Date: Tue, 8 May 2007 09:30:50 -0500
From: darkness39@yahoo.com
Newsgroups: misc.invest.financial-plan
Subject: Re: True US Inflation at 11% ?
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On May 8, 10:07 am, "Sgt.Sausage"  wrote:
> "Will Trice"  wrote in message
>
> news:463CAFD0.3090606@paragondynamics.com...
>
>
>
> > Sgt.Sausage wrote:
>
> >> I've been monitoring my expenses for the last
> >> 15 years or so. My number runs about 6.2% these days.
> >> A far cry from the official 3 to 3.5% numbers,
> >> but certainly nowhere near 11%.
>
> > Are you saying that your expenses are increasing 6.2% per year, or that
> > the price of the various things you buy have risen 6.2% per year?  How do
> > you weight the prices of things you buy?  What items did you select to
> > monitor?  How do you account for changes in quality, features, etc.?
>
> I don't monitor "quality, features, etc.".
>
> A dozen eggs is a dozzen eggs. A loaf of bread is a loaf
> of bread.

Actually food prices have fallen-- especially staples like chicken.
Along with clothes.

 A gallon of gas is a gallon of gas. A bale of
> hay is a bale of hay.

A gallon of gas is not a gallon of gas ;-).  A British gallon of gas
has a higher octane content than an American gallon.  Or see Canadian
beer v. American ;-).  Gas prices were on a long slide from 1981,
bottoming in 1998.  They've now, just about, got back to their 1981
level (but incomes are much higher).

More seriously, a personal computer now is a very different thing than
the IBM PC you could buy in 1981-- something like 1000 times faster,
with 4000 times more memory.  And your car has air bags, anti-skid
brakes etc. and a host of features it just didn't have in 1981.  And
on average, 40% more horsepower.  And it's more reliable.

Your healthcare is also better (but more expensive).  The chance of
dying of leukemia has something like halved since the 1970s (childhood
leukemia used to be a death sentence, now it has something like an 80%
cure rate).  There are cancers then, that were incurable, that now
have a near 90% 5 year life expectancy.

>
> For the basics, you can forget quality, features, etc.
> Any attempts to classify these things will only result
> in the bogus numbers you can get from Uncle Sugar.

You see the problem above.  They are *not* bogus.  However they create
a perception that prices have risen by more than the published numbers
(because we take the quality improvements as read, and notice the
sticker price only).