Uh-oh. Someone went off the reservation.
CPI's Lie on Household Inflation Doesn't Wash: John F. Wasik
I told you so!
The reality is that we have deflation in some sectors (technology, some consumer goods) due to technological advances, manufacturing productivity, and cheap imports. These sectors are overweighted in the CPI. We have inflation in most other sectors, any sector that involves humans, land, energy, or government (food, transportation, taxes, housing, and any services that can't be outsourced to India or China). These sectors are underweighted in the CPI (and especially so in the "core CPI").
And the deflationary effect of cheap imports is now finished, thanks to Ben Bernanke murdering the dollar.
Think about it. If there's no inflation, why were families able to buy a home on one income a generation ago, while today families struggle to get by on two incomes?
Now aren't you glad you've been buying gold for the past two years?
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