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To: Sarmad Y. Hermiz who wrote (8964)5/17/2004 12:15:13 PM
From: Sam Citron  Read Replies (1) | Respond to of 13403
 
OT Sarmad RE: CPI

I understand your position. However, I believe that market prices and financing costs are two completely different things and it detracts from the validity of the CPI as a believable indicator of the fluctuating costs of real goods to combine them. Market prices measures the price of goods; the price of money measures financing costs. Consumers have a choice whether or not to finance their purchases and that choice depends in part on the cost of money. There are also millions of people who do not choose or need to finance their car purchases. I also think that hedonic adjustments distort the CPI and likewise serve to mask inflation.

JMHO,
Sam