Feds claim 0% consumer inflation last month and the media runs with it.

MGLICKER

I suppose my grocer and barber were not polled.

Remarkable that we as a nation can print 85,000,000,000 fresh, crisp (well digitally crisp) Greenbacks a month, and magically they only find the markets that the government finds appropriate, primarily equities and housing. Everything else is unaffected, at least by their monthly reporting standards.

ricko

Trusting government statistics is like believing in fairies and the Easter Bunny...... all manipulated, all lack any foundation in reality. Cheers, RickO

cohodk

<< <i>I suppose my grocer and barber were not polled.

Remarkable that we as a nation can print 85,000,000,000 fresh, crisp (well digitally crisp) Greenbacks a month, and magically they only find the markets that the government finds appropriate, primarily equities and housing. Everything else is unaffected, at least by their monthly reporting standards. >>



I oftentimes find products at the grocery store priced the same as 5-10 years ago. My haircuts cost $10-15, sometimes less with a coupon. I paid that much 25 years ago.

MGLICKER

<< <i>

<< <i>I suppose my grocer and barber were not polled.

Remarkable that we as a nation can print 85,000,000,000 fresh, crisp (well digitally crisp) Greenbacks a month, and magically they only find the markets that the government finds appropriate, primarily equities and housing. Everything else is unaffected, at least by their monthly reporting standards. >>



I oftentimes find products at the grocery store priced the same as 5-10 years ago. My haircuts cost $10-15, sometimes less with a coupon. I paid that much 25 years ago. >>



I do as well, but clearly 1% CPI annually is not accurate.

derryb

must not include the cost of health insurance.

VanHalen

<< <i>Remarkable that we as a nation can print 85,000,000,000 fresh, crisp (well digitally crisp) Greenbacks a month, and magically they only find the markets that the government finds appropriate, primarily equities and housing. Everything else is unaffected, at least by their monthly reporting standards. >>



Yep, equities and housing surge 20% annually but consumer prices rise at 1%. Nothing to see here. Move along sheeple.

roadrunner

<< <i>must not include the cost of health insurance. >>



I'll say. After seeing my health insurance rise on average 8-14%/yr over the past 5 years it goes up 24% in January under Obamacare. I checked other competitive alternatives....and this plan is still the cheapest one in my state for no benefits other than a yearly physical and a $10K deductable! In 2015 it will almost certainly exceed the sum of my mortagage + RE taxes + home insurance. I'd estimate it's about 23% of my total annual living expenses. 5 years ago it was 10%. 5 years ago I never in my wildest dreams expected a catastrophic health care policy ($10K deductable with the only benefit being an annual physical) would be like taking out a new mortgage. My wife and I haven't seen a doctor for anything but a routine physical for the past 4-1/2 yrs. I haven't been sick a day in 5 years, no colds, no flu, no nothing. My health insurer must love me.

If one wants to live off cheap boxed/preserved foods like PB&J, white rice, white flour, Sunbeam bread, 1% milk, canned dark tuna fish, and fruit drinks by the gallon you can probably eat pretty cheaply. Even the $1 value menu at McD's is pretty cheap. If I had to I could eat 3 "meals" a day at McD's for under $2 each....bringing my own milk or using water. As it is though, I try to eat a whole foods, non-processed, high fiber/veggie-fruit laden diet figuring living longer is a higher goal than feasting at McD's. I shop pretty cheaply as it is but still find my meals average about $3-4 each with a $5 bump for non-farm raised Salmon days. If you want healthy "real" foods they have not been getting cheaper over the past few years....neither have supplements, vitamins, etc....unless you buy the junk in the large supermarkets that are all synthetic with no proven value. The CPI assumes you will buy the cheapest junk with the least amount of nutritional value....after all, it is the cheapest way to eat. Fresh veggies and fruits cost a lot....especially if organic. Quinoa, brown rice, beans, flax, sweet potatoes, etc. replaces a lot of the chicken and beef I used to eat.

The $10-$15 haircut remaining a staple is probably due to numerous barber shops closing over the past past decade. No doubt a very competitive business. It's price will probably always stay low since most anyone can learn to do this at home just as well. This is not a good tracker of price "inflation." My wife can do my hair better than those shops and the price is impossible to beat. Fwiw I learned over the years to cut my own hair and in 30 min can do a pretty decent job. That was after my local establishment went to $20 + tip. I haven't yet found a quality barber in my area for $10-$15. But I'd happily pay $50 for a haircut (2X increase) if my health insurance premiums or food budgets were cut in half.

mariner67

<< <i>must not include the cost of health insurance. >>



Or college tuition costs!

MGLICKER

In the 1960's a man with 12 years of education could support a family of four. Now he and his wife each need 16 years of education to support the same family. Of course we had black and white TV's and no cable then, but the food tasted better and the music was superb.

roadrunner

1% milk will probably stay cheap a long time due to govt subsidies. But if you want a healthier alternative that doesn't lead to internal inflammation then almond or soy milks are other choices. And those have not been getting cheaper over the past few years. If you want an overly processed GMO soy milk laden with sugar then you can find one at Stop&Shop for $1.80-$3/half gallon. If you want a non-GMO product w/o sugar then it's in the $3.50-$5.50 range for half gallon. Not cheap. Probably simpler and cheaper just to have tap water on your cereal to lower your cost of living. Numerous visits to multiple health food stores in my area over the past few years shows nothing getting cheaper. Not a single product. And I'd say 80% or more products are higher in price. But you can visit the inner aisles at Walmart, BJ's, Costco, and Stop and Shop and find cheap alternatives....though they won't be what I'd call food. That's not to say there aren't some healthy choices at those places....just not so many. I do like the BJ's organic 16 oz spring greens mix for $4.99. It's the cheapest organic salad mix I can find - a good start to 5 or 6 huge salads. 3-pound bags of almonds, walnuts, and frozen blueberries are also pretty decent deals there. I've seen those nuts go from $9/bag to $12-13 today over the past couple of years. But for a store of that size there ought to be a lot more healthy choices.

Of course, all the above pales to the biggest ticket items already mentioned of health care, tuition/room and board, rents/equivalent rents, taxes, standard professional services (lawyers, accountants, electricians, plumbers, arborists, roofers, mechanics, etc.)....none of which have exactly gotten cheaper from my perspective. When I first started visiting my current auto mechanic in the 1990's his posted labor fees were around $35-$45/hr. Last time I was in there I think it was $85 or $90/hr. Auto repair parts have probably doubled and tripled in that same time frame as well....even if new cars themselves haven't seen those price increases. But I can still revel in the "forever constant" $1.00 regular McD's hamburgers and now the two Whopppers for $5.00 when they are on sale. No inflation here....No food either.

roadrunner

<< <i>In the 1960's a man with 12 years of education could support a family of four. Now he and his wife each need 16 years of education to support the same family. Of course we had black and white TV's and no cable then, but the food tasted better and the music was superb. >>



Basically needed to handle the ever increasing amount of regulations, services, fees, and taxes collected by our local, state, and federal govts. The more they meddle, the more things cost. It's not rocket science. You can't transfer wealth from the middle and lower classes to the upper class without all the "necessary" regulations. And you have to keep J6P in the dark on all this by having a CPI that is resistant to change and a falling dollar measured against a basket of other depreciating currencies. The govt continues to try and meddle into the health food, supplements, and vitamin marks by constantly creating new bills to require stiff regulations...similar to pharmaceuticals. So far they've been mostly unsuccessful. Eventually though, they will own it. And at that time I'll be gorging on Whoppers, PB&J sandwiches, Krispy Kremes, and 64 oz Big Gulps like everyone else.

derryb

Washington gridlock risks $7 milk

MGLICKER

<< <i>Washington gridlock risks $7 milk >>



I wish. Subsidizing milk always had a queasy Soviet feel to it.

roadrunner

<< <i>Washington gridlock risks $7 milk >>



The federal govt won't risk this as the 47%ers that do not pay federal taxes would be largely affected.....and so would their votes next time around. Getting the people off dairy milk and milk products would actually be a
very positive thing for people's overall physical health. Just don't tell that to the Dairy Farmers Association. Got Milk?


The 0% CPI this month is a +0.1% gain over last month. Core CPI is up +.2%.

The govt and media often harp on the "core CPI" whenever it is lower than the overall CPI. When the tables are switched....they focus on the overall CPI.
Still, not large enough changes to get excited about. I paid $3 for my haircuts 25 years ago. But, I also wasn't looking for that GQ look either.

MGLICKER

<< <i>Still, not large enough changes to get excited about. >>



Disagree, I believe the real annual rate is closer to 6%. Bernanke has increased the money supply by a factor of 4 since 2008.

MGLICKER

First date cost me less than $7 in 1972. Doubled and went bowling at what is now the very large pawn shop on Hardcore Pawn. Afterwards we went to the Red Devil for a light dinner. Good thing it was light because my wallet was near E.

Today you need to visit the pawn shop before going on a date.

derryb

The widening gap since 1980 is a result of a continuous fiddling with the forumula. (Liars figure and figures lie.)

golden

<< <i>In the 1960's a man with 12 years of education could support a family of four. Now he and his wife each need 16 years of education to support the same family. Of course we had black and white TV's and no cable then, but the food tasted better and the music was superb. >>

Barndog

renman95

I know how to cut my "food" bill by 14.3% per week and still eat same whole foods.

Not sure if I can convince my family to fast once per week though.

derryb

Breaking Down the Consumer Price Index

TwoSides2aCoin

<< <i>First date cost me less than $7 in 1972. Doubled and went bowling at what is now the very large pawn shop on Hardcore Pawn. Afterwards we went to the Red Devil for a light dinner. Good thing it was light because my wallet was near E.

Today you need to visit the pawn shop before going on a date. >>



In 1972 dates were cheap. In 2013, they're easy.
Did you miss the memo ?

roadrunner

<< <i>The widening gap since 1980 is a result of a continuous fiddling with the forumula. (Liars figure and figures lie.)

>>




This guy feels the CPI is well designed and that Shadow Stats is mathematically flawed.

An interesting alternative point of view with some worthy points. I don't agree with the author that CPI is a cost of living index...because the basket of goods is constantly changing in qty, quality, and variety. What it is the price of a constantly changing basket of goods and services. That's not much different than trying to find out the purchasing power of the dollar when its basis is against a half dozen other depreciating currencies. Substitution effects (ie hamburg for steak....then dog food for hamburg) work to lower the standard of living. I've found myself doing this all the time (ie substituting cheaper for pricier)...and it has never resulted in a higher quality of life or a lower cost of living.....rather just the opposite. Same could be said for the new high deductible health insurance policies. I don't see my doctor for anything anymore except a physical... unless I was on my death bed. That's a "drop" in the cost of living as there are no more doctor bills (just huge monthly premiums to the health insurer....lol).

derryb

The inflation/deflation argument is best solved by measuring what is left in the consumer's pocket after he has paid for his necessities. Assuming he had the same income, is there more or less left in his pocket compared to the previous month? I don't see many moving up the wealth ladder, do you? Increasing numbers of entitlement recipients say otherwise.

derryb

The Deflation Menace

"I would argue that those who lived through the Great Depression were grateful that they were able to buy more with what little money they had. Imagine how much worse it would have been if they had to contend with rising consumer prices as well. It may surprise many Nobel Prize-winning economists, but discounts often motivate consumers to buy -- try the experiment yourself the next time you walk past the sale rack."

"The truth is the media is merely helping the government to spread propaganda. It is highly indebted governments that need inflation, not consumers. But before government can lead a self-serving crusade to create inflation, they must first convince the public that higher prices is a goal worth pursuing.

LowBudget

don't know about other states but NYC has proved to be more expensive than ever. Not even counting the cost of gas and tolls

renman95

<< <i>The Deflation Menace

"I would argue that those who lived through the Great Depression were grateful that they were able to buy more with what little money they had. Imagine how much worse it would have been if they had to contend with rising consumer prices as well. It may surprise many Nobel Prize-winning economists, but discounts often motivate consumers to buy -- try the experiment yourself the next time you walk past the sale rack."

"The truth is the media is merely helping the government to spread propaganda. It is highly indebted governments that need inflation, not consumers. But before government can lead a self-serving crusade to create inflation, they must first convince the public that higher prices is a goal worth pursuing. >>






">

secondrepublic

Just returned from the Post Office (yes, there's one open on Sunday around here). A 3 oz. first class small parcel which last week cost $2.07 to mail, today cost $2.32. That's a 12% increase. Similar percentage increase on a slightly larger size package that I ship frequently.

A certain box of cereal that my wife likes to eat, and which always used to cost $3.14, is now always $3.49 at the same store. Similar percentage increase.

DoubleEagle59

<< <i>

<< <i>I suppose my grocer and barber were not polled.

Remarkable that we as a nation can print 85,000,000,000 fresh, crisp (well digitally crisp) Greenbacks a month, and magically they only find the markets that the government finds appropriate, primarily equities and housing. Everything else is unaffected, at least by their monthly reporting standards. >>



I oftentimes find products at the grocery store priced the same as 5-10 years ago. My haircuts cost $10-15, sometimes less with a coupon. I paid that much 25 years ago. >>



I believe you.

But in the years when there was truly zero inflation, I could probably have found many examples of price increases.

Baley

There are countless reasons for price change "examples" in both directions, higher and lower prices, that have absolutely nothing to do with general monetary inflation.

Using handpicked anecdotal "examples" to try to extrapolate to a macro- phenomenon such as general monetary inflation is not logically sound reasoning, imo.

People who truly understand the government numbers, and the methodology used to derive them, believe the numbers, and take them at face value for what they are.

Some folks use the government numbers, against their own examples, and try to spin a conspiracy theory; some of these folks will then go on to try to sell you some PMs

MGLICKER

Baley, are you a fan of the Chained CPI, which is another attempt to deceive American citizens with false inflation numbers.

Text

In essence it claims that once you are priced out of steaks, the price no longer matters.

When you are priced out of hamburger, the price no longer matters.

Though you eventually can only afford Ramen Noodles, the effect of food inflation has been negligible under this "let them eat cake" nonsense.

As long as prime rib is served on AF1 though, all is well.

roadrunner

<< <i> People who truly understand the government numbers, and the methodology used to derive them, believe the numbers, and take them at face value for what they are..... >>



Such people are more often called economists or politicians who derive a living off those govt numbers. You and I don't make a living off those published numbers. Most others are smart enough to know the difference just by their "seat of the pants feel." And that kick in the butt is coming from those same politicians. There are exceptions though such as economist and mathematician John Williams who created the shadowstats charts shown by derryb above. The guy has advanced degrees in enough subjects to fully understand what the govt methodologies are. The fact that big corporations use his stats indicates there are others who "understand" the govt numbers in a much different way than most.

The real question to ask is why should the methodologies used by the BLS to measure price inflation have changed so much from 1980 to today? Is price inflation so much different today that it took new models and formulas to compute it? What was wrong with how it was measured in 1980? Has statistics, mathematics, and economics changed so much in 30 years? Why bother creating substitution effects, hedonics, and other quality factors? How much money did the BLS spend on a 15 page report defining the quality factors coming from modern electric dryers? Was my life improved so much with the additional automatic functions? For the record, we still use a Maytag top loader washer that we got used out of my brother's rental until in 1995. The Kitchen Aid dryer we use is a simple-minded machine we bought new in 1992. Not sure what improvements in life I'm missing but the BLS sure seems there are plenty of them....enough to lower the "effective/adjusted" price of these machines considerably due to quality effects.

jmski52

Why do postal rates keep going up?

derryb

<< <i>Some folks use the government numbers, against their own examples, and try to spin a conspiracy theory; some of these folks will then go on to try to sell you some PMs >>


Higher taxes and higher prices have nothing to do with a conspiracy. They are the direct result of a failing economy engineered by bankers and reckless government spending that ends up back in the pockets of those doing the spending. The fact that I sell collector gold, continue to stack bullion with the profits and recommend that others stack bullion is completely motivated by these realities.

jmski52

The price of propane has doubled in a few short days.

Baley

<< <i>The price of propane has doubled in a few short days. >>



Seasonal swings caused by supply/demand are not inflation/deflation.

What will the price of propane tend to do in July? What do you suppose might tend to happen to the price of dry ice in July, versus the market for dry ice now?

MGLICKER

Maybe Baley is right!

The local Sunday paper that was $1.00 seven years ago, cost me nothing today because I refused to shell out $2.16 for the fat stack of muffin coupons and left wing propaganda.

roadrunner

<< <i>Maybe Baley is right!

The local Sunday paper that was $1.00 seven years ago, cost me nothing today because I refused to shell out $2.16 for the fat stack of muffin coupons and left wing propaganda. >>



An excellent example of a consumer exercising their substitution effects. In this case you substituted the "free internet" and TV news for the Sunday paper. That's a $2.16 to $0 exchange that will push the CPI down.
Well done comrade Glicker in doing your part to WIN (whip inflation now).

MGLICKER

<< <i>

<< <i>Maybe Baley is right!

The local Sunday paper that was $1.00 seven years ago, cost me nothing today because I refused to shell out $2.16 for the fat stack of muffin coupons and left wing propaganda. >>



An excellent example of a consumer exercising their substitution effects. In this case you substituted the "free internet" and TV news for the Sunday paper. That's a $2.16 to $0 exchange that will push the CPI down.
Well done comrade Glicker in doing your part to WIN (whip inflation now). >>



Ahhhh ah yes. Yes indeed.

And as the cost of my internet connection continues to decline, it is all nearly free.

jmski52

Baley, ignore it if you think it's nothing -

My propane cost per gallon:

2012 Contract: $1.69/gal.

2-19-13 spot purchase: $1.59/gal.

4-4-13 spot purchase: $1.69/gal.

8/26/13 spot purchase: $1.69/gal

12/9/13 spot purchase: $ 1.95/gal.

1-23-14: Spot Propane, Conway, KS hub price reaches almost $5/gal.

roadrunner

Nat gas got decimated from over $10 down to $2 over 4 years. That was the good part. But the bad part is that you're going to be paying higher and higher nat gas/propane prices for some time to come as prices
revert back towards the mean. Maybe when the big banks get out of the trading commodities business we might not see these massive arbitrage swings where they routinely score big profits.

5 year chart

secondrepublic

<< <i>Why do postal rates keep going up? >>



In 1885, the price of a first-class stamp was 2 cents. 43 years later, in 1928, the price of a first class stamp was.... drumroll please.... 2 cents.

Today it's 49 cents. A mere increase of 2,450%. Link to data.

I suppose the BLS will tell us that the price hasn't really increased, but rather that we're getting more smiles and better service from the Post Office, so it's actually an improved product.

If postage goes up at the same rate over the next 86 years, by the end of that time it'll cost over $12 to mail a first class stamp. Isn't that inflation? Same product, way increased price, incredibly shrinking value of the dollar. Same thing that used to cost 2 cents will then cost $12.

Baley

if you think about it, for someone to hand deliver an envelope to any address you say, in a couple of days, for half a buck is remarkable.

I'd charge you at least 1000 times as much to do the same job.

jmski52

Nice sidestep, Baley. The point was about the inflation that you deny is happening.

I'd charge you at least 1000 times as much to do the same job.

It's a good thing you aren't the Postmaster General the Budget Director. It's bad enough already.

Baley

Not denying inflation, the postage stamp is actually an excellent example, as it only goes up over time, never down.

let's keep an eye on propane though, and see if it doesn't come on back down in price this summer. I buy it in the bbq sized bottles maybe twice a year.

secondrepublic

<< <i>if you think about it, for someone to hand deliver an envelope to any address you say, in a couple of days, for half a buck is remarkable.

I'd charge you at least 1000 times as much to do the same job. >>



The pharoahs of ancient Egypt would probably give you a ton of gold and jewels in exchange for a working air-conditioner. Doesn't mean we should pay that much.

MGLICKER

<< <i>Not denying inflation, the postage stamp is actually an excellent example, as it only goes up over time, never down.

let's keep an eye on propane though, and see if it doesn't come on back down in price this summer. I buy it in the bbq sized bottles maybe twice a year. >>



The contract backwardation is in your favor.

derryb

A proven method of determining actual inflation vs. reported inflation:

Baley

alright, let's try another tack.

Granted, there is inflation, a lot of it, way more than the government is reporting.

Aaaaand, sooooo...?

MGLICKER

<< <i>alright, let's try another tack.

Granted, there is inflation, a lot of it, way more than the government is reporting.

Aaaaand, sooooo...? >>



For one, SSI recipients are getting less of an annual increase then they are "entitled" to. I think reigning in entitlements is a good thing, but be straightforward about it, not Obamaesque.

Baley

Sorry, can't help ya there, as I have no control over any of that. But I'm convinced! I'd like to DO something about this issue... suggestions? Something I can actually DO about it.

I am totally convinced by this thread that inflation is out of control high and prices are spiraling upward.. what's my move? Should I "be outraged"? I am! I am very outraged! great! now what?