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Old 03-02-2013, 07:38 PM   #21
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Originally Posted by bondi688 View Post
There is no inflation? My trips to the grocery stores and gas stations every week say otherwise. Airfares have gone up a fair bit. The recent pop up of housing prices will exert upward pressure on cost of living as well.
You response demonstrates that you don't understand what inflation is:

1. Food costs for American hardly matter in the big picture since food would be 5% to 8% of a normal household budget. People focus unreasonably on food when thinking of inflation because they make many more food purchasing decisions in a month than, say, rent. Rent is likely to be 30% of a household budget. Your rent hasn't gone up or you would have complained about that first.

2. Airfares are up because of high fuel prices and low traffic has caused airlines to cut back on flights. Since such increases are not across-the-board, it is not inflation which is due to a change in the value of money and everything it buys.
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Old 03-02-2013, 08:12 PM   #22
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Originally Posted by Khufu View Post
You response demonstrates that you don't understand what inflation is:

1. Food costs for American hardly matter in the big picture since food would be 5% to 8% of a normal household budget. People focus unreasonably on food when thinking of inflation because they make many more food purchasing decisions in a month than, say, rent. Rent is likely to be 30% of a household budget. Your rent hasn't gone up or you would have complained about that first.

2. Airfares are up because of high fuel prices and low traffic has caused airlines to cut back on flights. Since such increases are not across-the-board, it is not inflation which is due to a change in the value of money and everything it buys.
My rent certainly had gone up, 5% a year in the last 2 years. Did not include it because I think mine was still lower than the average rent in the city.
I certainly saw a decrease of the value of the dollar and a lot of things it buys. I cannot say everything, because I do not buy everything. So if the increase in price of food, fuels, good and services are not inflation, what would need to happen before you think there is inflation?
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Old 03-02-2013, 10:22 PM   #23
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My rent certainly had gone up, 5% a year in the last 2 years. Did not include it because I think mine was still lower than the average rent in the city.
I certainly saw a decrease of the value of the dollar and a lot of things it buys. I cannot say everything, because I do not buy everything. So if the increase in price of food, fuels, good and services are not inflation, what would need to happen before you think there is inflation?
I would expect to see the CPI go up more than the 1.6% it reported for the 12 months ending. I would expect a rise in CPI to be accompanied by a rise in GDP, which showed a growth of only 0.1% for Q4 2012. And I would expect that increase in inflation to be reflected in a rise in the interest rate demanded by buyers of US Treasury Bonds, which however remain near historic lows.

Now, it could be that a government conspiracy is jiggering all those numbers to hide the true inflation, but it would take more than some online forum user's impression of food prices to persuade me of it.
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