[quote]You can’t just look at the narrow definition of CPI and say, “Look, no inflation!”
You have to look globally, and at EVERYTHING that money can buy at a given point in time. Today, your money can buy far, far less than it could two years ago, and that’s a fact. [/quote]
Did I say “no inflation”? I fully concur, some things got more expensive in two years. Stocks are up because they were undervalued in January 2009. Commodities are up because emerging economies are growing. Here’s industrial production in advanced & emerging economies:
[quote]I think it’s foolish for our CPI numbers to look at such a narrow “basket of goods” to determine whether or not there is inflation. As a matter of fact, if the CPI had taken asset prices into consideration as well, the inflation numbers during the bubble would have (hopefully) sounded the alarm much earlier than having to wait for the “financial crisis” to be officially noticed by the dolts who only look at CPI.[/quote]
There are many different reasons why you might want to measure the rate of inflation, and different reasons may require different definitions. People at the Fed who work on monetary policy use core CPI, which does not include food or asset prices, and there’s a good theoretical justification for that.
