Bread is still cheap

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Core CPI does not include food or energy to be more specific which is used as a barometer of inflation since food and energy are deemed too volatile. CPI measures the prices of a basket of goods that inflation may have an effect on not actual inflation itself. The basket of goods that CPI uses to measure prices are determined from surveys provided with the census every 10 years.

Just in general, do you find government statistics to be accurate? Such as the BLS unemployment numbers? Or estimates that the CBO comes up with?

And? Headline CPI does include both of these, and every measure of CPI used to inform major government policy decisions includes food and energy costs.


Well, duh. There is no direct way to measure inflation as a metric of purchasing power. I fail to see why you think this is a problem.


Yes. BLS publishes several different metrics of unemployment; it is hardly their fault if media reports are insufficiently critical in understanding the differences between them. And I don't see anyone else compiling a more accurate and systematic tally of employment. CBO is in the unfortunate position of trying to make long-term projections without having foreknowledge into what new policies will be proposed and implemented in the intervening time; they are as accurate as is reasonably possible given the information available.

Yes, the CPI isn't the unachievable "ideal cost of living index". The problem with bashing the CPI, which I'm relatively sure isn't the only cost of living index the gov't uses (I think the Feds use a chain-weighted index) is that it tends to overstate rather than understate inflation.The CPI tends to overstate inflation or real increases to the cost of living because it underestimates substitution effects.

This is the opposite of what people who distrust the CPI because it supposedly underestimates inflation need for their case to hold water.

The monetary base has like tripled over the last few years, most of that money hasn't hit the economy but it's out there. Wages certainly aren't increasing.

I expect high price inflation in the future. The monetary base has expanded by [url=http://research.stlouisfed.org/fred2/graph/?s[1][id]=BASE]212% since 2008 (link).[/url] But most of that is in [url=http://research.stlouisfed.org/fred2/graph/?s[1][id]=EXCRESNS]excess reserves (link)[/url] right now.

The question is when this money going to get loaned out?

When that happens, you'll be seeing higher price inflation.

I wrote more about all that here (link).

Imaginflation indeed

I'm sure when the sh** hits the fan, the Fed will just press a magic button that make everything go away.

£1.40 a loaf?!

Oh, DO bugger off.