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Inflation is highly manipulated by goverment and is usually 2x lower than real inflation. On the following site you can check the inflation calculated based on

Inflation is highly manipulated by goverment and is usually 2x lower than real inflation. On the following site you can check the inflation calculated based on the past methods (before 1990): http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts as you can see, inflation calculated using the old method is 2x higher than the current one (8% vs 16%)

once_inc 4y ago
Shadowstats's methodology is not uncontested by the way. That said, CPI is actively manipulated by governments worldwide.
onlyrealcuzzo 4y ago
The problem with the Fed's measure is there's too much substitution. The problem with Shadowstats is that there isn't any substitution. If the price of gold goes up - but you can get your cavities filled with a way cheaper and better substitute - that seems like a win. If the price of silicon goes up, but you can get an exponentially more powerful computer for the same price that uses less energy (because the chip size shrinks) - that seems like a huge win. If the price of cars is flat - but the safety ratings, reliability, and gas mileage have improved enormously, that seems like a win. Then you have things like food and housing where the substitutes actually make things (arguably) worse... One thing is clear - if you use Shadowstats measures of inflation - the US economy is ~25-75% smaller than it was in the 80s. This idea is absurd.
tablespoon 4y ago
> Inflation is highly manipulated by goverment and is usually 2x lower than real inflation. You just seem to be generically responding to the keyword "inflation." I would bet this rate is almost completely driven by fallout from a nearby war with a major energy exporter that's resulting in embargoes and boycotts: > Energy prices continue to have the greatest effect in May, with price advance there jumping from 37.5 percent in April to 39.2 percent in May. Estonia is quite close to that exporter, and I'd imagine they've been affected more than some other countries.

once_inc 4y ago

Shadowstats's methodology is not uncontested by the way. That said, CPI is actively manipulated by governments worldwide.

onlyrealcuzzo 4y ago

The problem with the Fed's measure is there's too much substitution. The problem with Shadowstats is that there isn't any substitution. If the price of gold goes up - but you can get your cavities filled with a way cheaper and better substitute - that seems like a win. If the price of silicon goes up, but you can get an exponentially more powerful computer for the same price that uses less energy (because the chip size shrinks) - that seems like a huge win. If the price of cars is flat - but the safety ratings, reliability, and gas mileage have improved enormously, that seems like a win. Then you have things like food and housing where the substitutes actually make things (arguably) worse... One thing is clear - if you use Shadowstats measures of inflation - the US economy is ~25-75% smaller than it was in the 80s. This idea is absurd.

tablespoon 4y ago

> Inflation is highly manipulated by goverment and is usually 2x lower than real inflation. You just seem to be generically responding to the keyword "inflation." I would bet this rate is almost completely driven by fallout from a nearby war with a major energy exporter that's resulting in embargoes and boycotts: > Energy prices continue to have the greatest effect in May, with price advance there jumping from 37.5 percent in April to 39.2 percent in May. Estonia is quite close to that exporter, and I'd imagine they've been affected more than some other countries.