Let's see. Simple math - it gets better with more stuff!
Say, you spend
$2000 on gas, $2000 on food, $2000 on computers, $2000 on
clothing, $2000 on toilet paper, $2000 on consumer goods,
$2000 on books in 2007.
Then you spend
$4000 on gas, $2040 on food, $1800 on computers, $1900
on clothing, $2020 on toilet paper, $1980 on consumer goods,
and $2060 on books in 2008.
Your expenses grew by $1800 in 2008 compared to 2007,
or 12.86%.
The Government calculates that your CPI increased 8.728%,
so you spent $1221.92 more on those items in 2008 than
you did in 2007.
But, guess what? You are STILL $1800 short in 2008.
So, you ain't gonna buy no new computers -ggg-
And Yo, there is also hedonics - you spent $2000 on
a new computer in 2007, then $2000 in 2008, but since
the CPU speed is 20% faster, that 2008 computer now
dropped in price to 1666, according to BLS. Did you request a
refund at your Circuit city? <G>
Now, why are commodities soaring and the dollar is dropping
while the CPI is so low? Must be those darn hedge funds
blowing another bubble! |
