Sunday, October 24, 2010

Inflation?

Back to the gold question.  Is this a sign of inflation?  Let's take a look at Reuter's CRB Commodity Index.


Notice how the index spiked after 9/11.  Even if inflation doesn't show up in the official government statistics, there can be little doubt of the inflation in commodities.  Why does this not translate in higher prices as reflected by the consumer price index?  Is the CPI wrong?

The CRB index here doesn't reflect the price of finished goods, nor of certain other items that are included in the CPI.   How is the CPI calculated?  Given how much commodity prices have been rising, should the CPI be trusted as accurate and meaningful?

The charts here tell a different story on inflation and unemployment.  Should you believe these or what the government tells you?

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