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by thorwasdfasdf
1880 days ago
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I do agree the CPI vastly undercounts inflation but we loose credibility when we through out numbers so far off from reality. 8-10% is realistic for real estate over the last year or two. But, we need to look at longer term trends to establish inflation as a huge problem. Even 4% actual inflation would be very very high, as that would be 2% per year over CPI, which would compound to 80% over the CPI in just 30 years or so. Let's take a look at some actual values:
- the big mac index shows inflation at about 4% for the last 20 years.
- Cape shiller housing index for US has been showing inflation at about 4% over the last 20 years. This is a real problem that will affect rents as well because the rent to own ratio spread can't continue to increase forever. - housing of course is now 10%+ over the last year. And yes, those quality adjustments made by the boys in the labor department are very questionable: I don't know how they sleep at night. |
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