When it comes to inflation in the US, there are generally two schools of thought:one is that inflation is woefully – and purposefully for political means – mismeasured, and that the real inflation is orders of magnitude higher than what the BLS, with its endless array of hedonic adjustments, reports. We discussed this view in May when we presented a presentation by Devonshire Research, which showed that “contrarian” CPI is closer to 8%, not the “post-modern” accepted rate of roughly 3%.
And then there is the Fed/BLS/academic school which ignore real-world prices (and shrinkflation), and instead fixes on the core CPI number reported monthly by the BLS, which as is widely known, has been well below the Fed’s “target” of 2-3%. Of course, even the Fed is not blind to the soaring cost of rent, healthcare and education, but it conveniently masks these up by assigning specific, and very low, weights to these “outlier” items in the BLS’ inflation basket so that overall inflation appears surprisingly tame to most Americans who see a vastly different reality every time they go shopping.
This post was published at Zero Hedge by Tyler Durden Aug 7, 2017.
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