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Very true. But any government has a vested interest in keeping inflation
low since service increases, benefits and other areas are often tied to the
CPI or a similar measure. It seems that the method for doing this is to
average numbers over very big areas and populations. The problem with this
is that it is like a view from 40,000 ft up. At that height, it is
impossible (without special lens) to discern any detail. Most everything
looks about the same.
Seems to me that inflation numbers would be better served if they were
weighted to incorporate population density (in other words, where do most of
the people live?). If 70% of a state's population lives in a certain area,
then all pricing data for that sate should be weighed to reflect that. That
would give a much more realistic view of inflation. And there should not be
any exclusions for "volatile" components like food & energy. The US is a
mobile society, we drive and we eat. We are impacted by fluctuations in
these numbers regardless of if they are 1 month or 6 months in duration.
Of course, the probability of these changes happening is probably less than
my chances of winning the CA lottery Saturday <g>.
JW
-----Original Message-----
From: listmanager@xxxxxxxxxxxxxxx [mailto:listmanager@xxxxxxxxxxxxxxx]On
Behalf Of Gary Fritz
Sent: Thursday, September 21, 2000 9:47 AM
To: realtraders@xxxxxxxxxxxxxxx
Cc: RealTraders Discussion Group
Subject: [RT] Re: Oil inflation
> Huh ? Yes, check the dismal scientist site, prices did rise over
> 15% in California last year. Over 40% in the San Jose area. If
> that aint RAMPANT asset price inflation, I sure don't know what is.
James. Did you READ what Dennis wrote? Yes, housing inflation in
the Bay area is insane. But the Bay area is an ANOMALY. Look at the
Dismal Scientist site again and you'll see San Jose has the HIGHEST
rate of housing inflation in the country. (If I remember right,
anyway. The site seems to be down now.)
As Dennis pointed out, the AVERAGE housing inflation rate, across the
country, is closer to 3-5%. Which is NOT "RAMPANT asset price
inflation" by any stretch of the imagination.
If you have 100 people and ONE of them has a temperature of 106 degF,
do you slap all 100 of 'em into the hospital? Of course not. And if
ONE small area of the country has housing hyperinflation, should you
expect it to appear across the entire country? Of course not. Sure,
it's possible the Bay area's "fever" could spread, but that would
require fundamental changes in the economy around the country, and
even then it's hardly likely to spread in the same degree as found in
California.
If the entire country was in the 15-40% range, that would indeed be a
major problem. If isolated pockets are in the 15-40% range, that is
a problem ONLY for the people who **CHOOSE** to live there, and it
should not be a driver for national economic policy.
If you don't like the housing inflation in the Bay area, go live
somewhere else. But quit calling people stupid because they don't
think the Bay area is the only thing in the whole freakin' country.
Gary
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