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Inflation: Not as low as you think

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posted on Mar, 1 2012 @ 03:18 PM
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Inflation: Not as low as you think


www.cbsnews.com

Forget the modest 3.1 percent rise in the Consumer Price Index, the government's widely used measure of inflation. Everyday prices are up some 8 percent over the past year, according to the American Institute for Economic Research.

The not-for-profit research group measures inflation without looking at the big, one-time purchases that can skew the numbers. That means they don't look at the price of houses, furniture, appliances, cars, or computers. Instead, AIER focuses on Americans' typical daily purchases, such as food, gasoline, child care, prescription drugs, phone and television ser
(visit the link for the full news article)




posted on Mar, 1 2012 @ 03:18 PM
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This seems to be closer to what inflation really is despite the governments figures of 3.1 percent. Actually I would be surprised if it wasn't higher.

Add to that the falling worth of the dollar due to over printing and what we may see in the next year to come could easily be 6-7 dollar a gallon gasoline and bread may be 5 bucks a loaf soon enough. This doesn't even figure in any possible war scenario or the EU failing harder.

What kind of estimates do you think we may see in the up coming year?

www.cbsnews.com
(visit the link for the full news article)



posted on Mar, 1 2012 @ 03:27 PM
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I don't care to guess where the next year is taking us, but if gas prices do hit $5-6/gal any economic recovery that we were looking at will probably be erased. Inflation has already way outpaced wages, and people are already struggling to feed their families we cannot afford to take many more hits.



posted on Mar, 1 2012 @ 03:31 PM
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Looking at my purchase power eroding, I'm surprised it's not higher than that. I'm sure there is no projection they are going to lower anytime soon.



posted on Mar, 1 2012 @ 03:31 PM
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I'd like to see the formula for how they calculate the inflation ((T1 - T0)/T0)*100 - whatever we think is best for public knowledge.



posted on Mar, 1 2012 @ 03:32 PM
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Originally posted by diddlydo
I don't care to guess where the next year is taking us, but if gas prices do hit $5-6/gal any economic recovery that we were looking at will probably be erased. Inflation has already way outpaced wages, and people are already struggling to feed their families we cannot afford to take many more hits.



i'm with you on that. Just seems a crazy mess compared to what our legislators are feeding us. It seems to me they should be preparing us all for the inevitable instead of lying to us with a smile. So many families are not prepared for the economic woes coming our way and if they had more warning perhaps they could put a little something aside or learn some basic survival skills.



posted on Mar, 1 2012 @ 03:38 PM
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Originally posted by satron
Looking at my purchase power eroding, I'm surprised it's not higher than that. I'm sure there is no projection they are going to lower anytime soon.


I know I have been busy trying to buy ahead on anything I feel my family and I may need to get by in the upcoming year, but 8% in one year is ridiculous. Medical supplies, grain food, tools and anything else I can figure on needing. We can't really buy ahead for fuel which I think will be the deciding factor along with the dollar devaluing that will hurt us the fastest.

Also getting together with your community and discussing how we can all help each other get by in such a case would help, but nothing other than a smile and wave attitude comes out of D.C., really makes me mad.



posted on Mar, 1 2012 @ 03:40 PM
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Originally posted by PageAlaCearl
I'd like to see the formula for how they calculate the inflation ((T1 - T0)/T0)*100 - whatever we think is best for public knowledge.


Here is an official index, for what it's worth. lul


Seasonally adjusted changes from
preceding month
Un-
adjusted
12-mos.
July Aug. Sep. Oct. Nov. Dec. Jan. ended
2011 2011 2011 2011 2011 2011 2012 Jan.
2012

All items.................. .3 .3 .3 .0 .1 .0 .2 2.9
Food...................... .4 .5 .4 .2 .1 .2 .2 4.4
Food at home............. .6 .6 .6 .2 .0 .2 .0 5.3
Food away from home (1).. .2 .4 .2 .2 .3 .2 .4 3.1
Energy.................... .9 .8 1.5 -1.8 -.5 -1.3 .2 6.1
Energy commodities....... 1.3 1.1 1.9 -2.6 -.6 -2.0 .9 10.0
Gasoline (all types).... 1.5 1.2 2.0 -2.8 -.9 -2.1 .9 9.7
Fuel oil (1)............ -1.7 -.4 -.7 -.5 2.7 -1.0 1.4 12.1
Energy services.......... .1 .3 .8 -.4 -.4 -.2 -.8 .5
Electricity............. .5 .1 .6 .2 .2 -.1 .0 2.4
Utility (piped) gas
service.............. -1.2 1.0 1.5 -2.6 -2.6 -.6 -2.9 -5.5
All items less food and
energy................. .2 .2 .1 .2 .2 .1 .2 2.3
Commodities less food and
energy commodities.... .2 .3 -.2 .0 .1 -.1 .2 2.2
New vehicles............ .0 .0 -.1 -.2 -.2 -.2 .0 3.2
Used cars and trucks.... .8 .7 -.5 -.4 -.4 -.7 -1.0 3.2
Apparel................. 1.0 .9 -.7 .4 .5 -.1 .9 4.7
Medical care commodities
(1).................. .0 .1 .2 .3 .2 .2 .6 3.2
Services less energy
services.............. .2 .2 .2 .2 .2 .2 .2 2.3
Shelter................. .2 .2 .1 .2 .2 .2 .2 2.0
Transportation services .0 .2 .4 .2 .0 .1 .0 2.1
Medical care services... .3 .3 .2 .5 .4 .4 .2 3.7

1 Not seasonally adjusted.


Taken from here.

www.bls.gov...

But yeah it's kind of like how they figure unemployment.



posted on Mar, 1 2012 @ 03:41 PM
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reply to post by LittleBlackEagle
 


I'm not entirely sure our legislators understand the situation we are actually in. Considering all the resources they waste on manufactured issues. If they really understood I would hope they would at least try to fix it rather than argue about birth control or whatever the hot button item is this week.



posted on Mar, 1 2012 @ 03:44 PM
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Originally posted by diddlydo
reply to post by LittleBlackEagle
 


I'm not entirely sure our legislators understand the situation we are actually in. Considering all the resources they waste on manufactured issues. If they really understood I would hope they would at least try to fix it rather than argue about birth control or whatever the hot button item is this week.


Scarier still is I think they do understand it and have no idea how to fix it or worse, are doing it for some sinister reason.



posted on Mar, 1 2012 @ 03:46 PM
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reply to post by LittleBlackEagle
 


CPI is one of the fakest numbers thrown out there by the Feds. Even worse than the GDP, because the CPI has absolutely no basis in fact. Simply a made up number. Like unemployment.


Consider that 70% of our budget is used to buy our housing/rent .. food .. energy/utilities/gas ..

None of that is even considered in CPI. TV's, refrigerators, cars .. those are covered. Not the crap we actually spend all our money on.

So this begs the question: Does a 3% increase in the cost of a TV effect us more than a 3% increase in the cost of food?


I see inflation as being a serious problem this year and next .. perhaps as bad as 2008 when we were seeing soaring gas prices and food costs around the World explode.



posted on Mar, 1 2012 @ 03:49 PM
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reply to post by Rockpuck
 


I couldn't agree more and with the printing presses running at full tilt, I don't see this year ending well. 8% seems more in tune with reality to me.



posted on Mar, 1 2012 @ 03:56 PM
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Originally posted by LittleBlackEagle

Originally posted by diddlydo
I don't care to guess where the next year is taking us, but if gas prices do hit $5-6/gal any economic recovery that we were looking at will probably be erased. Inflation has already way outpaced wages, and people are already struggling to feed their families we cannot afford to take many more hits.



i'm with you on that. Just seems a crazy mess compared to what our legislators are feeding us. It seems to me they should be preparing us all for the inevitable instead of lying to us with a smile. So many families are not prepared for the economic woes coming our way and if they had more warning perhaps they could put a little something aside or learn some basic survival skills.


Food and fuel prices are not considered part of the over all inflationary construct. Part is because they have the greatest likelihood of volatility. Hell regardless of "how good the crop was" most tractors and farm vehicles run on diesel. (Consider converting, farmers out there to multi-fuel use, like propane, etc. Save some money, need less valium...)

But spending money for two things we can't do without and who cares if its volatile or not, be honest and include it in the inflationary index. One may need to have a more adaptive real world method (read not the economist's land-of-the unreal people) of determining actual and effective price's, but thats not hard to do given 24/7 news and the ability to use an appropriate "curve" to even out the day to day ups and downs.

Given how a price of those critical commodities can change in one day, say if we have a major war, or a thousand other excuses, ah I mean causes, a "factoring cushion" may prevent inflation watchers and the commodities and stock markets from getting collective whiplash. The greatest danger to the markets is not actually good or bad news in itself. It's uncertainty.

But to ignore these ares in looking at the real cost of inflation is just plain dumb. And if ignored can breed more uncertainty. Very bad for all. The reason is people KNOW this is not factored in. Thats a "crash or crunch" begging to happen were its not at all rational. Who said markets were rational, much more emotion then logic any day of the week. Uncertainty makes people act in their hunker down or panic mode. Talk about a bad hair day...



posted on Mar, 1 2012 @ 04:00 PM
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reply to post by LittleBlackEagle
 


Interesting article and I am glad someone is finally removing things like houses and appliances, not only because they are one time purchases, but also because their is another side to the value of those products that people often over look and that is the quality of materials and construction.

In other words, one reason the true state of inflation is hard to measure is because products over time have been made with cheaper and cheaper materials.

A few years ago I worked as an electricians assistant and most of the new houses we worked on were made with cheap white pine framing, cheap materials throughout and even the brick facings on the house were not full brick but quarter brick and yet these were not cheap houses and were on par with most of the new construction going on. Even one of the electricians on our crew who had been doing electrical work since the sixties, was saying that he wouldn't be surprised if the houses only lasted about ten years before they begin to pop at the seams.

Another, example is appliances, my grandmother had a washing machine, that she bought when she first got married in her thirties and it didn't have to be replaced until she was in her seventies. The gears and mechanisms inside all steel. New washing machines may last you fifteen twenty years before they break down and have to be replaced mainly because they are filled with garbage plastic parts and I know many will argue the plastic makes it cheaper on energy consumption; fair enough, it also makes it cheaper to produce.

And, I apologize for being round about, but those two examples illustrate a point that one of the reasons inflation hasn't looked as bad as it really is, is because companies have been steadily making products with cheaper and cheaper materials, in an effort to not look like they are raising prices on their consumers. In other words if the companies actually started making things out of real steel and the way they were going back to the fifties the prices of those houses, appliances and cars would probably be through the roof. Just another hidden side of inflation that the statisticians never seem to consider.
edit on 1-3-2012 by prisoneronashipoffools because: typos

edit on 1-3-2012 by prisoneronashipoffools because: typo



posted on Mar, 1 2012 @ 04:25 PM
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reply to post by arbiture
 


I think this is definitely in line with some of the real changes that need to be made with our Govt. They need to start giving us the real numbers and not the BS numbers. How can we ever go about climbing out of thid hole when our own elected officials pad the numbers?



posted on Mar, 1 2012 @ 04:30 PM
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That's yet another side to the tale isn't it. I was just thinking the other day that although some prices seem to be only rising slowly, what you are getting is shrinking a lot. Take any burger from any fast food joint and see how they are shrinking. Automobiles, houses, appliances, seems to not matter what it is it's shrinking in volume and or quality and the prices are rising on top of that while wages and benefits are either standing still or going down.



What’s the “Real” Inflation Rate?


The Bureau of Labor Statistics publishes the Consumer Price Index, which is the standard for tracking inflation. The way the CPI is calculated was altered in the early 1980s and again in the 1990s. A facebook friend of mine sent me a link to an interesting inflation chart that publishes an alternative inflation number based on the formula used prior to the alterations. As you can see from this chart (click on the chart to see a larger version), those changes had the impact of making inflation appear much lower than it would have been had the changes not been made.

allfinancialmatters.com...





advisorperspectives.com...

Interesting graph to show the official trend since 1872
edit on 1-3-2012 by LittleBlackEagle because: (no reason given)

edit on 1-3-2012 by LittleBlackEagle because: (no reason given)



posted on Mar, 1 2012 @ 09:44 PM
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Originally posted by LittleBlackEagle
reply to post by arbiture
 


I think this is definitely in line with some of the real changes that need to be made with our Govt. They need to start giving us the real numbers and not the BS numbers. How can we ever go about climbing out of thid hole when our own elected officials pad the numbers?



Thanks for your reply. Until the issue is addressed by people who actually calculate such one needs to add the real inflation rate, that is fuel and food but also associated sectors that can be as important and be added to for example food prices. Shipping costs of food? When you get your vegetables from a farm 3,000 miles away adds $$ ? You betcha. Also certain chemicals applied to fields such as insecticides have or need to be processed with a petroleum base. As I stated, farmers have to pay for A LOT of fuel if they have a farm of an appreciable size, say over 1000 acres, about 580 or so hectares? The price of fuel affects everything from fertilizer to drugs to your electric bill. And a whole lot more.

One reason to eat organic despite the current higher price which for a lot of people they just can't afford, in particular with a large family or a seriously restricted budget where every penny counts. One of my current employees who was once on food stamps when she lived in another state, said something very interesting. I only hired her a few months ago and she told me she wanted to buy organic food for her kids, she would eat the cheaper stuff but she wanted her kids not to have the garbage so often in processed food and no pesticides, hormones, or non-organic fertilizer which boils down to manure and nitrogen. But was told organic food was not covered by food stamps (but they pay for candy?) I don't believe in the nanny state, far from it. Want to live on stuff that is not very good for you, its your funeral.

But hey, if food stamps would cover it, for the short term will cost more, but having it paid for by food stamps? Just the volume used will give a huge boost to organic growers, and that WILL without doubt almost at once bring the price down. Its got to be nation wide. and the person using same should make the decision themselves based on price knowing at first her/his "stamp money" wont go as far. I know this lady and no doubt others would not care.

Will it pay in reduced health costs over time? Heart attacks and strokes and likely cancer may be reduced if food stamps would pay FOR THE SAME FOODS if available and today most are, for non-hydrogenated foods, thats trans fats. That WILL kill you over time as your body absorbs it as if it was "normal" fats with Omega 3's and 6. What that gunk does to almost every organ in your body would give you nightmares. I've been in an autopsy and we can now estimate, though not definitively circumstantial evidence is over well-ming, to tell knowing what we see at cut up, sorry autopsy and what someone has eaten over time if it involves more or less trans fats. Really yucky.

By the way. Try to buy local produce, it should be labeled as to where, country AND state it comes from and read the labels VERY carefully. Don't just settle for "packaged in or distributed by" WHERE WAS THE FOOD GROWN? Why thats so important as the standards of many nations are, s**** at best, and poop is sometimes the least concern.

Though many nations that include Australia, New Zealand, the UK and Canada have verifiable and similar standards as the United States, and some, many actually grow human food I wouldn't feed a dog. Let alone pet food from China that killed thousands of cats in the US, many more elsewhere, by putting plastic into cat food to mimic protein. Hey I like dogs. I love cats. And if I DONT want arsenic or DDT or God knows what spread on food, any food.

And this is not anti-Mexican but trust me, standards? What standards. READ LABELS PLEASE! If enough people demand it, if people want to make money they will listen. Organic food and local grown helps all of us and I see in the not-to-distant future the logic of this from just an economic point of view as prices of fuels and everything associated, despite the occasional pause will only and inexorably escalate. This IS inevitable.

Strange as it may seem there is a lot associated with the cost of food and fuel that involves much more then "just" food and fuel. I am working on an algorithm that will take these factors into account so people can have a simple way to add these prices to the standard inflationary index. I will make this available to anyone free of charge. And ATS gets the first place I will publish it. Open source and anyone can for resarch, or any reason use this data free, and I encorage this. I will not publish the math that I use but its just taking known $$ and adding it up, anyone can on their own. Sources provided. Predictive methodology? Nope.
edit on 1/3/12 by arbiture because: what else, spelling farts (yo think it smells bad where you are? Try being a total (phonetic) idiot speller, dyslectic and typing as with speaking I also stutter. Violins please...



posted on Mar, 2 2012 @ 07:40 AM
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reply to post by arbiture
 


You bring up a good point and a very heated issue currently with Monsanto muscling their way into even organic farming via lobbying legislators. Seems to me it's the same old issue and I wouldn't put it past Monsanto and their kind, to lobby so food stamps cannot be used for organic food.

We all know what inflation is, every time we buy anything we need to get by day to day, but we can leave it up to our legislation to feed us complete useless padded data so we continue to smile and wave. It's not going to work much longer, things will get bad and people will be hurt, but I think in the end we will get to a better way of living.

Sounds good on the code, very nice of you to do that.



posted on Mar, 2 2012 @ 10:21 AM
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Originally posted by prisoneronashipoffools
... one reason the true state of inflation is hard to measure is because products over time have been made with cheaper and cheaper materials.

Agreed. I do a lot of buying out of my local Home Depot through my job and the stuff just keeps getting crappier and crappier.

ps
I recently went to get some oil for my car and was stunned to discover motor oil at over $4.00/qt, versus about $1.79/qt just last year.
edit on 2-3-2012 by starviego because: (no reason given)



posted on Mar, 2 2012 @ 12:26 PM
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Originally posted by starviego

Originally posted by prisoneronashipoffools
... one reason the true state of inflation is hard to measure is because products over time have been made with cheaper and cheaper materials.

Agreed. I do a lot of buying out of my local Home Depot through my job and the stuff just keeps getting crappier and crappier.

ps
I recently went to get some oil for my car and was stunned to discover motor oil at over $4.00/qt, versus about $1.79/qt just last year.
edit on 2-3-2012 by starviego because: (no reason given)


just remember unemployment is at a three year low of 8.5% and inflation is at 2.93%.


perhaps we can come up with an educated BS percentage meter. unemployment is probably more in line with 20-24% and inflation at 8%, looks like they just take the real numbers and use 33% of them for the BS numbers.



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