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Old 04-17-2014, 12:20 PM   #21
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Join Date: Nov 2011
Location: Oak Ridge
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Last week I went to the store and bought orange juice for $3.99. This week the same brand was on sale for $3.00. I bought two. Chained-CPI recognizes I buy more OJ when it is on sale, and thus produces a slightly lower increase in prices.

Some in the discussion have used the example of steak becoming higher priced. True at present, but meat prices fluctuate because of drought and other factors. So I don't think the inference drawn from that one example is the whole story.

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Old 04-18-2014, 06:12 PM   #22
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Location: Lake Livingston, Tx
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Ok, so you don't like steak. Lets try this. Product X goes up in price so seniors start buying Y because they can not afford X. The government then reduces their income because they are no longer buying X, insuring they will never buy X again. If X is reduced in price, seniors still can not afford it because their income has been reduced. So when Y goes up in price they substitute Z, and the cycle starts over. Not only can they not afford X, but now Y is off limits. So they settle for DOG FOOD, or a bicycle, or a cot in a rented flat in a cold water walkup!

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