Quote of the week, "Inflation's down except for what you actually buy,"
Another good one: "In the mid-1990s, a commission headed by prominent economist Michael Boskin concluded that the index exaggerated inflation by understating the rising quality of goods and services, as well as the tendency of consumers to buy less of a given item when its price rises."
Isn't the definition of inflation, rising prices?
Also, product quality has gotten worse over the past two decades (flimsy plastic instead of wood; flimsy plastic instead of chrome, etc.)
When I was little, you could receive a toy without worrying if a toy's button would pop off and create a choking problem for children. Today, parents are avoiding so many of the poor quality toys for children younger than four.
RE: "The single biggest distortion in the government's main inflation index involves housing, Grant said."
So true.
RE: "To a degree, the expectations can be self-fulfilling, noted Sung Won Sohn, Wells Fargo's chief economist. Higher gasoline prices, for instance, have a broader economic effect only to the degree that they encourage an upward spiral of wages and prices. So far, he said, "It's not spreading to the rest of the economy. The inflation expectation is low."
This part was interesting. But I think the inflation is already out of the bag. Prices have already risen.
Regards,
Amy J |
