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HIDDEN INFLATION - "Fewer Sheets Needed to Get the job Done"

I suppose you can ridicule over-weight people if you want, but it is pitiful that you think then you prove something by it other than something about yourself.

Paying the same price for less product is hidden inflation and actual content sizes of many products including food is shrinking for the same product price. Your seeing this as your chance to laugh at overweight people is just what it is about yourself. The fact is that all people have to eat - not just people you ridicule and see yourself as superior to - and many people are increasingly having a difficult time being able to afford food.

And since you apparently don't wipe your ass when you **** then yes, the price of toilet paper is irrelevant to you.

Oh spare me your outrage and go fight evil giraffes trying to take over secret base in the Middle East all while under a CIA contract with a PhD student and a young beautiful Israeli woman named Shamza.
 
Oh spare me your outrage and go fight evil giraffes trying to take over secret base in the Middle East all while under a CIA contract with a PhD student and a young beautiful Israeli woman named Shamza.

Is that supposed to be humor? :roll:
 
I don't think so. That's just justification for permanent inflation, which would not be so prevelent if our currency wasn't issued by fiat.
You're half right on this point. It is true that we have had "permanent inflation" because we're on a fiat currency. IIRC the average annual inflation rate since dropping the gold standard is around 3%.

You're missing the other half of the equation. Namely, when the USD was on or linked to a hard currency, or if it was otherwise fixed, the economy would yo-yo between periods of inflation and deflation.

For example, during a deflation consumers slowly realize that the cost of goods will fall in 6-12 months, and they often put off major purchases. Companies react by reducing production and/or inventory, which means they fire people, which means people can't buy as much, which exerts more downward pricing pressure, and so forth. This is known as a "deflationary spiral." Not every deflation winds up causing a spiral. However, that was a key driver of unemployment during the Great Depression.

You may have a few unusual situations like what we see now, where savings rates are below inflation rates, which slightly erodes the value of those liquid holdings. However, this in turn exerts pressure on citizens to purchase goods, which causes a virtuous spiral, opposite of the deflationary one. This is also a temporary situation, as indicated by how savings are at "historic lows."

I.e as long as purchasing power keeps up with inflation, then low rates of inflation are not a problem.

And moving to a fixed currency is not going to result in stable pricing. Quite the opposite, in fact. Which is one of many reasons why we use a fiat currency.


As for your claim that real prices have been going down for years? What fantasy world does that come from? In order for consumer prices to "really be going down" we must focus on those products people would consider "needs"....
I did not say that prices are exclusively falling, I said that some prices rise and others fall.

And yes, this is visible to those who actually track prices.
 
You're half right on this point. It is true that we have had "permanent inflation" because we're on a fiat currency. IIRC the average annual inflation rate since dropping the gold standard is around 3%.

Thanks for admitting that much at least.

You're missing the other half of the equation. Namely, when the USD was on or linked to a hard currency, or if it was otherwise fixed, the economy would yo-yo between periods of inflation and deflation.[

For example, during a deflation consumers slowly realize that the cost of goods will fall in 6-12 months, and they often put off major purchases. Companies react by reducing production and/or inventory, which means they fire people, which means people can't buy as much, which exerts more downward pricing pressure, and so forth. This is known as a "deflationary spiral." Not every deflation winds up causing a spiral. However, that was a key driver of unemployment during the Great Depression.

I am not missing the "other half of the equation," because the yo-yo effect never caused that kind of problem. Your reference to the "Great Depression" downward spiral was based on a problem similar to fiat money, i.e. business growth based of the "promise" of available capital. When investors could purchase stock on margins as high as 90% this created an aura of false wealth businesses used to expand with. However, when brokers made margin calls due to business needs investors could not meet the demand, undermining the entire financial system. This "burst the bubble" of false wealth underlying economic growth and started a panic; the rest was history.

Don't even try to blame that on representative money; that was wholly the fault of poor investment practices. The same attitudes about faulty investment practices current investment banks used that led to the recent Great Recesssion of 2008.

Another factor people keep overlooking is the extensive use of credit that is creating more personal debt over the last 20 years than ever existed in our country prior. That's what many people are using today to access all those "wonderfully cheap TV's, computers, etc. etc. etc." not actual disposable income. People have taken up "deficit spending" almost as madly as out government.
 
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Disposable income? LOL Throwing more worthless paper in my direction while telling me "see you have more to buy with" claiming this proven due to cheaper, disposable, poor quality "non-needed" products I only rarely buy does not equate to more "disposable income."

A basic error in terminology. Disposable income is also known as income after taxes. Since you are struggling, we'll keep it simple; per capita income between 1933 and 2008, adjusted for inflation, has increased by 675%! So even though a plethora of goods and services are more expensive now (like a doctor, or gallon of gasoline), people are more wealthy than they have ever been.
 
Inflation reduces the value of debt and is a gradual decline it individual spending power and in the wealth of the nation.

That is only true, IFF, inflation increases faster than the rate of economic growth.
 
Thanks for admitting that much at least.
It's not an "admission" to recognize established facts, but okay... ;)


I am not missing the "other half of the equation," because the yo-yo effect never caused that kind of problem.
Yes, it did, and quite clearly so.

inflation-recessions-1872-present.gif


The gray shaded areas, by the way, are recessions, depressions and panics. These economic downturns were both longer and more frequent prior to eliminating the gold standard.


When investors could purchase stock on margins as high as 90% this created an aura of false wealth businesses used to expand with....
Yes. You're talking about causes of the Great Depression. What I'm talking about is what happened repeatedly during the Great Depression.

Once the markets crashed, consumption crashed, so manufacturers started firing people and lowering prices. This in turn reduced consumption, which reduced inventory and manufacturing, which in turn reduced consumption, and so forth.

The US was also on the gold standard during the 1920's. That didn't stop anyone from generating tons of credit, or making loans without proper due diligence, or tamp down the speculators.


Another factor people keep overlooking is the extensive use of credit that is creating more personal debt over the last 20 years than ever existed in our country prior.
FYI, most household debt, and the increase in household debt, is in mortgages.

NY-Fed-Total-Debt-Balance-and-Composition.png
 
A basic error in terminology. Disposable income is also known as income after taxes. Since you are struggling, we'll keep it simple; per capita income between 1933 and 2008, adjusted for inflation, has increased by 675%!.

Again I have to laugh...because you can't be "wealthy" when your money is essentially worthless. 675% more of zero value fiat paper, as compared to 100% value inherant in representative money is no comparison. It does not help either when as you admit...

So even though a plethora of goods and services are more expensive now (like a doctor, or gallon of gasoline), people are more wealthy than they have ever been.

I won't go back as far as 1933, let's stick to a the period right after we went off representative money and changed to fiat money, 1975:

When a gallon of regular gas in 1975 was $0.57 and now it is $3.69 on average but $4.25 in cities. Thats a 650% - 750% increase...

When average rent in 1975 was $200 a month and is currently $1,062.00 a month. That's a 531% increase...
EconomicPolicyJournal.com: Price Inflation Watch: Average NYC Rent Passes $3,000

Using your own vaunted CPI the prices of basic food products, not including sweets and sodas, have grown every single year. Even you agree medical costs have sky-rocketed. Those are just a few examples of "real" consumer costs you all try to subsume in this CPI "Basket of Goods" b/s.

So HOW are we "more wealthy every year" when the extra money barely meets the costs of basic living expenses? That's why I find claims like your's abominable propaganda.
 
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The gray shaded areas, by the way, are recessions, depressions and panics. These economic downturns were both longer and more frequent prior to eliminating the gold standard.

As usual out come the professional graphs and charts..."pay no attention to the reality behind the curtain again...be mystified by my construct of figures...it's not the fault of investment banks..." Meh!.

Once the markets crashed, consumption crashed, so manufacturers started firing people and lowering prices. This in turn reduced consumption, which reduced inventory and manufacturing, which in turn reduced consumption, and so forth.

This had NOTHING to do with the gold standard, and EVERYTHING to do with poor investments which undermined the false values of corporate structures. That led to business owners involved in the crash and other businesses dependant on those involved to attempt mass cutbacks in order to try to reduce fixed costs and retain capital value. Of course this led to fewer people with incomes to buy creating more reductions and more people who could not afford to buy etc. etc.

That's history bud, something your charts and graphs have no effect on.

FYI, most household debt, and the increase in household debt, is in mortgages.

FYI Not everyone OWNS a house, mortgage or not, but nearly everyone who DOES also has credit card debt in addition to mortgage debt. Credit card debt is "deficit spending," and we are talking about people who also don't own homes.

U.S. household consumer debt profile as of July 2013:

U.S. household consumer debt profile:

Average credit card debt: $15,325
Average mortgage debt: $147,924
Average student loan debt: $32,041
In total, American consumers owe:

$11.16 trillion in debt
A decrease of 1.6% from last year
$856.5 billion in credit card debt
$7.86 trillion in mortgages
$999.3 billion in student loans
An increase of 6.1% from last year

American Household Credit Card Debt Statistics: 2013

So much for "disposable income."
 
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Again I have to laugh...because you can't be "wealthy" when your money is essentially worthless. 675% more of zero value fiat paper, as compared to 100% value inherant in representative money is no comparison. It does not help either when as you admit...

This statement above has zero value! If you do not value your paper fiat dollars, send them to me! I will PM you my paypal information. :lol:

I won't go back as far as 1933, let's stick to a the period right after we went off representative money and changed to fiat money, 1975

When a gallon of regular gas in 1975 was $0.57 and now it is $3.69 on average but $4.25 in cities. Thats a 650% - 750% increase...

LOL! Nominal personal income (not adjusted for inflation) has increased from $1.3349 trillion in 1975 to $13.431 trillion. That is a 906% increase. FWIW, $0.57 to $3.69 is a 547% increase.

When average rent in 1975 was $200 a month and is currently $1,062.00 a month. That's a 531% increase...

Actually, it is 431%. Personal income has still increased by more than double what the price of rent has increased.

That's why I find claims like your's abominable propaganda.

You simply have no idea what you are talking about.
 
You simply have no idea what you are talking about.

No, I simply refuse to be baffled by your B/S. Major difference. You use your charts, and I use real-world experience. I could have sworn we already agreed that we do not accept each other's "facts." Who are you trying to convince here, because it certainly isn't me. LOL
 
Another instance where Canada is ahead of the curve.

Beautiful... more taxation, and taxation in an attempt to shape behavior.

I say... reduce taxes, get government lean, and get your Nanny Bloomberg mentality out of my life. Adults should be able to purchase whatever food items they want without some dimwits passing laws in an attempt to protect us from ourselves.
 
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No, I simply refuse to be baffled by your B/S. Major difference. You use your charts, and I use real-world experience. I could have sworn we already agreed that we do not accept each other's "facts." Who are you trying to convince here, because it certainly isn't me. LOL

A most aggressive tone given you couldn't even manage simple math. When you are proven to be wrong, you shift gears into full denial mode. Nobody forced you to respond to my comment pertaining to real disposable income.
 
Beautiful... more taxation, and taxation in an attempt to shape behavior.

I say... reduce taxes, get government lean, and get your Nanny Bloomberg mentality out of my life. Adults should be able to purchase whatever food items they want without some dimwits passing laws in an attempt to protect us from ourselves.

And when their desires cause health care costs for the rest of us to balloon, its just the free market at work!
 
And when their desires cause health care costs for the rest of us to balloon, its just the free market at work!

That is why the government shouldn't be in the business of healthcare. They run up costs, reduce services, and increase delays.

To paraphrase Milton Friedman... "you create a communist system of healthcare delivery and you get a communist result." If you want the exact quote read his interview at Hillsdale College... documented in their publication Imprimis.
 
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A most aggressive tone given you couldn't even manage simple math. When you are proven to be wrong, you shift gears into full denial mode. Nobody forced you to respond to my comment pertaining to real disposable income.

Aggressive mode...funny. In any case I've provided all the math I needed to prove your position is just smoke and mirrors. The CPI is a skewed statistic used by the government and economists who support the government (and thus corporate interests) to maintain faith in the current economic system. You pick and chose whatever you think will reflect best on a bad situation.

I've shown that your "disposable income increase" is a farce. It does not matter if wages have increased when prices have increased even faster. It does not matter if the price of a television or computer seems cheaper than when it was first introduced if the prices of rents, gas, basic foods, and other necessities are more expensive and use up most workers wages. It does not matter if your voodoo economics show a land of plenty when that plenty is purchased through consumer use of deficit spending.

Like I've said, statistics can be twisted into any usage people like yourself think most beneficial to your political economic position. Reality, and the actual experiences of consumers can't be twisted.
 
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I largely agree with the idea that there are hidden inflations in the products we purchase. There are a number of ways that government statisticians hide this fact. For example, food and energy costs are excluded from inflation calculations because the prices for these are "too volatile" (nevermind that the volatility is mostly to the upside).

With regard to the sort of thing Captain Adverse is claiming, government statisticians regularly make use of a "value added" factor in their calculations to reduce some of the price increase of consumer goods. For example, it used to be the case that dishwashers would be controlled by a dial. When buttons became popular, the price increases in dishwashers were factored out for a few years (even though the increases probably had nothing to do with the design changes) because customers were receiving more for their money (supposedly) in that they could now press buttons rather than turn knobs. Back when I worked in the grocery industry, it was a fairly regular occurrence that a manufacturer would charge the same amount of money for a slightly smaller package, and do this over a couple of years. Ten-ounce containers of yogurt became eight and then six, for the same price. 16 ounces of potato chips became 15, then 14, then 12, for the same money. But these sorts of changes, which were quite common and almost always to the downside, didn't have an effect on the CPI, when clearly they should have. The statisticians who contacted my company for pricing info did not collect data on size changes. They just wanted price changes.
 
....these sorts of changes, which were quite common and almost always to the downside, didn't have an effect on the CPI, when clearly they should have. The statisticians who contacted my company for pricing info did not collect data on size changes. They just wanted price changes.
The BLS does, in fact, check serving / package sizes on goods.

Each month, BLS data collectors called economic assistants visit or call thousands of retail stores, service establishments, rental units, and doctors' offices, all over the United States, to obtain information on the prices of the thousands of items used to track and measure price changes in the CPI. These economic assistants record the prices of about 80,000 items each month, representing a scientifically selected sample of the prices paid by consumers for goods and services purchased.

During each call or visit, the economic assistant collects price data on a specific good or service that was precisely defined during an earlier visit. If the selected item is available, the economic assistant records its price. If the selected item is no longer available, or if there have been changes in the quality or quantity (for example, eggs sold in packages of ten when they previously were sold by the dozen) of the good or service since the last time prices were collected, the economic assistant selects a new item or records the quality change in the current item.

The recorded information is sent to the national office of BLS, where commodity specialists who have detailed knowledge about the particular goods or services priced review the data. These specialists check the data for accuracy and consistency and make any necessary corrections or adjustments, which can range from an adjustment for a change in the size or quantity of a packaged item to more complex adjustments based upon statistical analysis of the value of an item's features or quality. Thus, commodity specialists strive to prevent changes in the quality of items from affecting the CPI's measurement of price change.​

Emphasis added.

Consumer Price Index Frequently Asked Questions

/end thread
 
I've shown that your "disposable income increase" is a farce. It does not matter if wages have increased when prices have increased even faster.

You have shown you are not good at calculating percentage change between two values. Personal income has increased by more than 900% since 1975.
 
A basic error in terminology. Disposable income is also known as income after taxes. Since you are struggling, we'll keep it simple; per capita income between 1933 and 2008, adjusted for inflation, has increased by 675%! So even though a plethora of goods and services are more expensive now (like a doctor, or gallon of gasoline), people are more wealthy than they have ever been.

Naw, you can't selectively pick a period starting pre-WWII at 1933. The USA conquered the world in 1945. And became fabulously wealthy as a result for the next 2 1/2 decades.
 
You have shown you are not good at calculating percentage change between two values. Personal income has increased by more than 900% since 1975.

Really? Well, according to the attached chart created from figures taken from U.S. Census; the average household income in 1975 was $10,316.00, adjusted for inflation that was the equivalent of $44,851 in 2013 dollars...

In 2011 the median household income adjusted for 2013 inflation was $50,054. That's only an inflation adjusted value difference of $5,203 between 1975 income and 2011 income.

So much for YOUR figures of a 900% increase. Not much real value difference is there? duh! We're not all as stupid as you might think.

Median Household Income History in the United States
 
Really? Well, according to the attached chart created from figures taken from U.S. Census; the average household income in 1975 was $10,316.00, adjusted for inflation that was the equivalent of $44,851 in 2013 dollars...

In 2011 the median household income adjusted for 2013 inflation was $50,054. That's only an inflation adjusted value difference of $5,203 between 1975 income and 2011 income.

So much for YOUR figures of a 900% increase. Not much real value difference is there? duh! We're not all as stupid as you might think.

Median Household Income History in the United States

Please learn the difference between median household income and per capita income.
 
Please learn the difference between median household income and per capita income.

Geez...I don't need to know the difference. If $10,316 1975 dollars was the inflation adjusted equivalent of $44,851 in current dollars...your figures don't show that your 900% personal increase is that much of a real increase at all.

Stop with your smoke and mirrors.
 
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Geez...I don't need to know the difference. If $10,316 1975 dollars was the inflation adjusted equivalent of $44,851 in current dollars...your figures don't show that your 900% personal increase is that much of a real increase at all.

You are just confused. The 900% figure is in nominal terms (not factored for inflation) as were your rent and gasoline data points.
 
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