CPI as a flawed indicator of inflation

Discussion in 'Current Affairs, News and Analysis' started by jockass, May 8, 2009.

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  1. http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article6244451.ece

    Pretty good summary of why the CPI was a rubbish indicator of inflation and why it ignored the dangerous bubble growing in debt and housing. They picked the statistics that fitted the story they wanted to sell.
    Also talks about how the banks worked their way around the Basel financial accords in order to dig themselves into a hole.
    Its all so clear looking back obviously. Trouble is the aim of many people seems to be to 'recover' back to the good old days of house bubbles and debt mountains.
    Green shoots of recovery? Weeds.
  2. I hadn't seen the article, so thank you for bringing it to my attention. I am not certain that Lord Saatchi has been a vocal opponent of the CPI since its inception; in fact, I don't recall seeing him comment on it before. However, he does have a book about the disaster that he wants to sell, so he has an excuse for this article.... :twisted:

    All inflation indices are flawed because they cannot accurately represent the inflation experienced by you, me or the little old lady at the end of the street (yes, I'm writing about Dale again...). And the CPI is, in my opinion, more flawed than most.