Question by rooster: I dont understand why there is no inflation? contd?
how is it possible there is no inflation if gas prices are 3 times what they were 6 years ago – doesnt the cost of utilities,transport,packaging ,consumer goods all increase because of this .and at the same time hasnt the value of the dollar decreased on world markets by about a 1/4 of its value -but yet the fed continues to state there isnt inflation -I dont get it -why is there no inflation ? is it just because the fed says there isnt ?
the only thing I can think of that may be a factor is that the Yuan is not at its correct market value -thus keeping the consumer price index low
Best answer:
Answer by Allan
There is inflation in the US. Currently, prices are rising at about a 3 to 3.5 percent rate per year. Remember that inflation measures the rate of increase of ALL consumer goods. While some goods are increasing in price, many others are actually falling. For example, the price of computers has been falling for several years.
If you go to this site, you can see which goods increased in price, and which actually dropped from 2005 to 2006:
http://www.bls.gov/cpi/cpid06av.pdf
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1 responses to I dont understand why there is no inflation? contd?
i am guessing that you are from china (your yuan reference). the chinese goverment controls the value of the yuan, if the yuans value is adjusted according to the world currency then the market value of the yuan will decrease and things will cost more in china.
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