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Subject:  Re: On Argentina, Krugman, Mosler, and Wenzel Date:  2/7/2013  5:57 PM
Author:  whereaminow Number:  394038 of 404


Honestly, I don't know a lot about it.  Do they use weighting or just a billion different prices equally weighted?  How are subsitutions handled, if at all?  What's the usefulness of measuring a billion prices if the consumer is impacted most heavily on the prices of items they need every day (food and energy, for example).

Let's put it this way.  Before Arab Srping, an Egyptian version of the BPP would have probably shown low inflation as well (how low, I do not know, but I guarantee it woud have been lower than the 36% yoy food price increases before the revolt).  But the Egyptians didn't give a f*ck about things they didn't need.  They needed food, and the price of food was skyrocketing.

It's an econometric approach and I don't put a lot of stock in it.  If anything, it does show there's no active conspiracy to cook the books in America (though there is ample evidence of it in Argentina.)  But then again, I have never claimed a CPI conspiracy.  I have only pointed out it's flaws and lack of usefulness.  My argument is that mainstream economists are lunatics, not evil conspirators.

(Some of my trolls on this site have often accused me of being a conspiracy theorist, though each of them has only proven that's their go-to smear when you question the validity of econometrics.)

Daivd in Liberty

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