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you need to understand what the gov't inflation numbers mean .
they are not the same cost of living you are measuring at the store. it isn't because they are manipulated ,it is because it is weight to match how we spend.
as an expample housing accounts for 41% of the median americans budget so it is weighted at 41% of the index. tuna fish can jump 50% and gas can jump 5% but if housing is down or the same, SINCE MANY AREAS HOUSING IS STILL DOWN OR STAGNANT , then as a national average your weighted inflation is very low.
gasoline runs 5% of the median budget so if gas falls it offsets a huge increase in say milk which is 1% and tomatos and corn and lots of other stuff that are small expenditures in comparison.
those who cry foul have little understanding of how the cpi is figured.
most who refinanced or bought homes since 2007 have saved a bundle from what their expenses would have been.
never confuse your own personal cost of living with the cpi ,they are not the same thing for the most part.
in fact we got a new obama gold plan this year for health insurance , un-subsidized. basically they are pay as you go. if all we do is see our primary doctor and have little emergency room or hospital admissions our basic cost of insurance will be 5k less than we were paying.
that 5k drop in healthcare is huge in our personal cost of living index. we can cover a whole lot going up with that drop.
like i said folks claim foul or manipulated when they look at the cpi numbers but that is because they have little understanding of how it is computed.
IT IS WEIGHTED TO THE PERCENTAGES THE HYPOTHETICAL EXPENSES WOULD CONSUME OUR INCOME .
there is another index called the daily price index someone created which shows 8% inflation but it really is bogus since it is not weighted and removes housing from the equation. now you may not buy a house every day but you certainly pay a mortgage every month and it is your biggest cost factor in your budget.
pretending the costs of housing you does not exist is really not an accurate picture of what is going on over all.
Last edited by mathjak107; 02-26-2014 at 03:52 AM..
you need to understand what the gov't inflation numbers mean.
they are not the same cost of living you are measuring at the store. it isn't because they are manipulated ,it is because it is weight to match how we spend.
as an expample housing accounts for 41% of the median americans budget so it is weighted at 41% of the index. tuna fish can jump 50% and gas can jump 5% but if housing is down or the same as a national average then in reality your weighted inflation is very low.
gasoline runs 5% of the median budget so if gas falls it offsets a huge increase in say milk which is 1% and tomatos and corn and lots of other stuff that are small expenditures in comparison.
those who cry foul have little understanding of how the cpi is figured.
most who refinanced or bought homes since 2007 have saved a bundle from what their expenses would have been.
never confuse your own personal cost of living with the cpi ,they are not the same thing for the most part.
in fact we got a new obama gold plan this year for health insurance , un-subsidized. basically they are pay as you go. if all we do is see our primary doctor and have little emergency room or hospital admissions our basic cost of insurance will be 5k less than we were paying.
that 5k drop in healthcare is huge in our personal cost of living index. we can cover a whole lot going up with that drop.
Your 100% correct in everything you just stated. I'm sure you noticed that my posts are usually pretty long. I didn't want make it even longer by breaking down the technical details of how CPI is calculated. I understand how its calculated. The tuna can was just a very basic example to illustrate the concept I was touching on. Its not that the government manipulates to a point where they lie. Its just they will tell what they want you to hear and base it only off of one part of their studies.
For example, if we are talking about the official unemployment numbers the figures they use to sound the trumpet is the numbers that don’t include people who have "dropped out" of the work force. If you sift through the depths of the census bureau numbers they actually mention that figure does not include the previous mentioned group. They even include how many people are in that group so you can calculate the numbers yourself.
But lets be realistic about this, most people don’t even know where to look up the detailed numbers. Out of those that do, most of them don’t even realize that the “dropped out” people aren’t counted or don’t have the education in that particular field to interpret the numbers. So this only leaves a very small percentage of the population that knows the actual number.
Out of those people how many do you think actually spread the word? Not most because these topics are considered a snooze by most people and you won’t do well socially if you try to force these topics into typical conversations. To date I have probably spoken about these things to maybe 3-4 people in my ENTIRE LIFE.
To sum it up, the most accurate figure of how bad our unemployment situation is to look at what percentage of population participates in the workforce. This figure paints a whole different picture. The CPI data is also calculated in the same manner where inflation is grossly under exaggerated. So I understand how they calculate CPI. What I was saying is that the way its calculated shows inflation in a very misleading light.
I just read the extension of your previous post. I agree with the 8% being very unrealistic. I didn't use any of that crap as a basis for inflation being higher then what CPI states. In my post regarding the tuna can, if you read the next part; thats what I base my estimation of inflation by. And thats using actual CPI inflation rates.
Last edited by griffon652; 02-26-2014 at 04:19 AM..
we have been hiring for years . we have folks coming in for low level warehouse jobs and tell us they won't work for less than 20 bucks an hour.
they tell us their unemployment insurance and working off the books equals up to that amount.
much of the unemployed are actually employed but off the books.
much of the un-employed are no longer even employable.
drug testing ,background checks , credit checks and minimum education requirements have eliminated them from even being employable. many speak english so poorly even if they can pass the above you don't want them.
we have been hiring for years . we have folks coming in for low level warehouse jobs and tell us they won't work for less than 20 bucks an hour.
they tell us their unemployment insurance and working off the books equals up to that amount.
much of the unemployed are actually employed but off the books.
much of the un-employed are no longer even employable.
drug testing ,background checks , credit checks and minimum education requirements have eliminated them from even being employable. many speak english so poorly even if they can pass the above you don't want them.
I'm not talking about employed numbers. I'm talking about the people who aren't counted in the unemployed numbers. If you would like me to get into the technical details I would be happy to. I just kept it short because based on your posts I just assumed you knew them.
As far as people "being unemployed off the books" or "unemployable", not going to get into that with you. That would be the equivalent of assuming low inflation on food by basing it off the assumption that people should budget and buy only food products that have had the lowest inflation rate. Another words "off the books" and "unemployable" numbers are a pure hypothetical opinion without any solid studies we can base our conversation off. That discussion between us would be the equivalent of “he said, she said”
I would like your opinion on my previous post though. Even by official CPI numbers the inflation rate from 1970-2014 is 4.1%/yr. This is not a number you will see them announcing; which is part of the reason I mentioned the government likes to “paint a rosy picture”
I just recently started saving links for all the research I do. Unfortunately I literally didn't save links for hundreds of official numbers I have studied. I do remember them as far as what they contained but sometimes I won't be able to provide a link like I do because its just too time consuming going through all the data to find very specific information. This includes the following information, though I guarantee you that its 100% accurate.
I have read up on the modern method the government uses to calculate inflation; they calculate it based of essentials that people need in certain catagories to sustain a minimum standard of living. Each category has different sup-categories that define the minimum.
What is considered a minimum standard is also broken down regionally for an even more accurate calculation. For example, for housing in the north minimum standard for housing would include the sub-category "minimum comfortable indoor temperature" to keep the house at a comfortable level during the winter/summer.
In the south the only measure to calculate this would be electricity cost because an HVAC system is pretty much the only option most people have in the south for temperature control.
In the north however there are multiple heating sources. So the government can use the term "minimum comfortable indoor temperature" (which is very vague) and pick the cheapest fuel source (in terms of increasing inflation) that people in that region can use that year to calculate the inflation for that category.
For example: (purely for demonstrating concept. None of what I’m writing in this example is accurate in terms of data)
Let’s say the two primary fuel sources are wood and kerosene. If wood had an inflation of .5% vs. 5% for kerosene in one year the government can legally give wood more weight without breaking any established principle/law. The next year they can do it again and switch these however they please.
This is how they manipulate the data. There many legal ways they can do it that’s not detectable. Just look at my example of 4.1%/yr inflation. By doing something as simple as announcing numbers calculated from 1980-present, they can lower that number to 3.1%/yr; even though the majority of the population being affected most by inflation increase were born in the 50’s on up.
I don't really pay a whole lot of attention to anything other than my own personal inflation index.
I rent and have seen nothing but housing costs rise. I have no debt and have not benefited from lower rates.
however I have also seen my net worth soar over the years . I am totally ahead overall so it is all good in the hood.
in fact my potential drop in medical costs totally eclipses every rise I have been hit with.
most folks who have 401k's and ira's have seen increases in net worth far beyond what their goods and services went up. especially since most of America carrys heavy debt and debt service costs are down big time .
my sister lives in Arizona and refinanced a few years ago. her monthly bills overall are less then years ago.
it is all about our own personal situations as the gov't numbers apply to everyone and they apply to no one.
it is your income/investment side vs the expense side that really counts.
looking at one side without the other really does not paint an accurate picture of your situation.
Last edited by mathjak107; 02-26-2014 at 06:06 AM..
Good points. But they are the reason why I can answer that question with certainty. I have been part of the extreme lower class and the privileged class. Plus I have done extensive unbiased study into the areas which we are discussing.
Your point of view is absolutely valid for yourself and a lot of those around you. But as you stated most views don't fit everyone. And by your admission you stated your views are local.
This is why I try to make points that apply to the majority whenever I can. So I will leave you with something completely verifiable and only using absolutely concrete/official government numbers provided from their own websites to show you just how much inflation has outpaced income for a majority of the population.
I'm also using only modern numbers because these numbers have been manipulated in terms of how they calculate inflation. But I wanted to show you that even with the manipulations they can't hide the sad state of the average American. I'm providing you with official government links so you can verify my math yourself because I don't want you to have doubts regarding my objectiveness in making this point:
The official inflation rate from 2006-2014 was 2% per year.
The median individual income of the 50th percentile only increased by a mere 1.25% per year during this period. The lower you go in percentile the lower the increase. The inverse is true for the higher percentile of income earners.
I haven’t done the math in a while so I forgot off the top of my head exactly at what percentile the US population starts to keep up with inflation so I randomly picked a high percentile that I thought was correct. I picked the 74.15% percentile and the pay increase was still only 1.6%. So I’m guessing the even point is probably around the 80% percentile. So as you can see even by the governments own rosy admission most Americans don’t even keep up with inflation.
Just one last thing, based on the amount of time you have been on this site and the great quality of your posts; I’m sure most people you talk to that give you figures and information were probably very off in their information compared to actual facts. They probably were just trying to prove that their inaccurate view was correct. I can assure you I’m not one of them.
I don’t care about being right, I never have. I care about giving objective, factually accurate information. For this reason I won’t ever give you information I’m not sure about and there’s many subjects where I have rudimentary knowledge lol. My point is you don’t ever have to worry about me trying to “sway” you to my opinion with my posts. I will never give you anything that’s not a cold hard fact.
Last edited by griffon652; 02-26-2014 at 07:18 AM..
Please read post #153, I describe this concept in detail in a way where its almost universal for all individuals. By the way I don’t know what you meant by its generally not possible to buy a one bedroom apartment. But if I take that statement at face value that’s completely inaccurate.
It really is. This is from extensive research and owning properties myself. I literally know all the figures for rentals around the nation. I even know the legality behind it. Even the government has a rental guideline for all areas of the nation. And all of them will fall within the percentage range I gave. Those figures are 100% accurate. That’s why I said it literally doesn’t make any sense to rent if you plan on staying in one area for more then 2 years. Here is just one random link regarding the topic. If you doubt me do the research and you will see that all data will agree that the numbers in the link below are accurate:
Unfortunately there has been so little completely verifiable, completely accurate data on historical property appreciation that even among experts there is disagreement in terms of the appreciation. But general consensus is that its anywhere from .7-2% over inflation. So your chances of having a -1% is extremely low.
This amounts to a misunderstanding of property appreciation, as I explain in post #162.
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