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Inflation
Old 06-23-2020, 01:49 PM   #1
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Inflation

Earlier today, on a different forum, the subject of interest rates & inflation was being discussed.

I stated how much my homeowners insurance has risen since 1994, how much the price of something like a new furnace, hot water heater, healthcare, automotive insurance, etc. had risen over that time.

Someone replied with a link.

https://chapwoodindex.com

Very interesting.
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Old 06-23-2020, 01:57 PM   #2
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There is also something known as a personal rate of inflation. If you move to a LCOL area, cook more at home, get rid of expensive subscriptions, etc, it can help offset things you can't control like property taxes, healthcare and hot water heaters.
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Old 06-23-2020, 01:59 PM   #3
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Originally Posted by COcheesehead View Post
There is also something known as a personal rate of inflation. If you move to a LCOL area, cook more at home, get rid of expensive subscriptions, etc, it can help offset things you can't control like property taxes, healthcare and hot water heaters.
You just described me. My monthly expenses are still the same as they were when I retired in June 2015.
Of course part of that is because I had a car payment back then, & raised my homeowners insurance deductible from $1000.00, to $5000.00.
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Old 06-28-2020, 08:29 PM   #4
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I’ve seen that index before and initially I was shocked and upset thinking, “Why aren’t they telling us that inflation is close to 10%!?” Then I reviewed my personal spending for the past five years, realized it was flat, and went back to watching The Simpsons on Disney+.
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Old 06-28-2020, 08:51 PM   #5
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If inflation were really that high, GDP would be negative all the time and we wouldn’t have any economic growth.
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Old 06-28-2020, 09:01 PM   #6
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Originally Posted by RenoJay View Post
I’ve seen that index before and initially I was shocked and upset thinking, “Why aren’t they telling us that inflation is close to 10%!?” Then I reviewed my personal spending for the past five years, realized it was flat, and went back to watching The Simpsons on Disney+.
Yeah, our personal spending was flat for the first 10 or so years. We spent quite a bit initially, then it drifted down.
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Official CPI Managed Down to reduce SS & wage Costs
Old 06-28-2020, 09:14 PM   #7
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Official CPI Managed Down to reduce SS & wage Costs

Official CPI Managed Down to reduce SS & wage Costs

Because wage costs, COLAs and SS follow the CPI, it has been managed down since the 1990s.

Changes to the CPI calculation methodology used by the Department of Labor have reduced the measured CPI rate by an estimated 0.7% over the 1995-99 period and other changes further reduced the CPI.

The December 1995 report of the United States Senate Finance Committee’s Commission on the Consumer Price Index (the Boskin Commission) stated that the U.S. CPI was an upwardly biased measure of the cost of living that most likely exaggerated inflation by 1.1 percentage points a year. The conclusion of the Boskin Commission has been supported by numerous other studies, including those by Federal Reserve Board Economists (ALL OF WHOM WANTED TO REDUCE FEDERAL GOVERNMENT SS COSTS AND WAGE GROWTH).

Post Boskin Commission, the DOL changed how CPI was measured...GDP looked better but people felt poorer....all by design.
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Old 06-28-2020, 09:19 PM   #8
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If inflation were really that high, GDP would be negative all the time and we wouldn’t have any economic growth.
Correct. "Real" GDP is after inflation. So under-estimating CPI increases real GDP which makes politicians feel good.

But with wages stagnating and so many people falling behind economically, many question the CPI and "real" GDP numbers.
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