Don’t Believe The CPI Numbers!
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Oh, I know the fields are alive with a sound of pundits. Yep, CPI number today, up for a ride about, line them up, ex-members of the Fed, economic experts out there. Don’t believe the CPI. We have been, we’ve been an inflation nation for a long time. This overly watch CPI number
It doesn’t reflect the reality on the ground. And you and I know this. If you pay your bills, you know, I’m a pretty darn good record keeper. I have to be. Again, it’s my business. Have to keep very good records. It’s everything that we do and multiples of them. Owning a registered investment advisory and having offices all over the country. But just with…
my personal expenditures. So, you know, I did a little bit of an exercise right now talking about inflation. I went back and I took a look at, again, my health insurance costs. This is pre-Obamacare, but that’s a whole nother thing. Pre-Obamacare, I had high deductible health insurance that cost me $3,600 a year for my family of five. I had a $6,000 deductible.
Right now I’m paying $27,600 with a $15,000 deductible, $3,000 per person.
Okay, that’s some strong health insurance out there. There’s a story today, story today when it comes to inflation. It was by James McIntosh in the Wall Street Journal. And he was talking about, you know, talking about court inflation. He was talking about it in terms of how Europe measures their inflation. And if we were to actually measure inflation the way the Europeans do,
our number would be much, much lower than it actually is. You wanna just tell you how ridiculous our numbers are? We calculate, we calculate for the rental value of a home. Yeah, that doesn’t make really much sense to me. This is something that nobody really pays. Yeah.
Again, we calculate that makes up a large part of the CPI. Again, think about that. It’s an imaginary cost of what a homeowner would pay to rent their house. That’s about a third of the core US CPI. It’s known as owner’s equivalent rent or imputed rent. And again, it doesn’t…
make any sense and that would actually put the inflation rate much, much lower. And James McIntosh in his column here talks about, well, you know, this is confusing me. I don’t understand this. There’s too many different signals going on there. And I would say to James, I said, open up your eyes. Okay. All right. You came up with this number. The Europeans have got it wrong. We’ve got it wrong. The only thing…
that’s really important is, I’m sorry, it’s what we’re spending money on any given day. The things we need to survive on. That’s what’s most important to people. What are they paying at the grocery store? What are they paying for a cup of coffee? What are they paying for deodorant? What are they paying for paper? What are they paying for pens? What are they paying for internet service?
I can go on and on and on, just take a look around you, the things that we spend money on every given day. Isn’t that truly what’s important when it comes to inflation? And for years and years and years, I’ve talked about this, I’ve written about this extensively when it comes to retirement. And again, I’m gonna go back to a column I wrote back in 2016. And again, it’s 2016, we were told that there was no inflation at all back at that point in time.
And I wrote that the fable that measures inflation is known as the consumer price index. The CPI determines increases to countless benefit programs and in my opinion, the calculation is downright absurd. We’re constantly being told that there isn’t any sign of inflation, yet we look at the cost of goods and services that we utilize every day and they continue to skyrocket.
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I was right then, I’m right now. The Fed missed this completely when they said inflation was transitory. These are the things that are most important to people. And that’s what we should really count. And you can figure this out for yourself. You can, you can do this all by your lonesome. Okay, people, I know nobody likes spending more for.
a television set. And I remember last year we saw how expensive appliances got because of supply chain concerns and all of those things. The Federal Reserve can’t do anything about that. And some of the valuations that people throw in there when they talk about inflation. I thought about this. Talked to my mom, this was a couple of weeks ago, and she was commenting. She lives in a beautiful condo.
little complex that they had for years, my parents had for years down in Englewood, Florida. And I’m right there on the water, looks over the little, the Englewood Bay, it’s a nice place, little cute little place, too better. And she was talking about how some of the other condos in her complex and what they were selling for and how they were going through the roof. And I got a kick out of that, because I said to, you know, that’s all well and good. You know, I didn’t.
say this to her and she was all happy that the value is going up but that doesn’t make my mom any richer. She’s not going anywhere. Doesn’t make her any more wealthy. And again, they throw these calculations in as well. Again, people all comes down to the cost of living. Living your daily lives. Again, if I was running the show, that’s what that was all that matters.
And the things that cost us, how we live our daily lives, we need these things, stop going up, we need them to reverse, we need them to come back down. And there’s nothing that the Federal Reserve can do that can handle that. Again, this would be a winner, in my opinion, if you can actually get a candidate out there that could explain this. I mean, we should be talking about, not just,
energy, but he wants our energy costs to go down. I get that. But food, everyday items, and they’ll say, well, you know, it’s because of wage inflation. Well, no, we get wage inflation. We can deal with that. You can deal with that in other ways. I mean, you get productivity that can come into play. There’s a myriad of different things that technology will take care of that over time. But this is what we need to focus on. You want people to feel wealthier.
You know, you gotta help them out. When they go to the grocery store and they spend 80, 100 bucks and they only got four or five items in their cart and you’re telling them, yeah, inflation’s coming down, it’s in check. Inflation is out of control. It’s been out of control and nothing the Fed is doing right now is gonna help. Watchdog on wallstreet.com.
