WHEN GOVERNMENT ECONOMISTS, academics, and the talking heads on bubblevision speak of “modest price inflation,” they know full well that the effects of the quantitative easing policies that they have advocated and implemented have not been fully expressed in America’s consumer price index (CPI). Rather, the best evidence of runaway inflation can be found, among other areas, in the markets for commodities, foreign exchange, equities, bonds, farmland, real estate, and art. Savvy statisticians know this, of course, and many of them have impeached the U.S. government methodology used to compute the CPI. For example, using the methodology according to which CPI was computed in 1980, recent CPI inflation is estimated to have been close to 10 percent. Using the government’s methodology of 1990, CPI inflation for the same period is estimated to have been closer to 6 percent.
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