Sunday, October 17, 2010

An alternative to the government-approved statistics

Well, by now we've all heard that there is no inflation out there, and, as a matter of fact, some of our alleged economic gurus think that the Fed should stimulate some--just to keep the economy healthy. After all, it's done such good things for us over the years.

However, if you look at how the best known measure of inflation--the Consumer Price Index (CPI)--is calculated (not to mention how the process has been manipulated over the years), you'll note something interesting. Two items, food and energy, are deliberately removed from the "Core CPI", which is the number usually reported in the media. Because these items are subject to frequent price swings, their removal from the Core CPI has the effect of lowering the number most of the time (recent case in point).

I don't know about you, but I don't know anyone who doesn't eat and who doesn't use energy.

Apparently, the bright folks at Google also have some issues with the government numbers, and are looking into developing their own high-tech, near-real time measure of inflation.

I know there are already places like Shadow Stats where, for a fee, one can get similar data. But for those of use who can't afford it, this may be an interesting alternative to the official government lies numbers.

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