Re:Yield of 0% a First at 3-Month Treasury-Bill Sale
by JamesBarney on Tuesday October 06, 2015 @05:47PM
(#10342650)
It's not just the government who claim there is low inflation. The vast majority of economists and researchers who study inflation believes it is low as well.
What do you think could be driving the acceleration of inflation you mention? The mainstream story is inflation is driven by wage gains when the economy starts to overheat. This increase in wages is then passed onto the consumer, who to afford the increased prices asks for a wage increase and the cycle continues. I don't know think there is currently a general overabundance of jobs in the U.S. economy driving large wage increases.
It seems disingenuous of the government to continue their claim of low inflation. I understand that their basket of goods used for measurement can't be perfect, but it appears that it is gamed quite a bit.
Substituting ground chuck for steak, or using technological increases (e.g. CPU speeds) as criteria is blatantly misleading. But the biggies aren't even taken into account. Rent and home prices have gone exponential in many areas, health care and tuition prices go up about 10% / year, property tax rates are pushed up, road tolls added, red light cameras installed, etc.
So I guess if you're a 65 year old on medicare and social security, with a long-ago paid off mortgage tied to a legally fixed property tax (e.g California) and no commuting and child-care expenses, the fact that the price of eggs or Frosted Flakes hasn't increased in the last year might support an argument for low inflation.
Not so much if you're of working age and still dealing with school loans, rent / home prices, commuting, etc.