yeah! you don't know how they make your spicy chicken sandwich in 2007! your rent is 450! 7 years ago my rent was 475 for a one br and now it's 900! tuna can was 35 cents and now it's a dollar! a pound of meat was 1-2 dollars and now it's closer to 5 dollars < and that's the fatty crappy meat>!! movie ticket for 6.50!!! where do you live ? tickets went up from 6.50 to 10 bucks here in LA!! just thought i add to your figures.
Perhaps you missed cache's point that he cared about "his" inflation and not the one reported by the government or by someone who lives in Bel Air. Unfortunately, i too come in closer to your numbers which is of course the price you pay by living in a major metro area. Have you looked at how much local taxes have actually contributed to those prices? I suggest you do. It isn't all coming from the big bad fed wolf, not that i am defending it in any way. Local municipalities are plagued with debt also. My point is that you have a much better chance at getting your point across or your voice heard at the local level than crying that the fed is confiscating your wealth.
Here is what I think. Inflation is here when essential items take over a bigger portion budget of everyday consumers. Aka, it is here when the retailers suck even more air. Home Depot earning only falls ~25%, revenue only a couple % and it is in the middle of the housing sector. Then you have Wal-mark doing pretty good. I say it is not impacting everyday consumers yet.
Rallymode is right. You seem to have missed the point. I only care about the increase in goods that I buy. You can choose where you want to live. If you're dissatisfied with your local cost of living, then move. This is especially true for traders. We can live anywhere. During periods of high unemployment I can sympathize with people who can't move because they won't be able to find work. My state is at 2.5% unemployment right now, and was just named best place to find a job in 2007. You only have to make 60% as much to afford the same lifestyle here as compared to LA. My current rent is $625 for 3 bedrooms, 2 bathrooms. Unfortunately for you, LA is one of those places where RE prices got out of control along with prices of other goods. Places like my town saw a nice even rise in home prices and wages. We didn't have a bubble here. BTW Rallymode. Why do you live in Chicago? You do realize that you could be living like a king outside SLC on the money you've been pulling in lately, right?!?
Exactly. The numbers can be whatever they want but wages have completely matched increased cost of living here.
I pose the question because your answer seems intuitive. Allocation shouldn't matter. Inflation was 10% during that period. But...Prices of goods should only reflect 1% inflation, and the securities market will see a rise as 9/10 of the printed money flows to investment. Assuming that people weren't pulling from investments to pay for goods. That is what i think we are seeing right now. A large portion of money created is finding its way to securities. A smaller portion is used for consumption, which makes for lower inflation when measured by CPI. 10% more money chasing the same quantity of goods means 10% inflation. But only 1% more money chasing those goods would reflect only 1% inflation. This seems logical but I haven't thought it over enough to really make sense of it.
It depends on the asset. If the investment creates value, then the 1% expenditures on goods will naturally rise. CPI is an aggregate number with its own variance. The inflation we're seeing now is due to energy cost -- food and fuel. It appears that we are paying to save our national banking system via the federal reserve tax.