Re: Fraud in the CPI


"phil scott" <phil@xxxxxxxxxxxxx> wrote in message
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On Dec 1, 4:50 am, "John Galt" <whoisjohng...@xxxxxxxxxxxxxx> wrote:
"mg" <mgkel...@xxxxxxxxx> wrote in message

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On Nov 30, 7:38 pm, phil scott <p...@xxxxxxxxxxxxx> wrote:
On Nov 30, 6:12 pm, mg <mgkel...@xxxxxxxxx> wrote:

On Nov 30, 12:47 pm, phil scott <p...@xxxxxxxxxxxxx> wrote:

FRAUD IN THE CPI and other govt measures.

US govt spins the stats to achieve ends that are decimating the US
middle class, as it collapses it own tax base and national
viability.

My comments on just part of the stat spin.

- CPI leaves out key cost factors such as fuel, food and medical
care, all into high double digit inflation as the CPI reports
just
2.3% lately... to keep social security adjustments deep into the
starvation band.

- On the opposite side of this, the GDP, gross national product
*includes the things left out of the CPI ! so that the GDP is
inflated within that context... a deliberate deception.

- tax rates are increased as people and businesses go into
progressively higher tax rate driven by hyperinflation..lied about
you
see. So that real tax rates, and living expenses are rising, as
real
income declines.... And that is being hidden from the people.

- These higher tax rates are Not deducted from either the GDP or
individual income stats, nor the nations Net domestic product. ..

- That NDP is being eaten alive by guess what? Government and
money
govt gives to corporations on many different vectors... the no bid
war
support contracts for instance.

All this distorting the picture to look rosy, when in fact the
middle
class in the US is being destroyed, and the lower classes,
starved....
Govt collapse always happens next, as it decimates its productive
base.

We, here in the USA are a nation run by criminally insane
sociopaths.

Sorry, that's just how it is... a good share of other nations see
it
that way also.. including many of our allies The worlds greatest
nation, prior to WW2, is now the worlds biggest debtor nation,
with
its mney going worthless fast, its productivity move to
china...and
its
middle class begging for mercy.

Phil Scott

Just on an intuitive basis, I would guess that the real rate of
inflation is somewhere around 7%, or higher, while the government is
reporting figures of about half that much. I think the difference
can
probably be attributed to one or both of the following causes:

it varies region to region... several white papers have it at a loos
10 to 12 pct
I imagin in some rural areas its less. In the cities more.
depending.

1. Modification of the calculation method in 1996/1997.

As a result of the "Boskin Commission" study several changes to the
CPI index were made that lowered the the CPI index. These included:

*abandon the fixed-weight formula for CPI goods

*change the weight of items in the index from arithmetic
weighting to geometric weighting

*introduce substitutions in the index

-> yes, they substuted hamburger for steak for instance.

If such is an accurate modeling of the buying behavior of the consumer,
it
is thus explained.



I think my confidence level in their calculations would be higher, if
they only allowed for upward substitutions. If they were to do that,
then they could definitely say that the calculation has not adversely
effected the quality of life. In other words, I would like the
bastards to change the system so that the base calculation is for
hamburger and then allow for steak substitutions, for instance, if the
price of hamburger goes up.

Are you sure that such is *not* adjusted for? (Obviously, the price of
steak
can never be less than the price of hamburger, but if the consumer were
to
start purchasing steak at a buck a pound after hamburger rises to 5
bucks,
????)

I'd be surprised if that was actually the case.

At any rate, if you get a bunch of economists in a room, and say
"substitution or fixed item" to them, you'll have a healthy debate until
the
end of the cocktail party. What you and phil have successfully
determined,
therefore, is that properly calculating the inflation according to a
basket
of goods is extremely complex and requires decisions to be made in the
balance of goods as determined by the algortihm, the actual sort of math
used, and what to do as the choices displayed to the consumer alter over
time.

If the equations don't accurately reflect reality, the simplest
explanation
is that the equations need revision, not that the government is heinous
or
evil.

JG





*seasonal adjustments to account for price increases that
occur
on a seasonal basis, which would smooth out the fluctuations

*Reduce prices by quality
improvementshttp://www.financialsense.com/stormwatch/2005/0624.html

2. Fraud by the Bush Administration

To be perfectly honest, I can't remember any cases where the Bush
administration has told the complete truth about anything of
importance since they took office. As a result, I don't see any
particular reason to trust them with inflation numbers.

most administrations are corrupt. Clinton has his.... Bush though
has been spectacular...he will go down in history as the most corrupt
and destructive in US history imo... clinton pushed nafta you know
and most favored nation trading status for communist china. both
disasters.

I think the price increase of commodities is one indicator that
there
is something going on that's not evident to the ordinary person.
Gold,
for instance, has gone from about $300/oz in 2000 to about $800/oz
now. Compare that to the S&P 500 index, for instance, which is at
about the same price it was in
2000.http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

One could argue that the rising price of commodities (like Gold)
don't
necessarily indicate inflation, but instead merely indicate
speculation or increased demand and I don't know how to refute that.

you do not refute it... you just notice the larger picture of oil
prices, and especially health care (15 pct/yr) then put gold in that
context... anything 'real' in contrast to fial money will go up as
they print more of paper.

remember this... any single arguement, can be defeated.. any single
example can be defeated...thats why the trasher set says 'give me ONE
example'.. what works irrefutably is the larger picture. any idiot
can see that prices have spiraled out of control.... and that the CPI
at 2.3 pct is bogus... you can then give abou 97 examples of common
goods needed to survive going up at 5x that rate...most food staples.
most rents. medical care. and shot gun shells

However, there are well-respect equity and commodity analysts and
investors who do claim that the inflation numbers are fraudulent.
Here's an excerpt from an interview with Jim Rogers, for instance:

"The government says that we don't have recession, but the way that
the government reports, as you know, they adjust for inflation. But
their inflation adjustments are fraudulent numbers and, therefore,
they say that we're not in recession. But if you use real inflation
numbers and real population numbers, the numbers would come out
recession."http://www.discursivemonologue.com/2007/09/26/transcript-jim-rogers-i...
quoted text -

thanks, superb link....there are a few hundred thousand that expose
the fraud and only bogus govt and a few clones denying it of course.

its like someones girl friend gets crabs,,,and the guy says MY GIRL
FRIEND HAS NOT GOT CRABS... then later we find he is right .,,, she
has the Honollulu yacht club, 5 claw ass nipper crabs,,,, so its not
really crabs.

(but actually... it really is crabs... so now he goes around yelling,
SHE IS NOT A HOOKER... well fine.

we know how that works.

Phil Scott

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errr John?.... on yer 'damn sure" question we are damn sure that oil
has gone from 15 ddls a barrel in 1980 to 100 dollars a barrel
currently..thats 700% percent... cpi went up 21 pct approx in the
same the same time frame.

OK.....point?>

errr John?.... on yer 'damn sure" question we are damn sure that 100
dllr food basket has gone from 100 dlls l in 1980 to 200 dollars a
currently..thats 100% percent... cpi went up 21 pct approx in the
same the same time frame.


about the same with: rents, medical costs, and gasoline.... but yes
60" plasma tee vees have gone down... ever try to eat one of those
bud?

So, your point is what? That only food and gas should be in the CPI, and
nothing else?

I suspect that you didn't complain much during the MANY years that food and
fuel prices were close to flat, lagging overall inflation by a rather
significant margin. I suspect you didn't go back and complain then that the
CPI should be altered DOWN, because the only things that really matter to
the consumer were food and fuel, and those weren't rising in price. I
suspect that it's just NOW, that these two very noticible components are
FINALLY rising in excess of inflation (or, "catching up", if you prefer),
that you've just started to complain.

There's no question that food and fuel are the two "cost of living" touch
points that affect ALL americans. But, there's something like 200 items in
that basket of goods. Healthy 20 somethings don't care about health care
inflation because they don't use it, adults don't care about housing prices
unless they happen to be out on the market, and you're right, most seniors
don't care about the dropping costs of the XBOX.

The CPI is a complex calculation that tries to assess ALL commonly used
touch points to EVERYONE to get picture of how the US econonmy is doing WRT
prices, and perhaps it's problem is that it's so broad that it doesn't
provide the information desired by any one single interest or age group.

But, reality is that the CPI does decrease when the plasmas come down, and
if you're a 30-50 something, that's VERY IMPORTANT to you. If you care to
argue that there should be a new subset of the CPI for Social Security only
which omits goods and services that seniors simply don't care about, then
I'd possibly agree, although the goverment would have a serious problem if
benefits were attached to an index that is more volatile and averaged higher
than the current CPI-W does.

So, there are plenty of reasons why the CPI (and how it weights the items in
its basket) may be unsatisfactory for a more targeted purpose like Social
Security COLAs. You can question the items in the basket, and you can
question the weightings, you can question the subsitutitons, and all sorts
of other things involved. No problem. But there is no evidence that anyone
has or is fudging the numbers for any nefarious purpose, and it's best if we
avoid accusations we can't prove simply because it makes us feel good to say
them.

JG


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