The whole thing stinks. I am sure that the public opinion of the Fed, BOJ and BOE must be at all-time lows.The thing that I find laughable is the way that CPI and PCE are being abused using hedonic and substitution adjustments. The lay-person thinks that CPI reflects the cost of living. This is sadly not the case. The statisticians compiling CPI figures believe that the latest iPhone having a higher resolution screen makes the cost of living cheaper through 'hedonic' adjustments. If bananas are something you buy and they go up in price then they will ignore this if apples haven't through 'substitution' adjustments. Additionally they exclude changes in the cost of putting a roof over your head however this is a large part of our cost of living.For example, in the UK, we often see news articles about deflation fears. This is rubbish. Over the past five years the cost of groceries, energy, and housing have together increased by about 50% (over the five years, not pa). Obviously this number is approximate and depends on how you weigh the constituents. I can't think of a single living expense that is cheaper today than it was 5 years ago but can give any number of examples of living costs that have more than doubled. Deflation my ars£e... Inflation is a measure of the 'cost of living' and we are definitely well on the inflation side of the fence.
Last edited by MartinGale7
on May 14th, 2014, 10:00 pm, edited 1 time in total.