According to the "prophecy," when you keep expanding the money supply, lower the interest rates, and generally prop up an economic recession - you end up with massive inflation.*
My grandmother used to say the surest way to measure inflation was by watching the price of salt.
Salt is relatively free of subsidies, price wars, technical advances and the like - you basically dig it up, clean it, and sell it. You don't see a sale on salt - it's just what it is. (Excluding the British)
So, I'm confugled now... I paid 54¢ for salt, up from to 34¢ a year ago - showing an increase of 54% in price. Sure, a lot of that is oil and transport increases, but surely there's some inflation there? Surely it's more than the 4.1% (including oil & transport!) which the CPI showed for 2007.
So I go to look at the RAW CPI data. When I was a kid, you got to see the price of milk the CPI based their adjustments. But since 1998, the CPI is index based. Meaningless numbers have replaced reality, with this "index" based on an average price increase, from an average cost collected in the years 1982-1984.
Confused yet? Ah, but wait! Now we also have "seasonally adjusted" this index so that it gets flatter - so an obvious trend can be "seasonally" adjusted for, oh say, any reason at all!
My advice - stick to the salt.
Oh, and save, save, save.
* inflation: a general increase in prices and fall in the purchasing value of money
2 comments:
This is not good news, especially considering that the Fed is dramatically lowering interest rates.
Used to be that "recession" was a euphemism for "depression." Now, it's gotten so bad that even "recession" is a dirty word.
Yes indeed -- save, save, save.
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