I have a theory. To best gauge the real inflation rate in America, look no further than the annual appreciation rate in existing median home prices. 2003: 7.7% 2004: 9.3% 2005: 12.4% source: NAR There is no national bubble. The market is just reflecting the true value of money.
Thats 32.3% in 3 years. Most people are going broke fast as hell then. Nah, crazy low interest rates artificially inflated home prices.
No that won't work, low inflation resulted in low interest rates which caused an buying frenzy in certain markets. It also wasn't just lower rates but an explosion in financing options, ARM's, IO loans etc. Home prices actually run counter to aggregate inflation, this is part of the reason there is no longer a home price component included in the CPI rate. Besides it would be so regional it would be of no real use.
you would be better off making a basket of prices that would include stuff like coke, movies tickets, gas, walmart most sold foods, etc. THAT would be a real consumer inflation