Question by rooster: where is the inflation?
how is it possible there is no inflation if gas prices are 3 times what they were 6 years ago and have stayed there or above that level for quite some time – 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 is the Yuan is way undervalued keeping the CPI(consumer price index) low ? or some other costs of doing business has dropped – what do you think?
Best answer:
Answer by lonely ariel
It is in people’s mind…
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2 responses to where is the inflation?
inflation is an overall increase in the overall price level. Inflation is not just some price increases. ALL prices includes wages and input prices, though oil is an input it does not drive all prices. It can affect and even cause inflation if long term oil prices stay high, but short term fluctuations will not cause inflation
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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