Hey Guys,
Hope you are all enjoying your weekend!
Well, as well as your weekend can go with all this Omicron / lockdown news flying around.
As the fear of this variant spreads faster than the variant itself, it will impact global markets. Sell the rumour they say.
But, hey ho, itβs not really in our controlβ¦
And another thing that is not really in our control is inflation. That's because the current and persistent inflation that we are seeing is because of factors like supply chain issues and poor monetary policy decisions.
However, what's even more concerning than the inflation itself is the fact that the “official” inflation that we are seeing could be severely undercounting the actual numbers.
That's because of the way in which the Consumer Price Index is calculated and maintained. The assumptions that are made. The data collection methods. The arbitrary “adjustments”. All of these are factors that have led to a systemic undercounting of the actual cost of living.
In my video today, I take you through the CPI measure. I explain how it is constructed and tracked and how the methodology over at the BLS has changed over the years.
The CPI inflation print has to be one of the most important economic numbers out there, so you can imagine that there is a lot of pressure that is brought to bear. In the video, I also explain how it has been used by politicians and the Fed.
You should also know that on the first of January, the BLS is going to make some changes to the inflation calculations. It will be damn interesting to see how the numbers look after that π§
This was a super interesting video to research and I tried to break it down as concisely as I could.
So, I hope you enjoy!
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βοΈ π Useful Links π βοΈ
James Invest Answers YouTube π https://www.youtube.com/c/InvestAnswers
John Williams Critique π http://www.shadowstats.com/article/ar…
Paper Adjusting Shelter Bias π https://papers.ssrn.com/sol3/papers.c…
Article on Chain CPI π https://www.washingtonpost.com/blogs/…
Boskin Report π https://www.ssa.gov/history/reports/b…
Greenspan Testimony π https://fraser.stlouisfed.org/files/d…
BLS Jan Change π https://www.bls.gov/cpi/notices/2021/…
Shelter Getting Wrong π https://www.bloomberg.com/news/articl…
IMF Report on Inflation π https://www.imf.org/en/Publications/W…
Inflation Expectations π https://www.wsj.com/articles/inflatio…
Fed Inflation Culprit π https://www.wsj.com/articles/the-fed-…
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π Disclaimer π
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.
