Homer

Bill Gross: Understated Inflation Means Commodities, Emerging Markets Should Outperform

Mofares is close except the folks at BLS just use the formulas that Reagan Adm. gave them. The method for calculating inflation was changed in his first term when it was raging in double digits to protect Corporations from higher pension increases and keep SS COLA costs lower because between them and his tax cuts, the deficit was exploding. GHWBush was right - Voodoo economics were indeed implemented. Now we exclude the price of energy and food, because they decided they were not "core" to inflation. Yet every American pays these costs everyday. How can they not be germane to the rate? Its no accident that under the pre-Reagan method that the inflation rate over the last ten years would have been in the 8-10% range, and under the current method its ranged from 2-4%. Any wonder that the wealth gap has widened substantially since the 80's. A few unaccounted for points of inflation doesn't bother the rich guys much but middle class and lower class Joe keep coming up short no matter what they do.