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Old 07-18-2018, 06:11 PM
 
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Yep, modest inflation is a good thing and the goal of a central bank. It encourages investment.
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Old 07-18-2018, 06:34 PM
 
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Inflation rates aren't very good for predicting how much money you'll need in the future. The "Consumer Price Index" seems to be indexed to commodity trading prices and not sticker prices.

Sounds like the establishment either decided they wanted wider margins, or the rent was raised.
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Old 07-18-2018, 06:43 PM
 
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Nope, CPI is based on a basket of goods that includes weighted measures of products purchased by the consumer, not volatile commodity trading prices.

It's amazing how neatly a complete ignorance of how CPI is calculated mixed with conspiracy theory "the establishment" type stuff swirls together...
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Old 07-18-2018, 07:01 PM
 
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Quote:
Originally Posted by lieqiang View Post
Nope, CPI is based on a basket of goods that includes weighted measures of products purchased by the consumer, not volatile commodity trading prices.

It's amazing how neatly a complete ignorance of how CPI is calculated mixed with conspiracy theory "the establishment" type stuff swirls together...
And this diner isn't complaining about a grocery store receipt, is he?

Despite defining the method of CPI calculation, the trust in the accuracy of the inflation rate as a calculator of future budgets remains very low due to prices of many goods (and services) rising many times the inflation rate. Demand has much greater effect on the price of goods and services than inflation.

The "conspiracy theory" would not exist if these categories exceeding the stated rate had little effect on total annual consumer spend. The CPI suggests that a consumer can expect their costs to increase by x% each year, consumption remaining constant. This statement is not accurate in the least.
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Old 07-18-2018, 07:30 PM
 
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We have a favorite restaurant in a small city with relatively low income residents. Our typical tab for two there runs about $100, more if we have wine. I find that price much easier to pay than a $60 lunch for two at one of several local wineries where the menus are limited and the food mediocre on a good day.

But those prices have held fairly steady for some years, while the real increases - and this may be more perception than fact on my part - have occurred at the fast food joints. I just paid nearly 13 bucks for one double cheeseburger, a small fry, small drink and large shake.

Of course, I'm old enough to remember Bronco's in Pre-McDonald's Omaha where my date and I could get two burgers, two fries and two Cokes for less than a dollar. When we had the dollar.
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Old 07-18-2018, 07:36 PM
 
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Quote:
Originally Posted by ddm2k View Post
And this diner isn't complaining about a grocery store receipt, is he?

Despite defining the method of CPI calculation, the trust in the accuracy of the inflation rate as a calculator of future budgets remains very low due to prices of many goods (and services) rising many times the inflation rate. Demand has much greater effect on the price of goods and services than inflation.

The "conspiracy theory" would not exist if these categories exceeding the stated rate had little effect on total annual consumer spend. The CPI suggests that a consumer can expect their costs to increase by x% each year, consumption remaining constant. This statement is not accurate in the least.
There's no conspiracy theory. There is documented historical changes in the CPI that skew the annual changes down. Just replacing the phony housing and rent surveys in the CPI with the publicly available historical market surveys will increase the CPI's annual rate of increase by about 1.2-1.5 percent. .
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Old 07-18-2018, 11:32 PM
 
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Due to the exponential returns to talent, intellect, and skill, in a world where labor's share of wealth is declining, monetary inflation is flowing into assets, either financial or hard (real estate, collectibles, etc.).

Those who own such assets are doing better than most and they are inflating the price of the things they buy, like more assets, insurance, or consumables like fancy dinners, good booze, personal services (accountants, lawyers, dentists, advisers, personal trainers, etc.)... so [/b]consumer price inflation is a very UNEVEN phenomenon.[/b]

Stay home and bake bread, service your own well-used vehicle, dress simply and you will not notice it too very much.

Take cool vacations, go to sporting events, out to dinner, or to live concerts, and it is quite noticeable.

Buy your kid a BMW SUV and drive it to your lake house for their BFD catered graduation party, and, yeah, there's a ton of inflation. But the good news is you can afford it!

Last edited by PamelaIamela; 07-18-2018 at 11:52 PM..
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Old 07-19-2018, 05:18 AM
 
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Quote:
Originally Posted by ddm2k View Post
Despite defining the method of CPI calculation, the trust in the accuracy of the inflation rate as a calculator of future budgets remains very low due to prices of many goods (and services) rising many times the inflation rate. Demand has much greater effect on the price of goods and services than inflation.
Inflation is a measurement of the change in prices of goods and services, if demand changes prices it affects inflation.

Quote:
Originally Posted by ddm2k View Post
The "conspiracy theory" would not exist if these categories exceeding the stated rate had little effect on total annual consumer spend. The CPI suggests that a consumer can expect their costs to increase by x% each year, consumption remaining constant. This statement is not accurate in the least.
You're confusing your personal rate of inflation with CPI. Nobody should expect their personal rate of inflation to be exactly the same as the average.

Conspiracy theories exist regardless of facts, as you've demonstrated.
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Old 07-19-2018, 07:41 AM
 
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Quote:
Originally Posted by PamelaIamela View Post
Those who own such assets are doing better than most and they are inflating the price of the things they buy, like more assets, insurance, or consumables like fancy dinners, good booze, personal services (accountants, lawyers, dentists, advisers, personal trainers, etc.)... so [/b]consumer price inflation is a very UNEVEN phenomenon.[/b]!
That has been the prevailing trend for many years. People buy and do more expensive things as they become upwardly mobile. The CPI assumes everyone trades down to avoid price increases when they apply product substitution and chain-weighting.
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Old 07-19-2018, 09:14 AM
 
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Originally Posted by MechaMan View Post
$150 for two people to dine at a good quality establishment with 3 drinks each in the suburbs. 15 years ago it would be $75.

At regular inflation wouldn't that be a 30% change. Instead it's a 100% increase.

So if you had the same job getting only "merit" increases 2-3% Year over year you can no longer afford to eat here.
We go to fine quality burb establishments where food is $20 - $30 per plate and then we get a $30 bottle of wine two cocktails each for about he same. With tip we're right at $100 and that is if we feel like celebrating a bit.
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