Inflation perceptions will vary according to different spending patterns. That is why it is important to have honest measurement, which CPI is not.
Somebody living in a cold climate, that just bought his first home, commutes to work 50 miles each way, maybe is taking care of a sick parent, likes to eat out a lot, stays in hotels a lot, and is not an electronics/computer geek will perceive inflation to be 20%.
On the other hand, somebody that lives in warm climate, has owned a house for at least a decade, has his property taxes capped, walks to work, cooks at home, no medical issues, and who derives more pleasure from spending money on electronic gadgetry and computers rather than travel and leisure, will perceive inflation to be 0%.
The truth is somewhere in the middle. |
