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From 76-80 inflation was reported to be very high, in double digits. Ronald Regan used it as his means to get elected. gas was 50 something cents then. After the election Regan removed gas fromt he inflation numbers... artificially making inflation look better. I hear food has been removed as well which ,akes me wonder what in the world is it looking at.
Does anyone know if anyone compiles the true inflation numbers with food and gas still included? What is our real inflation rate minus the political lies used to make us feel better?
I found a web site that identified the monthly inflation rate which made me realize we don't hear it annualized anymore... WQhen Carter was in office the news media reported all the time the annualized inflation rate.. interesting how that has changed. According to this one web site which I couldn't find out what it did include. Here are the annualized numbers
2007 - 37.1%
2006 - 42.08%
2005 - 44.09%
2004 - 34.71%
2003 - 29.54%
2002 - 20.62%
2001 - 36.82%
2000 - 43.9%
If this does not include gas or food then how bad is it really?
Now we only get inflation reported in monthly figures because we dont want to tell the truth and upset the masses.
From 76-80 inflation was reported to be very high, in double digits. Ronald Regan used it as his means to get elected. gas was 50 something cents then. After the election Regan removed gas fromt he inflation numbers... artificially making inflation look better. I hear food has been removed as well which ,akes me wonder what in the world is it looking at.
Does anyone know if anyone compiles the true inflation numbers with food and gas still included? What is our real inflation rate minus the political lies used to make us feel better?
I found a web site that identified the monthly inflation rate which made me realize we don't hear it annualized anymore... WQhen Carter was in office the news media reported all the time the annualized inflation rate.. interesting how that has changed. According to this one web site which I couldn't find out what it did include. Here are the annualized numbers
2007 - 37.1%
2006 - 42.08%
2005 - 44.09%
2004 - 34.71%
2003 - 29.54%
2002 - 20.62%
2001 - 36.82%
2000 - 43.9%
If this does not include gas or food then how bad is it really?
Now we only get inflation reported in monthly figures because we dont want to tell the truth and upset the masses.
Add your research to the thread... any insights?
Using your numbers since 2000, this would have resulted in the prices of everything having gone up 11.7 times since 2000 (the compounded rates over the time period). In other words, if gas were $1.00 a gallon in 2000 (which it was not) your source's numbers would indicate that gas is now at $11.70 a gallon.
By the way, if those numbers were correct, certificate of deposit rates would be about 31% (there is a direct correlation between the inflation free rate of money and the inflation adjusted amount that financial institutions would be paying).
Ok if these numbers were not accurate... what are the real numbers? including gas and food? this was the whole query reason. I just posted what I saw.
The broad inflation numbers are extremely complicated in their formulation and are meant to be useful at the macro economic level - very heady stuff to make broad policy type decisions on the economy. For an individual, they may not have much meaning depending on just what it is that makes up your individual marketbasket of things that you usually buy.
Let's say that you buy pretzel rods a lot (it is a meanigful part of your market basket). If you paid $1.00 last year and this year it costs you $1.06, the "inflation" rate for pretzels is ($1.06 - $1.00)/$1.00 = 6%. If you bought gas last year at $2.80 / gal and this year it costs you $3.40, then the inflation for you is 21.4% on gas. Now you weight all of the things that you buy (the proportion of what you use in your total marketbasket), and that is a simplified version of your real inflation rate.
There are indicies for just about everything. If you want to know what the inflation rate on eggs is, the BLS has it for you to see. So you can develop your own personal inflation rate based on what it is that you buy.
When you hear about substituting things, like chicken for steak, things get a bit more complicated. This is what gets people all in a tizzy about the reported rates. But if you are really interested, all the info is available. I used to break down the material, labor and burden components of contractural purchases by dozens of indicies to come up with a meanigful request for price increase so I like this stuff. If you don't, then do not get hung up on one all encompasing number.
UPR is right. The figures promoted as inflation rates don't make much sense. I remember years ago being quizzed on the price of movie tickets by an official government researcher, as that was part of the CPI at the time. The questions made no sense, the answers I provided reflected that.
People create their own inflation. How many have extended cellphone contracts, high cable bills, credit card debt, and a multitude of other costs that simply weren't possible twenty or thirty years ago?
If you want interesting data on what crisis inflation is, try here:
"Most Americans take food for granted. Even the poorest fifth of households in the United States spend only 16 percent of their budget on food. In many other countries, it is less of a given. Nigerian families spend 73 percent of their budgets to eat, Vietnamese 65 percent, Indonesians half."
First off, inflation is not a rise in prices. Prices rise because the currency used to buy those things (in our case, the US dollar) depreciates in value. I guess it is old news now that the dollar is on the skids. Yet I'm puzzled why more people don't make the connection to "inflation". Inflation, correctly, refers to debasing the currency by printing more of it.
That the Fed has been on a printing rampage for the last several years is an understatement! In March of 2006, just around the time that Ben Bernanke became chairman of the Fed, it was decided that M3 - the broadest measure of money supply - would no longer be published. And since then, for the past 2 years, it hasn't been; that would make inflation difficult to determine.
But have no fear: there are whizzes out there who use other indices to re-create M3! John Williams of shadowstats.com (not advertising) has re-created it, as have a couple of others. So if you want the latest figure of what inflation really is in April of 2008...
I took a macroeconomics course at the University of Memphis last semester (Fall 2007) and the professor asked the class to raise their hands if we thought inflation was currently a problem for America. I promptly raised my hand high, acknowledging what I thought would have been the common consensus. As my hand was raised, I looked around at the other 50-60 students and realized that I was the only person raising a hand! Then the instructor displays a diagram showing how remarkably low and stable inflation was, a mere 3.0-3.5% for this millennium.
To avoid looking like the class idiot, I spoke up and said, “What about housing, energy, & food prices which have all gone up considerably more than 3%?” He dismissed my suspicions by explaining that our price indexes do not include such volatile goods and further elaborated on how consistently low our inflation has been. I felt like saying, “Oh… I see! So while all of our basic necessities are experiencing hyperinflation, we should really only be concerned with the price of iPods, Plasma TVs and all those other goods and services that are NOT must haves.” Alas, I didn’t bother arguing as I could tell he was adamant on sticking to the textbook. Besides, I wanted my A.
Also, I was watching on the news recently that the cost of college education has increased by 7-8% per year, and that is NOT something that is volatile. When a college raises its prices they almost never retrace, they just trend higher.
I fully understand what inflation is. and know it primarily is a factor as the cost of production for goods goes up. While the value of the dollar will have an impact on the goods imported or made from imports ( that means nearly everything) The increase in the cost of the good isimpacted from more than that. It would also be very individual on the various currency we are comparing to, be it yen, or Euro. While the dollar slides against one currency it isnt a given it will slide with others.
Presently as we see oil move from $36 / barrel to 100+/ barrel we face an increase in shipping costs and things that are byproducts of oil, such as plastic, cosmetics, food preservatives, disposable daipers and the thousand other products. With a dramatic price increase of a fundamental ingredient we have a ripple effect with the prices and see the increase in our daily expenditures.
When milk goes from $3.29 to $5.49, eggs from .79 to $1.89 then I have a clue the cost of goods has increases at unheard of levels. Just because the government removes food and the things we use daily from the inflation rates does not make me feel better. My point is that we have a government that wants to sanitze the information so the masses are not upset to find out we have a better than 50% inflation rate in some cases.
The question again returns to where are the figures for the increase in food prices and fuel... and the other items that make up our daily life.... the same things we use to measure before Ronald Regan took office?
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How To Figure It CORRECTLY
