You are absolutely correct re: the CPI's understatement of general price increases. The M2 money supply grew enormously from 2002 through 2006 and this inflation in the money supply did increase ALL prices not just real estate and equities.
The CPI is a contrived metric that shows whatever the Fed and the government want it to show. We all know that you cannot create money out of thin air and not cause general price increases over time.
What's Wrong with the CPI [View article]
You are absolutely correct re: the CPI's understatement of general price increases. The M2 money supply grew enormously from 2002 through 2006 and this inflation in the money supply did increase ALL prices not just real estate and equities.
The CPI is a contrived metric that shows whatever the Fed and the government want it to show. We all know that you cannot create money out of thin air and not cause general price increases over time.