True Inflation Rate

[2021Doctor]

The Way It Was​

Measurement of consumer inflation traditionally reflected assessing the cost of maintaining a constant standard of living, as measured by a fixed-basket of goods. Maintaining a constant standard of living, however, is a concept not popular in current economic literature, and certainly not within the thinking or the lexicon of the Bureau of Labor Statistics (BLS), the government’s statistical agency that estimates and reports on consumer inflation.

The changing costs of maintaining a constant standard of living were measured by pricing out a fixed-basket of goods and services—same components, same weighting—period after period. Whatever the percentage change was in the cost of that basket of goods, that is how much income would have to rise in order for someone to maintain a fixed- or constant-standard of living over the given period. At least it was a reasonably consistent approximation of same.

Tracking changes in the cost of a fixed-basket of goods was the approach to estimating inflation, going back to at least the 1700s,

No. 515—PUBLIC COMMENT ON INFLATION MEASUREMENT AND THE CHAINED-CPI (C-CPI)

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[Mman]

that graph is unrelated to reality no matter how much the biased source you cite would like you to believe otherwise.

If you believe it to be true, that is saying earning $150K a year right now is about the same as $20K per year in the year 2000. As someone living on $20K per year in 2000 I can assure you that is not even remotely close to being true.

 

[dhb]

Inflation is probably not 15% but nor is it 2%.

 

[BLADEMDA]

Real inflation feels like 10% despite the posted numbers. I expect the same increase next year so bump up your savings rate and realize the dollar will be worth a lot less in 20 years.

 

[BLADEMDA]

Inflation Calculator | Find US Dollar's Value From 1913-2024

Easily calculate how the buying power of the U.S. dollar has changed from 1913 to 2024. Get inflation rates and U.S. inflation news.

www.usinflationcalculator.com

Over 20 years the purchasing power of the USA Dollar was cut in half. That means what cost $50 in 1991 now costs $100. So, that magic number for retirement is now what you think it is based on 2021 dollars. That $5 million dollar figure should be doubled to $10 million for those seeking to retire in 20 years. For those 30 years out the number could be $15 million.

 

[BLADEMDA]

Inflation Calculator - Save Enough to Account for Inflation

Please use the calculator above to figure out your REAL retirement number. I recommend you use an inflation rate of 4% or even 5% because we are entering an inflationary period just like the 1970s (but not as bad).

I urge all of you to realize inflation will eat into your purchasing power as the US govt. lies about the inflation rate so your standard of living gets reduced.
The govt. has every incentive to list the inflation rate at 3% when it is really 5%.

 

[BLADEMDA]

Purchasing Power Calculator - See How Inflation Erodes Your Purchasing Power​

Prices have a way of increasing from year to year, so most of the goods and services that we buy tend to cost more next year than it does now. Over enough years, even small annual price increases add up to cause many goods and services to become more expensive. For instance, everyone knows that a gallon of milk costs much more today than it did a few years ago.

Another way to look at increasing prices (called inflation) is that the purchasing power of your dollar decreases with time. For example, in 1950 one dollar bought a more than its does today - a candy bar used to cost a nickel.

The Purchasing Power Calculator lets you see how inflation affects the purchasing power of your money. Here is an example. Suppose that in 2007 you made a $200,000 salary and in 1970 you made $50,000. Which salary gave you more purchasing power?

Purchasing Power Calculator - See How Inflation Erodes Your Purchasing Power

 

[BLADEMDA]

 

[BLADEMDA]

Even the very LIBERAL, PROGRESSIVE NY TIMES agrees inflation is running hot at 3%. Investors are waking up to the fact Inflation is a real issue for the next 3-5 years. IMHO, the real inflation rate will be 4-5% or higher for 2022 and likely 2023.

The Bond Market Says Inflation Will Last. You Should Be Listening. (Published 2021)

Inflation is as much a psychological process as an economic one. And a key indicator of inflation expectations has risen in recent days, which could ultimately lead to higher interest rates.

www.nytimes.com

 

[BLADEMDA]

This is from CNBC (not FOX NEWS):

Inflation has taken away all the wage gains for workers and then some

What looked like a big jump in workers' wages during October turned into just another gut punch after accounting for inflation.

www.cnbc.com

KEY POINTS

• Real average hourly earnings when accounting for inflation, actually decreased 0.5% for the month. A 0.9% inflation increase negated a 0.4% rise in wages.
• Consumer confidence has been sliding despite the rising wages, which are up nearly 5% nominally year over year but have declined 1.2% in real terms.
• The Fed finds itself under increasing pressure to adjust policy accordingly

 

[narcotics999]

Medicare plan B premium will increase by 14.5%, so does the deductible.

Life will be harder for folks living on fixed income.

US announces big hike in Medicare premiums | CNN

The federal government announced a large hike in Medicare premiums Friday night, blaming the pandemic but also what it called uncertainty over how much it may have to be forced to pay for a pricey and controversial new Alzheimer's drug.

www.cnn.com

 

[deleted126335]

This is from CNBC (not FOX NEWS):

Inflation has taken away all the wage gains for workers and then some

What looked like a big jump in workers' wages during October turned into just another gut punch after accounting for inflation.

www.cnbc.com

KEY POINTS

• Real average hourly earnings when accounting for inflation, actually decreased 0.5% for the month. A 0.9% inflation increase negated a 0.4% rise in wages.
• Consumer confidence has been sliding despite the rising wages, which are up nearly 5% nominally year over year but have declined 1.2% in real terms.
• The Fed finds itself under increasing pressure to adjust policy accordingly

The Fed is kinda stuck. Economic growth is slowing. Inflation is rising. Tightening will put downward pressure on economic growth and likely hurt highly valued and highly leveraged financial and real estate assets. The latter is likely to put further pressure on economic growth

 

[coffeebythelake]

Inflation Calculator | Find US Dollar's Value From 1913-2024

Easily calculate how the buying power of the U.S. dollar has changed from 1913 to 2024. Get inflation rates and U.S. inflation news.

www.usinflationcalculator.com

Over 20 years the purchasing power of the USA Dollar was cut in half. That means what cost $50 in 1991 now costs $100. So, that magic number for retirement is now what you think it is based on 2021 dollars. That $5 million dollar figure should be doubled to $10 million for those seeking to retire in 20 years. For those 30 years out the number could be $15 million.

1991 to now? Thats 30 years bud

 

[narcotics999]

The Fed is kinda stuck. Economic growth is slowing. Inflation is rising. Tightening will put downward pressure on economic growth and likely hurt highly valued and highly leveraged financial and real estate assets. The latter is likely to put further pressure on economic growth

The economy is on opiates. Detoxification is painful, often unsuccessful. Cold Turkey, methadone, or ultimate overdose, pick your poison.

 

[pgg]

that graph is unrelated to reality no matter how much the biased source you cite would like you to believe otherwise.

If you believe it to be true, that is saying earning $150K a year right now is about the same as $20K per year in the year 2000. As someone living on $20K per year in 2000 I can assure you that is not even remotely close to being true.

But can't you at least admit that your one-ounce gold coins bought the same men's suit in 2000 as they do now, which was the same suit 100 years ago?

 

[DrZzZz]

But can't you at least admit that your one-ounce gold coins bought the same men's suit in 2000 as they do now, which was the same suit 100 years ago?

No, because they don't make 'em like they used to 😉

 

[aafisahar]

We just had a decade of basically 0% inflation and now are having inflationary issues coming off a global pandemic with seriously disrupted supply markets. This talk about 15% inflation very soundly demonstrates that we have no idea what 15% inflation looks like.

 

[BLADEMDA]

Inflation Calculator - Save Enough to Account for Inflation

If inflation runs at 3.5 percent for the next 20 years the value of the US Dollar is reduced by half. I suspect real inflation will be at least that amount on average over the next 20 years so prepare your retirement accordingly.

 

[dhb]

We just had a decade of basically 0% inflation

But somehow everything (almost) is more expensive that 10 years ago

 

[Mman]

Inflation Calculator - Save Enough to Account for Inflation

If inflation runs at 3.5 percent for the next 20 years the value of the US Dollar is reduced by half. I suspect real inflation will be at least that amount on average over the next 20 years so prepare your retirement accordingly.

I would hope anybody that is smart enough to plan for retirement was smart enough to plan for 2-3% inflation over their retirement. I mean that's been the long term expectation for a LONG time.

The historical 4% SWR for a retirement allowed for increases in withdrawal for inflation every year. 3.5% inflation over 20 years should not really change anybody's long term plans much at all.

 

[Mman]

But somehow everything (almost) is more expensive that 10 years ago

I spend less on cellphone and cable than I did 10 years ago. Bought a new car last year that was way better than what I got 10 years ago for similar price. Plane ticket prices seem to me to have been pretty stable over that time.

 

[Southpaw]

But somehow everything (almost) is more expensive that 10 years ago

Our medicare rates are the same as 10 years ago.

 

[coffeebythelake]

Our medicare rates are the same as 10 years ago.

It didn't decrease? Score

 

[GassYous]

Our medicare rates are the same as 10 years ago.

Crazy thing is that they are jacking up the rates they charge customers. So where's the money going?

 

[coffeebythelake]

Crazy thing is that they are jacking up the rates they charge customers. So where's the money going?

Someone's pocket. Some hospital CEO. Not yours or mine.

 

[dhb]

I spend less on cellphone and cable than I did 10 years ago. Bought a new car last year that was way better than what I got 10 years ago for similar price. Plane ticket prices seem to me to have been pretty stable over that time.

I did say almost...

 

[BLADEMDA]

I would hope anybody that is smart enough to plan for retirement was smart enough to plan for 2-3% inflation over their retirement. I mean that's been the long term expectation for a LONG time.

The historical 4% SWR for a retirement allowed for increases in withdrawal for inflation every year. 3.5% inflation over 20 years should not really change anybody's long term plans much at all.

I am not sure everyone's planning includes inflation in their number. Many people just assume a number like $5 million is their goal for retirement; they fail to factor in that $5 million in 2021 is like $10 million in 2041. That is very different than a withdrawal rate which only matters once you actually reach retirement.

4% SWR is too high with many experts recommending a 3-3.5% SWR.


KEY POINTS

• The 4% rule, a popular strategy to gauge withdrawals from one’s retirement portfolio, won’t work as well in coming decades due to lower projected stock and bond returns, according to a Morningstar paper published Thursday.
• The withdrawal rate should instead be 3.3%, the paper said. That can have a big financial impact on retirees.
• However, there are many caveats.

Experts say the 4% rule, a popular retirement income strategy, is outdated

Average stock and bond returns aren't expected to be as robust in coming decades, and retirees may have to reduce withdrawals from their nest eggs.

www.cnbc.com

 

[We'llBeDoneIn15Minutes]

A small handful of people on here have pointed this out for a while. The idea that printing extra money out of nothing somehow stimulates the economy is a mirage. Couple that with paying people to not work and other factor like lockdowns and you have a recipe for disaster, a slowdown in production and an increase in money.

And the administration's answer? More massive spending on nonproductive items with even larger amounts of printed money. We'll simply get more of the same. The answer isn't complicated, stop the abundance of wasteful spending, stop the abundance of handouts that keep people on their couch, and stop the FED printing of money.

 

[gasdoc77]

A small handful of people on here have pointed this out for a while. The idea that printing extra money out of nothing somehow stimulates the economy is a mirage. Couple that with paying people to not work and other factor like lockdowns and you have a recipe for disaster, a slowdown in production and an increase in money.

And the administration's answer? More massive spending on nonproductive items with even larger amounts of printed money. We'll simply get more of the same. The answer isn't complicated, stop the abundance of wasteful spending, stop the abundance of handouts that keep people on their couch, and stop the FED printing of money.

Sadly, I think the puppet masters recognize that the last vestiges of production have all but vacated our economy, leaving only consumption (and a service industry associated with). Therefore, rather than trying to stimulate production (and creating resentful constituents) they try to ignite further consumption using policies that create inflation. I see no politically tenable solution.

 

[GravelRider]

If you’re employed, seems like a good time to ask for a raise.

 

[nimbus]

Sadly, I think the puppet masters recognize that the last vestiges of production have all but vacated our economy, leaving only consumption (and a service industry associated with). Therefore, rather than trying to stimulate production (and creating resentful constituents) they try to ignite further consumption using policies that create inflation. I see no politically tenable solution.

I don’t quite understand. Without consumption there’s no point to production. In order to live on this earth, we need to consume. Our own industry, healthcare, is a service industry. We don’t produce anything. It’s still worthwhile. Where do you think we would be right now without the money printing?

 

[We'llBeDoneIn15Minutes]

I don’t quite understand. Without consumption there’s no point to production. In order to live on this earth, we need to consume. Our own industry, healthcare, is a service industry. We don’t produce anything. It’s still worthwhile. Where do you think we would be right now without the money printing?

Consumption doesn't need to be incentivized. We literally have infinite demand for unlimited toys and gizmos out there. But balance of equations tell you you have to produce what you're consuming or else you are running deficits. If you aren't producing and are just spending watered down free dollars these products then are produced elsewhere and will cost more. Just just a horrible system of decreasing producing, increasing debt, increasing inflation, and increased trade imbalance. It's hard to get people off of this free lunch so we just dig a deeper and deeper hole to avoid facing our fiscal and economic nightmare.

We have so many jobs out there unfilled that there is absolutely no reason to be expanding handout nation rather than contracting it.

 

[Mman]

I am not sure everyone's planning includes inflation in their number. Many people just assume a number like $5 million is their goal for retirement; they fail to factor in that $5 million in 2021 is like $10 million in 2041. That is very different than a withdrawal rate which only matters once you actually reach retirement.

4% SWR is too high with many experts recommending a 3-3.5% SWR.


KEY POINTS

• The 4% rule, a popular strategy to gauge withdrawals from one’s retirement portfolio, won’t work as well in coming decades due to lower projected stock and bond returns, according to a Morningstar paper published Thursday.
• The withdrawal rate should instead be 3.3%, the paper said. That can have a big financial impact on retirees.
• However, there are many caveats.

Experts say the 4% rule, a popular retirement income strategy, is outdated

Average stock and bond returns aren't expected to be as robust in coming decades, and retirees may have to reduce withdrawals from their nest eggs.

www.cnbc.com

please keep in mind I have argued for a 3% SWR on this forum for years.

And yes, any physician on this forum that is smart enough to calculate a SWR is also inherently taking inflation into account.

 

[nimbus]

If you aren't producing and are just spending watered down free dollars these products then are produced elsewhere and will cost more. Just just a horrible system of decreasing producing, increasing debt, increasing inflation, and increased trade imbalance. It's hard to get people off of this free lunch so we just dig a deeper and deeper hole to avoid facing our fiscal and economic nightmare.

We have so many jobs out there unfilled that there is absolutely no reason to be expanding handout nation rather than contracting it.

Goods will be produced elsewhere and cost less. My buddy just bought a real LG 77” OLED for under $3k. Paid for with watered down free money. Are you proposing that we make tv’s here?


We don’t want to work for slave crap wages while corporations and shareholders are banking billions. We discuss not working like a slave for “the man” on this board every day. Doctors aren’t the only ones who deserve a fair wage. The labor market is changing and the power is slowly returning to the workers. The only people getting a free lunch off the backs of others for decades has been the owner class.

Here’s another approach to cutting inflation.

Get rid of tariffs on China to help ease inflation, two dozen business groups tell Biden — CNN Business

Ahead of President Joe Biden's virtual meeting with Chinese President Xi Jinping, two dozen business groups are calling on the Biden administration to work toward removing tariffs on China to help ease historic inflation.

apple.news

 

[Stank811]

Goods will be produced elsewhere and cost less. My buddy just bought a real LG 77” OLED for under $3k. Paid for with watered down free money. Are you proposing that we make tv’s here?


We don’t want to work for slave crap wages while corporations and shareholders are banking billions. We discuss not working like a slave for “the man” on this board every day. Doctors aren’t the only ones who deserve a fair wage. The labor market is changing and the power is slowly returning to the workers. The only people getting a free lunch off the backs of others for decades has been the owner class.

Here’s another approach to cutting inflation.

Get rid of tariffs on China to help ease inflation, two dozen business groups tell Biden — CNN Business

Ahead of President Joe Biden's virtual meeting with Chinese President Xi Jinping, two dozen business groups are calling on the Biden administration to work toward removing tariffs on China to help ease historic inflation.

apple.news

So listen to the billionaire owner class on how to reduce inflation?

 

[agammaglobulin]

Put simply, inflation is when there is more demand for goods than there is supply. Currently, we are have a problem on both the supply side (supply chain issues) and demand (government is printing trillions of dollars and handouts, increasing demand). It would seem the easiest method of correcting would be to (1) reduce demand - government needs to stop printing money and stop bond buy-backs. Fed could also raise interest rates, but each 1% increase in rates is an increase of $300B in debt service obligations per year. Very unlikely Fed increases rates too much. (2) increase supply of goods - stop free handouts so people go back to work and produce something. Current policy is terrible for inflation - printing trillions and government handouts.

 

[We'llBeDoneIn15Minutes]

Goods will be produced elsewhere and cost less. My buddy just bought a real LG 77” OLED for under $3k. Paid for with watered down free money. Are you proposing that we make tv’s here?


We don’t want to work for slave crap wages while corporations and shareholders are banking billions. We discuss not working like a slave for “the man” on this board every day. Doctors aren’t the only ones who deserve a fair wage. The labor market is changing and the power is slowly returning to the workers. The only people getting a free lunch off the backs of others for decades has been the owner class.

Here’s another approach to cutting inflation.

Get rid of tariffs on China to help ease inflation, two dozen business groups tell Biden — CNN Business

Ahead of President Joe Biden's virtual meeting with Chinese President Xi Jinping, two dozen business groups are calling on the Biden administration to work toward removing tariffs on China to help ease historic inflation.

apple.news

Your missing my point. In no way an I saying do away with competitive trade. I'm saying produce SOMETHING. You're money is only as valuable as what your producing. Energy, food, goods, anything. As we produce less and less and print more and more our money is worth less and less. That's really not something that can be argued.

Yes, tariffs hurt everybody involved, but sometimes you have to slap retaliatory tariffs to get the other country to stop. I believe you can't just let them slap us with no blows in return.

 

[We'llBeDoneIn15Minutes]

We don’t want to work for slave crap wages while corporations and shareholders are banking billions. We discuss not working like a slave for “the man” on this board every day. Doctors aren’t the only ones who deserve a fair wage. The labor market is changing and the power is slowly returning to the workers. The only people getting a free lunch off the backs of others for decades has been the owner class.

The answer to that is more competition not less. Break up monopolies, properly regulate what can't be broken, many other free market options. Certainly don't simply "give power to workers" by incentivizing not working. That will never work and will always lead to what your seeing, an abundance of workers opting comfortably for the couch over going to work.

 

[We'llBeDoneIn15Minutes]

Put simply, inflation is when there is more demand for goods than there is supply. Currently, we are have a problem on both the supply side (supply chain issues) and demand (government is printing trillions of dollars and handouts, increasing demand). It would seem the easiest method of correcting would be to (1) reduce demand - government needs to stop printing money and stop bond buy-backs. Fed could also raise interest rates, but each 1% increase in rates is an increase of $300B in debt service obligations per year. Very unlikely Fed increases rates too much. (2) increase supply of goods - stop free handouts so people go back to work and produce something. Current policy is terrible for inflation - printing trillions and government handouts.

It's amazing when you remove the political agendas how easily this can be explained with basic economics and simple mathematics. Great breakdown that anyone can understand.

 

[nimbus]

The answer to that is more competition not less. Break up monopolies, properly regulate what can't be broken, many other free market options. Certainly don't simply "give power to workers" by incentivizing not working. That will never work and will always lead to what your seeing, an abundance of workers opting comfortably for the couch over going to work.

Which monopoly should we start with? All the FAANGs, UHC and USAP? Didn’t the free market recently create ALL of them? I don’t think we’ll get real change until the workers get the power and Amazon starts paying enough to feed a family. Why should anybody work for them for $15/hr? Would anybody in your family work for that? Competition for workers is a good thing. Pay low wages and you won’t get any. Fwiw my cleaning lady and gardener both get $50-60/hr and they earn it.

 

[We'llBeDoneIn15Minutes]

Which monopoly should we start with? All the FAANGs, UHC and USAP? Didn’t the free market recently create ALL of them? I don’t think we’ll get real change until the workers get the power and Amazon starts paying enough to feed a family. Why should anybody work for them for $15/hr? Would anybody in your family work for that? Competition for workers is a good thing. Pay low wages and you won’t get any. Fwiw my cleaning lady and gardener both get $50-60/hr and they earn it.

It makes absolutely no difference how the monopolies started, it's the government's job to break them up with antitrust law. That doesn't happen enough in our corrupt system, but that is the answer to monopolies, not a central planned economy or whatever you propose instead of free markets.

 

[Direct Laryngoscopy]

It makes absolutely no difference how the monopolies started, it's the government's job to break them up with antitrust law. That doesn't happen enough in our corrupt system, but that is the answer to monopolies, not a central planned economy or whatever you propose instead of free markets.

Cronyism allows for corporate welfare where failing institutions “are too big to fail” and debt (to be paid by the taxpayers) is created to prop up said failing institution. Every Bond in the world as of today is yielding negative returns. If only there was a way to hedge this failing system with a system with absolute scarcity and known inflation schedule where cronyism can’t create new units of said money…….

 

[Mman]

I'm saying produce SOMETHING. You're money is only as valuable as what your producing. Energy, food, goods, anything. As we produce less and less and print more and more our money is worth less and less. That's really not something that can be argued.

How exactly are we producing less and less?

Here is a graph of inflation adjusted (real) GDP over time. It is a continually upward moving line for decades and decades and decades with only brief interruptions.

You say your point can't be argued, but you aren't even being truthful in the things you are basing it on.

 

[We'llBeDoneIn15Minutes]

How exactly are we producing less and less?

Here is a graph of inflation adjusted (real) GDP over time. It is a continually upward moving line for decades and decades and decades with only brief interruptions.

You say your point can't be argued, but you aren't even being truthful in the things you are basing it on.

So you propose the status quo? Increase handouts keeping jobs unfilled and growing debt, and print increasing amounts of money to sustain the imbalances? And you think this will be infinitely successful? I call it kicking the can down the down. Won't end good...

But then again don't I recall you saying to look up your post in a few years from now when inflation has remained low. Come on, that didn't age very well...

 

[narcotics999]

How exactly are we producing less and less?

Here is a graph of inflation adjusted (real) GDP over time. It is a continually upward moving line for decades and decades and decades with only brief interruptions.

You say your point can't be argued, but you aren't even being truthful in the things you are basing it on.

I am curious what the graph looks like if you deduct the yearly new debt.

I am no economist. I imagine if you think USA is a company, GDP is like revenue, and deficit negative earning. If you assume the gross profit margin of Company USA is 20% when business is good (I am very generous), it takes 5$ GDP to pay back 1$ of debt.

So right now we have a debt burn of 105% GDP. How far are we behind?

 

[We'llBeDoneIn15Minutes]

I am curious what the graph looks like if you deduct the yearly new debt.

I am no economist. I imagine if you think USA is a company, GDP is like revenue, and deficit negative earning. If you assume the gross profit margin of Company USA is 20% when business is good (I am very generous), it takes 5$ GDP to pay back 1$ of debt.

So right now we have a debt burn of 105% GDP. How far are we behind?

Exactly. It's a sham.

 

[Mman]

So you propose the status quo? Increase handouts keeping jobs unfilled and growing debt, and print increasing amounts of money to sustain the imbalances? And you think this will be infinitely successful? I call it kicking the can down the down. Won't end good...

But then again don't I recall you saying to look up your post in a few years from now when inflation has remained low. Come on, that didn't age very well...

I have not said anything good about status quo. I merely suggest sticking to facts instead of sensationalism. Also I think I have been pretty dead on correct about inflation the last 10 years.

 

[Mman]

I am curious what the graph looks like if you deduct the yearly new debt.

I am no economist. I imagine if you think USA is a company, GDP is like revenue, and deficit negative earning. If you assume the gross profit margin of Company USA is 20% when business is good (I am very generous), it takes 5$ GDP to pay back 1$ of debt.

So right now we have a debt burn of 105% GDP. How far are we behind?

debt has nothing to do with GDP. I mean they are both relevant numbers, but they are measuring different things. And when it comes to debt, inflation is great because you pay back debt with less valuable dollars in the future than you borrowed it at.

Note I'm not saying you want high debt or high inflation, but at least be clear about what each mean.

 

[Mman]

So apparently the website this original thread is referring to is literally based on a math error.

Extraordinary claims require extraordinary proof. The guy behind it can't even understand simple math.

But the creator of the chart, economist and Shadowstats founder John Williams, has admitted that he doesn’t actually re-compute the inflation rate using earlier methodology. He does something much cruder: he starts with the official inflation figure and adds a fudge factor that represents his estimate of how much the official consumer price index (CPI) understates the true inflation rate.​

​

The problem is that Williams’s adjustment is way larger than it should be. The BLS has changed its methodology over the years, but all of those changes put together have probably changed the measured annual inflation rate by a fraction of a percentage point—not the 6 to 8 percentage points Williams claims​

 

[BLADEMDA]

Inflation has been very low prior to 2021 running around 2%. So, many people are not used to inflation at 6-8% like we have today. The problem is what will inflation be in 2022 and 2023? I suspect that it well level off to around 4% which is not the 2% most people are used to. 4% will be the new norm and I sure hope it stays at that level because there is real risk to many Americans that inflation could spiral up to 8-10% if we keep printing trillions of dollars.

Opinion | Money Supply, Inflation and the Two-Year Lag

An excess money problem cannot be countered quickly.

www.wsj.com