Why Are the Inflation Numbers Fake? – FX Hedge Newsletter
Yeah, you read that right if regulation makes something more expensive, then government-paid statisticians assume the quality improved.
It s difficult to overstate how insane this is. Government mandates simultaneously made your appliances worse and more expensive, but the hedonic adjustments zeroed that out.
That s true for literally any additional costs imposed by regulation. If the government forces a manufacturer or service provider to do something, the government-paid statisticians grab their erasers and wipe that cost increase off the books.
An economist who teaches at the University of Chicago recently estimated that excessive regulation under the current administration in Washington was adding $5,000 per household, per year, in additional costs all of which is excluded from the CPI.
We re not trying to get political here; this is just an illustration of how official inflation metrics are total garbage. The median household is currently losing about 7% of its annual income to additional regulatory costs, and they re trying to tell us inflation is only 3%.
We re calling bull$#*! on that.
Yeah, hedonic adjustments are or at least contain a lot of BS. Mostly subjective for one thing. But what do you do about improved quality of goods? It’s not obvious. But the opportunities to game the system are.