Is the U.S. purposely under-reporting inflation? It’s hard not to wonder when you look at how it’s calculated. Opinion by Frank_Giustra
We are living in a world where people seem to relish in the consumption of misinformation. That is, different versions of reality and alternative facts. Some of the stuff people believe is beyond looney. For instance, it’s easy to dismiss the truly wacky stories from the QAnon world about politicians and Hollywood elites drinking the blood of babies.
The reported CPI is currently running at just under seven per cent, annualized. You might be surprised to hear that number would be closer to 15 per cent if the BLS used the same formula it did in the 1970s. . At some point in the 1990s the U.S. Congress decided the old formula needed updating, so they introduced several ‘methodological improvements.’
The approach they use is so complex, even Stephen Hawking would have difficulty deciphering it. As an example, the following is the BLS’ own attempt at an explanation of their approach when calculating the hedonic value improvement of a TV set.
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