Why do so many expert financial reporters continue to quote the Federal governments
version of inflation as under 2% when in reality it’s near 5-6% ,if everyday expenses were included in the equation? For example, after reading your version today I opened a car ad and the quoted price, on sale, for a SUV was $47000 –a recent hospital charge for a (3) minute cat scan was $11540.00. Our supplemental insurance hardly every covers the magical 20% after medicare costs are deducted.
Please explain the difference between real and imagined inflation.
Terry Says: Very good point. Reported inflation is what the government says it is — via the Consumer Price Index, Wholesale Price Index, and various permutations of those indices — such as the “CPI for Urban Consumers.”
REAL inflation is what YOU pay for things! As you have correctly pointed out, certain aspects of inflation hit various groups particularly hard. Seniors and others who purchase medical services are the prime example. But students buying “education” also face huge price inflation.
And the most “inflated” thing of all is the stock market! The prices of stocks have more than doubled! (That’s where most of the new money being created is going — not into growing businesses and creating jobs.)
Keeping the “inflation numbers” low benefits the government in many ways — especially things like the Social Security cost-of-living annual increases (COLAs). And with low reported inflation — and some help from the Fed — the government can borrow at low interest rates, saving billions in interest.
Remember the old story of “the emperor has no clothes.” One day everyone will realize that a central bank that is printing money is sowing the seeds of inflation which we will be forced to acknowledge.