Why you shouldn't use Shadowstats

Discussion in 'Economics' started by Covertibility, Apr 12, 2012.

  1. [​IMG]

    And feral children roam America.

    If ya want to know who some of the lunatics are that may (or most definitely) use shadowstats, just watch the show Doomsday Preppers on National Geographic Channel. It is remarkable these types of people exist. <strike>and ya know who they vote for</strike>
  2. Shadowstats is curve fitted stats. For example real unemployment is 16%, but we dont have numbers for real unemployment 100 years ago. Those numbers were also faked.
  3. maler


    The basket of goods defining the relevant rate of inflation is
    different for different people.
    The Shadowstats inflation is typical for an average Joe's expenses.
    In that sense your graph is more of a standard of living graph
    for the working stiff.
    Sure, if your basket of expenses is mostly interest paid on a loan
    you took in dollars to purchase a gold mine in South Africa,
    one could argue that your inflation rate is actually negative.
  4. clacy


    You have to take Shadowstats with a grain of salt. However, you probably should take the Fed's data with a grain of salt as well. Maybe the best thing to do would be to take shadowstats + Fed/2 to give you a more realistic average
  5. Or just keep a bunch of receipts over a 20 year period and create your own inflation index.

    Basically everything in this country has been politicized. It's becoming near impossible to find any objective reporting, statistics, news, etc...

    Part of the divide and conquer.
  6. piezoe


    I find the shadow stats numbers, which are calculated using the government methods of prior years, to be more accurate than the numbers the government uses now, where accuracy is defined as nearness to truth. It is absurd to report core inflation in the common media as this is a measure mainly of use to the Fed and has little relevance to everyday life. Headline inflation should be reported instead, and even that underestimate the inflation that most experience by a couple percent...
  7. I agree. The obvious reason that it's done this way is to draw attention away from the harmful side effects of targeting asset prices and stoking inflation.

    It's similar to all the worthless chatter about GDP growth when the "deflator" is a complete joke. What happens to all of that supposed "growth" when a real inflation figure is put into the equation?

    Easy answer: it disappears.
  8. piezoe


  9. +1. The govt has been changing their econ data computations for decades. Comparing current inflation measures to the 1970s or unemployment to the 1930s is worthless. And there's no doubt that the changes have largely been political:


    And yes, CPI (especially the "core" version) is a huge joke. We're supposed to ignore rising gasoline and grocery prices, but be overjoyed that flat screen TVs and DVD players are getting much cheaper--especially after crazy hedonic adjustments.

  10. MIT's Billion Price Project


    Also, one does not set monetary policy according to the wild fluctuations in food and energy prices.
    #10     Apr 14, 2012