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Pastimes : The Naked Truth - Big Kahuna a Myth
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To: KyrosL who wrote (84519)2/17/2000 11:16:00 AM
From: pater tenebrarum  Read Replies (3) of 86076
 
KL, if not for the fact that the govt. stats are in complete contradiction to the private surveys (NAPM and ECRI) as well as the fact that various raw materials and intermediate goods prices have risen sharply (crude +200% in one year, same goes for the distillates, steel + 50 % in the past 4 months, etc.) i would not be shaking my head in disbelief. in some areas (e.g. NYC) house prices and rents have increased by as much as 30% over the last year...medical (drugs) costs, insurance costs have gone through the roof, so why the heck are none of the govt. stats reflecting this???
the answer is simple: every month the weightings of PPI and CPI are changed...hedonic pricing and substitution assumptions further reduce the effects of goods and services that actually rise in price. every month, the BLS compares apples with oranges...there's simply no way these stats reflect reality.
one more thing: the classical interpretation of inflation is an increase in the money supply beyond the needs of the economy..and we've had plenty of that. mostly i admit it has been channeled into the stock market, but it is still inflation.

mind you, i'm on the same page with you regarding the SECULAR trend towards deflation - but i do believe that we have a strong cyclical upswing in inflation that the govt. stats fail to reflect.
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