Archives For Inflation (CPI)

Oh goody!

MSN lists 12 things that will cost more in 2013. Some of them aren’t a big deal. Food, however, is a big deal. Their list:

• Cars

• Food

• Grain

• Health insurance premiums

• High-end TVs and home theater systems

• Computers

• Copper

• Smartphones

• Daily deals

• College tuition

• IPhone 5 accessories

• Shipping

Here are the monthly CPI changes I have going back to 1926. I’m not exactly sure where I got these numbers. I think it was the website but I’m not sure. It’s been a couple of years since I first collected these numbers and then I updated them with the CPI data from BLS.

Here they are. Just click on the graphic to download the PDF. Enjoy!

Monthly Inflation (CPI) Changes 1926 to Present

Not sure when they changed the size of the bag (I don’t buy candy very often) but if it went to 11.4 ounces from 12 ounces and the price stayed the same, that’s the same as a 5% price increase. I also think it’s funny that the bag is a lot bigger than it needs to be based on the contents inside. Just another way companies mislead customers.

I was going through my email and found a link to this interesting interview with Peter Schiff, author of one of my favorite books from last year, How an Economy Grows and Why It Crashes*. I thought this question and answer was interesting:

Question: So, with a more thoughtful and sober monetary policy from the central banks like the Fed and others, you’re suggesting that maybe oil demand wouldn’t be as high?

Schiff: Well, if you went to an auction and everybody had $100, nothing would sell for more than $100 because nobody would have more than $100. If you gave everybody $1,000 and you auctioned off the same merchandise, it would sell for more money because the people that are bidding have more money to bid.

And that’s what’s happening. All the central banks are printing money, and now that money is there, that money is chasing oil. They’re not pumping as much oil as the central banks are printing money. The supply of money is growing much faster than the supply of oil, so therefore the price of oil has to rise. That’s what’s going on.

The ironic thing about it is the Federal Reserve is likely to respond to higher oil prices by printing even more money, claiming that the higher oil prices will slow the economy. And they think that what they need to do is stimulate to offset that. And of course, by doing that, that just means oil prices will rise even faster, because then there will be even more money. The process will continue, on and on.

There’s no mention in the interview of speculation. Interesting.

*Affiliate Link

From page 10 of Jeffrey Hirsch’s Super Boom: Why the Dow Jones Will Hit 38,820 and How You Can Profit From It* comes this quote regarding inflation:

The U.S. Department of Labor’s Bureau of Labor Statistics (BLS) has tweaked and manipulated the Consumer Price Index (CPI) so many times over the past 30 years or so in an attempt to mask inflation that the indicator may very well not detect a true upsurge in inflation in the years ahead. No one is really sure how this new and improved version of the CPI will react in a hyperinflationary environment. We may see a 40 percent to 50 percent increase in the CPI—or we may see another 200 percent rise.

From page 119 comes this:

Since September 11, 2001, through the most recent November reading of the CPI, the inflation index is up a meager 23 percent. Having made numerous trips to the market and gas station over the past decade, it is simply unimaginable that prices are only up 23 percent. Energy costs have doubled, if not tripled. Medical costs have shyrocketed.

No kidding!

He goes on…

The price of an ounce of gold (in U.S. dollars) and the New York Futures Exhcange Commodity Research Bureau (NYFE CRB) Index are better indicators of the prices consumers actually pay for daily necessities.

Since 2001 gold is up 402 percent and the CRB is up 230 percent. Much of these moves could be in response to a weakening dollar. From its July 2001 peak to the November 2009 low, the U.S. Dollar Index (USDX) had shed nearly 40 percent of its purchasing power—another strong argument that inflation is much higher than the CPI calculated 23 percent.

His hedge for inflation is stocks. Not gold or silver. Stocks.

*Affiliate Link

I have been spending some time the last couple of days, looking at the CPI reports. If you’ve never looked at one of these reports, I urge you to do so. They’re pretty interesting.

I still can’t for the life of me figure out why the BLS groups Education and Communications together. Why not give them each their very own category?

I noticed that the CPI began publishing an index for college textbooks in 2003. That index has increased 62.14% since it was first published. To put that in perspective, a textbook that cost you $100 in 2003, cost you $162 in 2010.

Here are the links to PDF files for each year’s report. I put them together here because they aren’t easy to find on the BLS’s website.












I found this link on facebook the other day. Check it out: CPI Categories Since 2000. From what I can tell, they got their numbers for college tuition from the BLS like I did. I’m not sure why their numbers are so much higher than mine are.