Revealing graph of changes in the C.P.I. since the inception of the Federal Reserve System here.
For more information about onebornfree, please see profile.[ i.e. click on forum name "onebornfree"].
That graph is misleading, because the CPI is biased. True inflation is much greater than the CPI.
If you use M2 as your index of inflation, then inflation is 8%-9%.
If you use reconstructed M3 as your index of inflation, than inflation is 10%-20%.
If you use gold as your index of inflation, then inflation is 20%-30%.
I have my own blog at FSK's Guide to Reality. Let me know if you like it.
fsk: That graph is misleading, because the CPI is biased. True inflation is much greater than the CPI. If you use M2 as your index of inflation, then inflation is 8%-9%. If you use reconstructed M3 as your index of inflation, than inflation is 10%-20%. If you use gold as your index of inflation, then inflation is 20%-30%.
Yes, of course the CPI is manipulated, and probably always has been, right from the start - but I'm not sure why you see this as detracting from the main point of the graph and of the article.
Surely the fact that using the governments very own figures [i.e the flawed/politically manipulated C.P.I. figures], when adjusted to reflect year 2000 $'s value , those officially manipulated figures still manage to reveal a loss of purchasing power for the US$ of the approximate magnitude of 1000% since tthe Federal Reserve System was created , only makes the case for a direct relationship between the loss of the US $'s purchasing power [i.e more or less permanent, on -going long term inflation] - and the Federal Reserve System that much stronger, no?
As far as manipulation of data goes , using other government measures like M2 or 3 would seem to me to be just as problematic as using the C.P.I. [and why not M1?] , and the price of gold was fixed by the government for a long time, making it, pretty much entirely useless for long-term historical analysis as far as I can see - I just don't see how it can be implemented at this point in time - the same goes for using M2 or 3 - although I'd certainly be interested in being proved wrong about using M2 or 3 or gold, or anything else for that matter.
For me, the CPI, flawed as it is, still seems to be the best of a bad bunch at this point in time.
February 17 - 1600 - Giordano Bruno is burnt alive by the catholic church. Aquinas : "much more reason is there for heretics, as soon as they are convicted of heresy, to be not only excommunicated but even put to death."