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In reality, the Dow is not at 13,000 today as we knew 13k to be back in 1998/99 during the huge stock market bubble. Inflation has eroded that nominal value by

In reality, the Dow is not at 13,000 today as we knew 13k to be back in 1998/99 during the huge stock market bubble. Inflation has eroded that nominal value by at least half. The Dow is more likely at 5,000 to 6,500 depending on what you believe real inflation has been over the past 14 years (not the Fed's bogus CPI numbers). Am I correct in interpreting this to mean that you believe that inflation has been 100% over the past 12 years (that what you could have gotten for $13 in 1999 would only get you half the same basket of goods today)?

shingen 15y ago
By the 1980 CPI, inflation is running at closer to 9% right now. So yes, I'm saying inflation has been chugging at a brutal pace the past 12 years. When the CPI was that high back then, Volcker had to take extreme measures to tame inflation. When inflation was 3% to 4% in 1970/1971, Nixon installed price and wage controls. Now when it's much higher on our new CPI, we don't even bat an eyelash at the extreme inflation. You might think, for example, that real estate has gotten cheap? It's up 100% over the last 12 years in real estate disaster zones like Phoenix. How many people have seen their wages climb 100% in the last 12 years? That's pure inflation, as the historical rate of return on real estate is closer to 1% to 2% per year. You can also blatantly track the huge inflation of the last 12 years in most commodities. The current Fed CPI, which was altered during the early Clinton years to hide real inflation, says that inflation is around 3%x. It leaves out all sorts of fun inflationary items (because the Fed says they're volatile, har har).
- Aloisius 15y ago
  What kind of fun inflationary items? And please don't say gold or oil as it would be an extreme case of cherry picking commodities.
  - shingen 15y ago
    The Fed CPI excludes food and energy. So when milk goes from $1.50 to $3.60 per gallon over 20 years, they pretend that never happened. Or when gasoline goes from $0.75 to $3.59 over 30 years, they pretend that never happened. They pretend you don't need to eat food or drive anywhere.
    - Aloisius 15y ago
      Uh, the Fed CPI does include food and energy prices. The government does have a separate "core" inflation number which excludes food and energy prices, but the regular CPI number includes food and energy and has forever. Specifically, the CPI-U includes food & energy, but economic analysts and policymakers like to use the CPI-U for All Items Less Food and Energy because of the volatility of commodities. The CPI-U however is still available and was last sitting at 3% for 2011. Again, that's with food & energy. http://www.bls.gov/news.release/cpi.nr0.htm http://www.bls.gov/news.release/cpi.nr0.htm Not only that, but the numbers that exclude food and energy make inflation look higher than when they are included.

shingen 15y ago

By the 1980 CPI, inflation is running at closer to 9% right now. So yes, I'm saying inflation has been chugging at a brutal pace the past 12 years. When the CPI was that high back then, Volcker had to take extreme measures to tame inflation. When inflation was 3% to 4% in 1970/1971, Nixon installed price and wage controls. Now when it's much higher on our new CPI, we don't even bat an eyelash at the extreme inflation. You might think, for example, that real estate has gotten cheap? It's up 100% over the last 12 years in real estate disaster zones like Phoenix. How many people have seen their wages climb 100% in the last 12 years? That's pure inflation, as the historical rate of return on real estate is closer to 1% to 2% per year. You can also blatantly track the huge inflation of the last 12 years in most commodities. The current Fed CPI, which was altered during the early Clinton years to hide real inflation, says that inflation is around 3%x. It leaves out all sorts of fun inflationary items (because the Fed says they're volatile, har har).

Aloisius 15y ago
What kind of fun inflationary items? And please don't say gold or oil as it would be an extreme case of cherry picking commodities.
- shingen 15y ago
  The Fed CPI excludes food and energy. So when milk goes from $1.50 to $3.60 per gallon over 20 years, they pretend that never happened. Or when gasoline goes from $0.75 to $3.59 over 30 years, they pretend that never happened. They pretend you don't need to eat food or drive anywhere.
  - Aloisius 15y ago
    Uh, the Fed CPI does include food and energy prices. The government does have a separate "core" inflation number which excludes food and energy prices, but the regular CPI number includes food and energy and has forever. Specifically, the CPI-U includes food & energy, but economic analysts and policymakers like to use the CPI-U for All Items Less Food and Energy because of the volatility of commodities. The CPI-U however is still available and was last sitting at 3% for 2011. Again, that's with food & energy. http://www.bls.gov/news.release/cpi.nr0.htm http://www.bls.gov/news.release/cpi.nr0.htm Not only that, but the numbers that exclude food and energy make inflation look higher than when they are included.