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To: lorne who wrote (62019)	12/15/2000 11:00:02 AM
From: Alex	Respond to of 116753

<<While the economy is catching a cold that is in danger of becoming pneumonia many analysts are still mesmerized by the CPI. If it’s so modest what’s the problem? Well, for one, the CPI doesn’t measure inflation. And two, inflation is like one of those diseases in which visible symptoms do not emerge for a time and the victim still appears to be in robust health despite what is happening to his system. Failure to understand the true nature of inflation has led members of the economics profession to substitute past events for economic analysis. Hence it is seriously argued that because recessions or depressions have nearly always followed rapidly rising prices there is no danger of a recession today. Such people are forgetting the Great Depression followed a period in which the CPI remained comparatively stable while the opposite holds for the 1920-21 financial crisis. The moral: don’t put your faith in indexes.>> newaus.com.au