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What Inflation? Here Are The Various Components Of The CPI Basket
Earlier today we pointed out a curious divergence: while owner equivalent rent, the measurement of imputed costs of renting, has risen to the highest since the Lehman failure, total non-shelter core CPI continues to decline. What is notable is that OER amounts to 23.9% of the CPI basket - as such it is the single largest determinant of inflation as measured by the BLS. And yet everything else, hedonically adjusted of course, keeps falling. By how much? And do you agree with the BLS' estimates of inflation? To answer these not so important questions, here is the full CPI basket, broken down by weighings, and by annual change.
At first blush, a lot of the "inflationary" assumptions shown below make little if any sense, but then again who are we to argue with the Arima-X-1 seasonal adjustment juggernaut of a few good Econ PhDs.
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pure BS! inflation well over 3%..for while now...and that's not factoring ponzi rigged equities which are more than double their fundamentals...
BLS = Bullshit & Laughable Satire
I stopped paying rent when I moved into maw-maw's basement
that kind of hedonic adjustment proves that deflation is in full swing
Inflation doesn't count;... if you don't count inflation...
Lasagna up 20%, I am pissed.
Check out John Williams Shadowstats to find out . . .
The Real Lies behind the CPI
Total Bullshit fed to us daily.
I call bullshit...
Education up 1.5%
What fucking world do these asshats live in?
I saw that too. It's lumped with "communication" and hedonically adjusted. In short, magic.
When the number gets too big, they change the equation. Pure lies, but what do you expect?
Bullcrap just got a lot more aboundant and much cheaper. It drags the average price of food way down. Eat less steak and eat more bullshit. Then you will see the wrath of deflation.
Future Bananamerican..."Honey, today, I manage to purchase 2 kilos of gmo tomatoes at Traitor Joes for 575 dollarz"
<delete dupe>
looks to me a basket case of realINdex...
Has anyone figured out why oil went to $150 in 2008? The entire world economy was 6 months into the worst recession since the Great Depression, inventories were increasing and yet oil shot to the moon for no apparent reason. It certainly couldn't have been inflationary forces or money printing that shot it to $150. After trillions in new money supply, it's just now crossing $100. What was the story with oil in 2008?
Was it really the guys at GSCI?
Of all the conspiracy theories, the oil "super spike" of 2008 is - BY FAR - the most suspicious to me. And what's even more suspicious is that no one talks about it or seems to care. I mean, c'mon (!!!).. oil suddenly untethered itself from ALL FUNDAMENTALS and shot to the moon, which, in turn, tilted the entire world into a massive economic collapse.... and no one is talking about it??
*LOL*
One of the best associations I've seen postulated has to do with Saudi Arabia and the gold for oil trade. As the gold supply has tightened, it has become more difficult to keep the flow of gold for oil to Saudi Arabia going. They will not accept potentially worthless fiat for their oil. If they cannot get paid in gold, the price in dollars will skyrocket. Perhaps the spike to $150 had everything to do with dwindling gold supplies and little or nothing to do with oil supplies. Check out http://www.FOFOA.BLOGSPOT.COM. The latest post is lengthy but touches on this association.
To be honest, that's one of the dumbest explanations for the 2008 "super spike" I've ever read.
Seriously.
Admittedly, my explanation was brief. Understanding the context of freegold requires a commitment to reading the thoughts of Another. If, as your post suggests, you are truly curious about the dollar price of oil and the factors affecting it the brilliant research and logic of fofoa may eventually help you to understand. Those familiar with FOFOA and the freegold blog will attest to the value of learning the history of gold and the dollar's reserve status.
You simply ask too much. The information from FOFOA takes a bit of time, and, as you say, looking back to the work of Another, to fully comprehend. It's not blather offered on a silver platter of sound-bites and simple graphs on CNN. This makes any regular guy off the street (I ain't naming any names here) oblivious to complex truths. Wouldn't it be nice if the world ran on simple one-on-one cause and effect? Since it's not, the typical person will look to the simplest of explanations and then go rest all comfy and relax on the sofa, fire up the tube, and rip open a bag o' chips. Don't ask so much of simple souls.
then allow me to attempt to summarise:
FOFOA claims that the oligarchy - both old european (Rothchild types) and the new oil barons of Saudi Arabia know the true value of gold to be perhaps 20x the comex price. They dont want to spoil the fiat party until necessary, so they tolerate this divergence in value for now
Because of this, the saudi's have been accepting gold for oil at a much greater equivalent value than the comex price. The blog puts their position like so -Arabia says, "I will sell oil for $10US a barrel or in gold valued at $10,000"
now, when a crisis like 2008 happens and everyone clings onto their gold in self preservation mode, it pisses off the Saudis. They dont want to trade their consumable wealth - oil - for other transitory and ephermeral sources of wealth like $US toilet paper - they want to be paid in a medium that will maintain its wealth as a legacy for generations to come. So when the US/West stops handing over gold for oil, the Saudi's jack up the price of oil to compensate themselves for not receiving the shiny yellow stuff.
its not only germany that received scrap metal gold - anecdotes from dubai also say the gold they are getting from the US is old coins and collectables from the back of the vaults that they have to smelt back into bars.
This sounds like another similar theory posutlated by Eric Janszen at itulip.com. He has a theory called GAGFO, which is an acronym for good as gold for oil. When the U.S. is doing well economically, countries are willing to hold $$$ as foreign reserves in general to be able to purchase oil on the open market. When the U.S. is in economic or political turmoil central banks move their allocation to less dollars and more gold. This explains CB's being net buyers of gold since the financial crisis of 08. Lack of confidence in the usd. Janszen attributes the decline in gold to the u.s. importing less oil since the fracking boom, and closing the budget deficit since 08. However he views both to these as short term trends and gold prices will continue their upward trend in a few more years.
I would be curious where is a good place to find out about FOFOA
* copied from www.silverdoctors.com deepcaster story.
Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)
Annual U.S. Consumer Price Inflation reported February 20, 2014
1.5% / 9.17%
U.S. Unemployment reported February 7, 2014
6.6% / 23.2%
U.S. GDP Annual Growth/Decline reported January 30, 2013
2.74% / -1.40%
U.S. M3 reported February 15, 2014 (Month of January, Y.O.Y.)
No Official Report / 3.07% (i.e., total M3 Now at $15.544 Trillion!)
“Only new-home sales data showed positive monthly results. Yet, with that series at 65% below its pre-recession highs, and with headline monthly and annual gains well shy of approaching statistical significance.”
“Durable Goods Orders in Downturn,” Commentary Number 603
www.shadowstats.com, John Williams, 02/27/2014
Note 2: We encourage those who doubt the scope and Power of Overt and Covert Interventions by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to read Deepcaster‘s December, 2009, Special Alert containing a summary overview of Intervention entitled, “Forecasts and December, 2009 Special Alert: Profiting From The Cartel‘s Dark Interventions – III,” and Deepcaster’s July, 2010 Letter entitled, “Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds,” in the ‘Alerts Cache’ and ‘Latest Letter’ Cache at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org, including testimony before the CFTC, for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster‘s profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these “Interventionals.” Attention to The Interventionals facilitated Deepcaster‘s recommending five short positions prior to the Fall, 2008 Market Crash all of which were subsequently liquidated profitably.
Yep. Cattle at highest prices ever. WTI crude $105. NAR reports 9.9% increase in housing prices (YOY) for December 2013. Gummint BS - through the roof!
Of course BLS inflation figures are bullshit. BLS disguises inflation with "hedonic" adjustments, which represent "quality improvements."
Toilet paper is probably a good example. Back in the late 90s/early 2000s, you used to get 280 sheets of 2 ply paper per roll, and a store brand roll cost about 25 cents.
Now you get a "double" roll that has only 240 sheets of double ply paper puffed up with air and it costs about a dollar.
Even though the true rate of toilet paper inflation is over 500% (13 sheets for a penny then vs 2.5 sheets for a penny today), the BLS will hedonically adjust that down to perhaps only 50% because it considers the "puffed up" paper a "quality improvement."
Here's your assignment for tomorrow morning:
Try to wipe your ass with a quality improvement!
Nice
2-ply nice. Well put.
Scott 1000 sheets per roll.
minor corrections, using your numbers: price has gone up by a factor of 4.67 (1/0.25 * 28/24) which is 367% inflation. (A doubling of the price level is 100% inflation).
Charmin screwed with the width of a roll late last year, going from 4.27 inches wide down to 3.92 inches wide. As it became difficult to find any remaining 4.27 inch Charmin I started checking out older non-chain grocery stores -- the kind you never buy toilet paper at -- where I found... a bunch of 4.5 inch wide rolls! This shrinking game has been played a long time...
What?? You dudes can still afford tape measures and scales??? Reeducation camps for you, suckas.
Forward!!!!!!
What BS; only 10% weighting on food, where the feck is energy. The bastards can't keep lying forever.
Hedonics...bitchez!!
Wait, WAIT.....this just in...
AS folks work longer hours for less pay, they will have less time to buy anything so the rate of inflation will naturally go down!
On a long enough time frame, inflation will go to ZERO!
Lots of multifamily construction going on in Florida in the last few years. Suspect that will keep a lid on rents. Lot of those properties picked up on the cheap in the recession.
There should be a narrow column added for our pet expenses. The cost of owning a good hound has not gotten any cheaper the last few years. DayHoundcare & Kenneling prices are through the roof. It is getting increasingly difficult to get your hound enrolled in the best kennels.
GOLD. What about that highly inflated "gold bubble"? I have to have buy that monthly you know...
Just throw in gas at $3.70 a gallon and see where that gets ya.
What? Nah. It's still just 2 thin silver dimes.
http://www.coininfo.com/calculators/
the fresh bread at kroger went up 30% that's a lot of dough!
Yeah, but they sliced the loaf into 40% more pieces, so it's actually a 10% decrease in price. See how that works?
Next up: pizza.
I guess the BLS got an exemption from Obamacare.
Or no one has actually bought any yet
From my last trip to Trader Joe's to the most recent, the bread that I have bought for years (organic soy crunch) has gone from $2.99 to $3.29. A ten percent increase. I remember clearly when it was $1.79.
Fuck you, Bernanke. If an upper-middle-class American notices, I can only imagine how the poor in the third world whom you are starving, feel about it.
Well, the Fed no doubt likes little wars, like in the Ukraine. Drives down the U.S. stock market (which the Fed presently sees as a bit high), without the Fed being blamed. Drives down the 10 year Treasury rate; win-win U.S. housing, the Fed's favorite. Disgusting.
The lowly banana at Sam's has gone from 99c for 5 lbs to $1.49 for 5 lbs.
I'll leave you to do the math.
Again I say...FUCK whatever the government states.
A pack of shit sucking liars..........
Wait until the goverment discovers section 8's are being priced out. Next, socialistic rent controls.
The game goes on until people have no place to live or eat.
Anybody else think of section eight in military terms?
Well, like everything else...
The inflation numbers for the top 20% economy is entirely different for the losers at the bottom (but, nobody cares about them anyway).
I recently switched to lawn mower, wayyyy cheaper than great clips
The argument for global deflation is a strong one. While local prices in some areas may be rising, it is arguable that CPI, PPI, housing and other indicators reflect short term movements, i.e. bear market rallies, in an otherwise collapsing economic environment. Today's market collapse could be just the beginning of a long term deflationary decline brought on by the popping of a bubble decades in the making.
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
Fonestar is confused about housing being > 40%. Fonestar has free basement and free wifi
please don't feed the troll
I'm not sure why the communication/education portion is under 2%, my internet connection (with AT&T providing speeds much like a dial up) has tripled in the last 7 years, they raise the price every quarter.
it took almost a full minute to post that comment, the hedge is just hanging up bigtime!!! >:-[
Transportation way down??? Manipulation all over it.
Comparison Charts ::
Electricity Feb. 2013 Feb. 2014
Electricity kWh 47.1 71.9
Electricity Cost $5.18 $7.89
To note :: my usage is higher because I built an indoor greenhouse to grown my own food in the winter months. But the yOy increase.....hmmmmm what is this inflation they say isn't happening? I love my bill going from $190/mt to $385/mt
Luckily here in Denver we have one Utility company to choose from, but thank goodness for regulations and them stopping monopolization of industries....ohhh wait what?
Can you smoke the "food" that you grow in your indoor greenhouse?
Maybe haha, but more so grow temp sensitive plants in there, since my tomatoes, peppers, and spices usually freeze or fry here every year from the drastic shifts in weather we get.
So, 1st we kill all housing values, and let renters buy them on the cheap ....
eastern long island all my clients for the past 3 yrs are connected to wall str compared to prior yrs all clients were higher middle class none financial types. the new clients are good people but elitists with justification. lots of "becoming god " types. which is just the new form to justifications, not only hording wealth at all costs but dilutes earthly responsibility.
delusional people who spout surface concern of symptoms to none sustainability but celebrate and support higher gdp we are fucked as of today. maybe tomorrow will be differentwhy are education and communication grouped together ? So tuition which "only" went up 3k this year is offset by my vonage bill, which having stayed the same but includes 50% more minutes for the same $20./mo. Since tuition went up ten % but my voip phone bill effectively went down 50%, so I am ahead ofthe game by 40% ?? Is that why they are grouped together?
Good thing Education and Communication are combined. Depressing picture otherwise.
In NY local property taxes now have 'caps' - in theory. Local gov has been staying within the limits - with cuts to meet those limits but the local school system is playing major games. Teachers agreed to 0% raises this year and 1% next year BUT the district is still pulling money out of 'reserves' to stay within the cap. Wonder how long those 'reserves' are going to last.
And this is a 'good' district (though not as good as they think) where parents pony up some big $$$ to pay for things that SHOULD be part of the district budget. The local educational 'foundation' lets people write off contributions while paying for a better school system than the local tax base would otherwise be willing to support.
Note: MY property taxes have still TRIPLED in the 20 years I've been here and are more than I made (gross) as the top paid engineer in my graduating class in 1980. I figure our local property taxes are 10-15 times what my brother in NC pays though the school systems there are horrid - his kids are dumb as rocks (his then 3rd grader - a 'top' reader in his school couldn't match our Kindergartener). Things didn't get better with time... his kids went to the lower tier state schools in NC, mine to some of the best in the country (though that was IN SPITE of the local school system).
Sadly I've come to the conclusion that most public schools (with VERY few exceptions) at the top or bottom rarely manage to do a really good job. They do OK with reasonably intelligent kids - though they leave the very top performers bored to tears. The vast middle is given little attention and muddles through without really reaching their potential. The bottom group is dealt with ONLY because laws and regulations demand that schools pay attention to them though the end result is still pretty sad even for the 'successes'. On the other hand most charter schools are excuses for blatant discrimination or money makers for private owners and traditional private schools are often overpriced - appealing to snobbery more than developing potential. The 'competitive' public schools seem to do the best job with truly bright kids but there are maybe a few dozen of them in the country.
Food and beverage is up only 1% from last year? These numbers seem notably low from my reality.
Why don't they include taxes in the computation of the CPI? Taxes are gong up dramatically.
Surprised nobody else pointed this out. Never mind electric and gas rate increases - look at all that extra tax crap on your bill. Wired phone service? I think the taxes and fees were as much as the damn basic service. Now add in soft taxes, like mandatory auto insurance. I'm pissed that bare-bones minimum legal liability coverage today costs about what a DWI would cost you in high risk rates ten or fifteen years ago. Then there's the Obamacare soft tax... er fine.
Bullard from the Fed says there is no inflation. Do not question the Fed.
#bullshitartist
I give up. Maybe it's time for the maxim: "If you can't beat em, join em". Working at the BLS seems to be a good gig, the mathematics seem real simple (just make shit up), the media never picks apart your work and there's even a touch of creative writing. Plus I bet you can never be fired. Anyone know if they're hiring?
There is one, and ONLY one "inflation" the fed and their handlers care about:
Wage inflation.
Everything else will be massaged, stroked, hand-jobbed, or otherwise hedonically adjusted to flat or even deflation.
Volker raised rates because workers were demanding (and getting) real COLA raises, primarily thru unions and such.
Those days are gone. Long gone.
You won't see admitted inflation again probaby in your lifetime.
As the Nazis knew all too well.......If you gonna lie, tell a big one. And the masses will eventually believe it.
Very astute observation, once you realize we are human livestock to the .000000001 it gets easier to recognize what is really going on.
at what point or price does power from fossil fuels actually force people to use manual labor to do stuff, bicycles don't count yet they are mainly recreation but when does labor become cheaper than hydralic operated machines? $400 barrel? $1000 I don'r care I'm a useless old person.
Those who believe any government numbers deserve the same fate as those who use XP for security.
Nemeses, bitches!
What we are seeing is stagflation. Prices rising not because of increased real demand but increased printing. I gauge inflation based on cheese prices. Well over fifteen percent per year rise each of the last three years.
I don't follow too many retail prices but I buy 2 litre bottles of Dr.Pepper regularly at the Dollar Store down the street. They've gone from $1.35 a year ago to $1.50 know. Beef too is getting very pricey. Good hamburger today is where New York Steaks were 2 or 3 years ago.
After much thought I have come to the conclusion that while inflation appears tame and is not showing up in a big way the seeds have been planted, and the number of them is somewhat shocking. Inflation lurks beneath the surface and is hidden away in the dark corners of our future. Want to know where the real cost of things is going, just look at the replacement cost from recent storms and natural disasters.
Several things to consider when trying to understand inflation come to mind, first competition tends to keep price increases in check, and our slow growth economy is helping the consumer in many areas. People concerned about inflation down the road point out that an increase in the speed or velocity that money moves about the economy or where money flows could change all that. More on the subject of where inflation is hiding in the article below,
http://brucewilds.blogspot.com/2013/06/inflation-lurks-beneath-and-hidde...
"OER has risen to the highest since the Lehman failure, total non-shelter core CPI continues to decline. What is notable is that OER amounts to 23.9% of the CPI basket - as such it is the single largest determinant of inflation as measured by the BLS...."
Q? are u implying that OER = 23.9% of CPI-U basket - or - of core CPI?????