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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (12448)	9/28/2004 11:06:42 PM
From: CalculatedRisk	Respond to of 116555

I think that inflation is understated perhaps as much as 1%. On that issue, I agree with Gross. I would argue it is mostly from the "rent equivalent" calculation - and in a recent FED paper, the authors agreed with me. Hedonic pricing makes sense for many products (like your auto example). But I doubt text books are getting better; I would argue that some of them are getting worse (especially civics and history reading some of the posts on SI<g>). I'm not sure how much transparency there is in the FED's calculations ... that would be interesting. Substitution also makes sense. I no longer buy fruits and vegetables at the grocery store; I go to a "Grower's direct" outlet for less than half the price. The fact that apples have doubled in the last year (at my local store) doesn't impact me. Many people now do their grocery shopping at WalMart or an equivalent discount store. I am concerned about the impact on GDP. But, in general, I think Gross (like Fleck and Grant before him) are overreacting. Best Regards! (I need spell checker back <g>)