make any sense of it. I agree with others, the numbers as reported by gov. do not often reflect reality.
I think many don't believe government numbers because of their own anecdotal experiences. Sure, you personally had a +40% hike in insurance premiums. Doesn't mean everyone did. If the official numbers don't jive with someone's personal situation, they will claim the official numbers are manipulated.
The fact of the matter is, the official numbers released by the government is the best information we have to go on for the country as a whole. I don't give a rats ass if you personally pay x% more for insurance, beer, hookers, whatever. What matters to me is what everyone, collectively as a whole country, is experiencing.
Glad to hear you don't give a rat's rear, nor did i expect you to.
And the point was to address your question on how do you measure inflation. Admittedly, that was biased towards how inflation affects me.
With regards to the 'rest' of the country have a look here.
http://www.shadowstats.com/alternate_data/inflation-charts
Here's more talking points (a bit older, but hedonics is still relevant).
http://articles.moneycentral.msn.co...nal/fake-inflation-numbers-masked-crisis.aspx
It should be the best information we have, since they have access to the best data, shouldn't it? Unfortunately, it's not the most accurate reflection of what it attempts to measure.
And regarding gov measures in general, if you believe birth-death adjustment reflects reality, I'm sure you also believe in the tooth fairy. Cheers.
Quote from dtrader98:
Glad to hear you don't give a rat's rear, nor did i expect you to.
And the point was to address your question on how do you measure inflation. Admittedly, that was biased towards how inflation affects me.
Point taken.
I will need to look at this more closely before I comment.
I have no idea what a birth-death adjustment is.
If you pay things like real estate taxes or tuition or health care insurance bills, you think inflation is 8 to 10%. If its fuels, its 30 or 40%. Food is only up about 10%.
But rent/cost to buy a house, or a car, are down.
Wages/earnings are down.
Its pretty obvious the numbers are dishonest, and the reason they need to be kept low is so that the government can reduce the standard of living for retirees quietly.
PS: the government uses the birth/death adjustment to pretend jobs are created during the year, then at the end of the year they "adjust" all the jobs created away. Another trick created in the 80's to make things look better.
But rent/cost to buy a house, or a car, are down.
Wages/earnings are down.
Its pretty obvious the numbers are dishonest, and the reason they need to be kept low is so that the government can reduce the standard of living for retirees quietly.
PS: the government uses the birth/death adjustment to pretend jobs are created during the year, then at the end of the year they "adjust" all the jobs created away. Another trick created in the 80's to make things look better.
Economic illiteracy and lack of objectivity is the norm around here, but let's put this birth/death nonsense to rest right now: the birth/death ratio is meant to adjust for the creation of new businesses that the Establishment Survey (the NFP - Non Farm Payroll report) might miss. As the Liscio Report, quoting the NBER, makes clear, differences between the Household Survey and the Establishment Survey are cyclical, with the Establishment Survey, where the ratio is used, falling behind and being less accurate than the Household Survey in recessions and the early stages of a recovery, since a lot of people, not surprisingly, work under the table when times are bad and gradually move out to the legit economy as things get better, first, and second, in the early stages of a recovery, new business growth will outpace the estimates used for the Establishment Survey.
So, just to make this abundantly clear, in bad times and when first coming out of a recession, the birth/death ratio and the survey where it is used, the Establishment Survey, will lead to a tendency to undercount the number of people actually employed, while in sustained expansions it becomes more accurate.
As of right now, according to Seeking Alpha, the Establishment Survey is well behind the Household, but both have turned up since December. This is consistent with the early stages of a recovery, which is pretty much what everyone thinks is where we are now. This point in a recovery is the point when the Establishment Survey most tends to undercount actual gains in employment, because it misses new businesses while at the same time continuing to miss the folks who are working under the table.
This is what the pros know. Which, of course, is different from what an Elite Trader knows.
So, just to make this abundantly clear, in bad times and when first coming out of a recession, the birth/death ratio and the survey where it is used, the Establishment Survey, will lead to a tendency to undercount the number of people actually employed, while in sustained expansions it becomes more accurate.
As of right now, according to Seeking Alpha, the Establishment Survey is well behind the Household, but both have turned up since December. This is consistent with the early stages of a recovery, which is pretty much what everyone thinks is where we are now. This point in a recovery is the point when the Establishment Survey most tends to undercount actual gains in employment, because it misses new businesses while at the same time continuing to miss the folks who are working under the table.
This is what the pros know. Which, of course, is different from what an Elite Trader knows.
Pimco's Gross Says U.S. Underestimating Inflation
There's quite a few people who work in the real world who claim the CPI is complete bullshit. It's the academics and economists who claim its legit.
And thus economists produce this:
(Source: Six Impossible Things Before Breakfast)
The B/D model was telling us that construction jobs were growing in 2007 even after housing starts fell off a cliff in late '06. And the financial sector was strong in '08 depsite the meltdown.
Old adage: Don't believe what the gubba'mint tells ya.
There's quite a few people who work in the real world who claim the CPI is complete bullshit. It's the academics and economists who claim its legit.
And thus economists produce this:
(Source: Six Impossible Things Before Breakfast)
The B/D model was telling us that construction jobs were growing in 2007 even after housing starts fell off a cliff in late '06. And the financial sector was strong in '08 depsite the meltdown.
Old adage: Don't believe what the gubba'mint tells ya.