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Note that the government has huge incentives to downplay the inflation rate. Over the time period of the graph, the price of gold went up by about 100x; I would

Note that the government has huge incentives to downplay the inflation rate. Over the time period of the graph, the price of gold went up by about 100x; I would consider that a more accurate estimate of inflation than the 18x number implied by the chart. Due to the way exponentials work, you can hide a lot of inflation over 100 years by claiming the annual rate is just half a percent lower than it really is.

Lerc 1y ago
It would be worth seeing the price of a loaf of bread, a dozen eggs, and a bottle of milk. While not capturing the complexities of modern technology, they are available across the entire period and probably have a closer relationship to people's lives than the price of gold.
lesuorac 1y ago
Gold is up ~40% over the past year. Are you really going to claim inflation is up 40% over that time period? I think Gold is too susceptible to price fluctuations from speculators and that you should use Copper or something that people don't hoard to re-sell.
- verteu 1y ago
  For reference, CAGR from 1926 to today: Milk: 2.5% (*low-quality data) CPI: 2.9% Copper: 3.4% Gold: 5.2%
baron816 1y ago
Statistics like CPI really aren’t meant to be used to track inflation over many decades. It’s really only meaningful over a handful of years, and only when we’re talking about the economy as a whole (not to use it to say any individual or group is better or worse off). A dollar today can buy many things it could not buy 100 years ago. The price of gold is a completely useless measure of inflation. Governments have a long history of manipulating its price as a policy goal. Even today, governments buy and hold large quantities of gold.
throw0101c 1y ago
> Note that the government has huge incentives to downplay the inflation rate. Over the time period of the graph, the price of gold went up by about 100x; I would consider that a more accurate estimate of inflation than the 18x number implied by the chart. The CPI is one of the most studied and examined statistics that the government releases. Everyone from hyper-capitalist financial traders to leftist unions folks (because of CoL contract provisions) examine in and none of these folks who have a vested interested in calling out fraud have stepped forward. There have been numerous peer-reviewed examinations about it, including open source code: * https://en.wikipedia.org/wiki/MIT_Billion_Prices_project https://en.wikipedia.org/wiki/MIT_Billion_Prices_project There are disagreements about the "best" way to measure certain things (e.g., owner-occupied housing), but for the published methodology there is no cooking of the books that anyone without a tinfoil hat can find. A recent profile of how the BLS does things: * https://www.washingtonpost.com/opinions/interactive/2024/john-lanchester-consumer-price-index-who-is-government/ https://www.washingtonpost.com/opinions/interactive/2024/joh... * http://archive.is/https://www.washingtonpost.com/opinions/interactive/2024/john-lanchester-consumer-price-index-who-is-government/ http://archive.is/https://www.washingtonpost.com/opinions/in... (Included as a chapter in the recent Michael Lewis (of Big Short fame) book Who Is The Government?) And regarding gold specifically, there have been periods (that stretch over decade(s)) where gold has been flat, especially in inflation-adjust terms: * https://graphics.thomsonreuters.com/11/07/CMD_GLDNFLT0711_VF.html https://graphics.thomsonreuters.com/11/07/CMD_GLDNFLT0711_VF... The fact that it just happened to pop up over the last 2-3 years is recently bias. Your returns would have been highly dependent on when you got in for each (use slider): * https://www.macrotrends.net/2608/gold-price-vs-stock-market-100-year-chart https://www.macrotrends.net/2608/gold-price-vs-stock-market-...
- d_burfoot 1y ago
  Your own link, to the BPP Wiki page, says: > In 2007, the BPP initiated Inflación Verdadera, a project that provided a daily inflation gauge for Argentina, serving as an alternative to the official consumer price index which was manipulated by the government during 2007-2016

Lerc 1y ago

It would be worth seeing the price of a loaf of bread, a dozen eggs, and a bottle of milk. While not capturing the complexities of modern technology, they are available across the entire period and probably have a closer relationship to people's lives than the price of gold.

lesuorac 1y ago

Gold is up ~40% over the past year. Are you really going to claim inflation is up 40% over that time period? I think Gold is too susceptible to price fluctuations from speculators and that you should use Copper or something that people don't hoard to re-sell.

verteu 1y ago
For reference, CAGR from 1926 to today: Milk: 2.5% (*low-quality data) CPI: 2.9% Copper: 3.4% Gold: 5.2%

baron816 1y ago

Statistics like CPI really aren’t meant to be used to track inflation over many decades. It’s really only meaningful over a handful of years, and only when we’re talking about the economy as a whole (not to use it to say any individual or group is better or worse off). A dollar today can buy many things it could not buy 100 years ago. The price of gold is a completely useless measure of inflation. Governments have a long history of manipulating its price as a policy goal. Even today, governments buy and hold large quantities of gold.

throw0101c 1y ago

> Note that the government has huge incentives to downplay the inflation rate. Over the time period of the graph, the price of gold went up by about 100x; I would consider that a more accurate estimate of inflation than the 18x number implied by the chart. The CPI is one of the most studied and examined statistics that the government releases. Everyone from hyper-capitalist financial traders to leftist unions folks (because of CoL contract provisions) examine in and none of these folks who have a vested interested in calling out fraud have stepped forward. There have been numerous peer-reviewed examinations about it, including open source code: * https://en.wikipedia.org/wiki/MIT_Billion_Prices_project https://en.wikipedia.org/wiki/MIT_Billion_Prices_project There are disagreements about the "best" way to measure certain things (e.g., owner-occupied housing), but for the published methodology there is no cooking of the books that anyone without a tinfoil hat can find. A recent profile of how the BLS does things: * https://www.washingtonpost.com/opinions/interactive/2024/john-lanchester-consumer-price-index-who-is-government/ https://www.washingtonpost.com/opinions/interactive/2024/joh... * http://archive.is/https://www.washingtonpost.com/opinions/interactive/2024/john-lanchester-consumer-price-index-who-is-government/ http://archive.is/https://www.washingtonpost.com/opinions/in... (Included as a chapter in the recent Michael Lewis (of Big Short fame) book Who Is The Government?) And regarding gold specifically, there have been periods (that stretch over decade(s)) where gold has been flat, especially in inflation-adjust terms: * https://graphics.thomsonreuters.com/11/07/CMD_GLDNFLT0711_VF.html https://graphics.thomsonreuters.com/11/07/CMD_GLDNFLT0711_VF... The fact that it just happened to pop up over the last 2-3 years is recently bias. Your returns would have been highly dependent on when you got in for each (use slider): * https://www.macrotrends.net/2608/gold-price-vs-stock-market-100-year-chart https://www.macrotrends.net/2608/gold-price-vs-stock-market-...

d_burfoot 1y ago
Your own link, to the BPP Wiki page, says: > In 2007, the BPP initiated Inflación Verdadera, a project that provided a daily inflation gauge for Argentina, serving as an alternative to the official consumer price index which was manipulated by the government during 2007-2016