Collectibles are worthless...

[Hamlet]

I'm aware that CPI isn't gospel, but it is not off by an order of magnitude over those 14 years. Even the high increase items you're mentioning didn't quadruple in price during that time. When you average them in with the stuff that has had modest increases you get something in the ballpark of CPI. Could you chose a basket of goods that gave you 80% inflation over that time rather than 38%? Probably. Could you get to 300%? Not with any reflection of reality.

 

There are a lot of ways to measure inflation, and actually the Bureau of Labor Statistics measures it a whole lot of ways. They calculate it for everyone, for workers, and for different areas of the country. If you dig into their website, it really is pretty interesting, for those who are statistically inclined.

 

Ultimately the challenge in measuring inflation is in choosing the basket of goods, and in dealing with the fact that the stuff people buy changes. If you are lower income, gasoline and food make up a bigger portion of your spending than if you are wealthy. California housing inflation is way different than Michigan housing inflation. A 2000 Honda Accord is not really the same vehicle as a 2014 Honda Accord.

 

There is no precise way to measure these things, but you can get in the ballpark, and I think the BLS does a decent job of it, at least compared to anyone else. MIT has a system they use that measures prices online (the Billion Prices Project) and they tend to match CPI pretty close. Unfortunately, they aren't transparent about what they are doing, so its just another black box on the internet, like the crazy Shadowstats guy.

 

The BLS is the only source that actually breaks out stuff in enough detail to be meaningful, as far as I've found.

 

 

 

That depends, as before, on the price of the goods being bought at the time of purchase. If my one ounce of gold buys *essentially* the same type and quality (another shortcoming of the CPI) of goods over time, then it is consistent. The dollar values then become functionally irrelevant, as we are now comparing things in the real world.

 

You're saying rent didn't jump "4 times" in 12-14 years. That's probably true, but that is just one measure The price of food is substantially higher than it was 14 years ago, as is the aforementioned price of fuel. All these things together are what determine consistency.

 

The CPI isn't useless...but its shortcomings are substantial, especially in the short term.

[AmazingSaul]

They have historical American value... Easy as that?

[jaeldubyoo]

Having read this thread, I feel ready to audit an economics class in any university and get a passing grade. And if there are any questions about gold, I will ace it.

 

But what I want to know is if collectibles are worthless like the OP said.

[thunsicker]

Having read this thread, I feel ready to audit an economics class in any university and get a passing grade. And if there are any questions about gold, I will ace it.

 

But what I want to know is if collectibles are worthless like the OP said.

 

Of course they are. I read it on the internet.

 

[Paddy_McShillihan]