When the news media report US economic data, they typically only report the headlines. When was the last time we heard any of them spend more than a few cursory seconds (and usually no time at all) discussing how the government has fudged those statistics over the years? I have known for years that the government doctors the statistics, misleading the American people. I'm not suggesting that it is intentional, because I really don't know if it is. But whether it is intentional or not is really quite irrelevant. The fact is that it happens. As I have said several time in other posts: reasons are irrelevant. So are intentions.
I even knew how they do it, using hedonics, weightings, and substitutions. However, until now, I didn't know how much. I hadn't seen precise quantification of how much the government fudges the statistics. I ran across an interesting article that discusses the "how much". Here is an excerpt:
I even knew how they do it, using hedonics, weightings, and substitutions. However, until now, I didn't know how much. I hadn't seen precise quantification of how much the government fudges the statistics. I ran across an interesting article that discusses the "how much". Here is an excerpt:
"...from 2007 to 2008, CPI showed a 4.1% rise in the price of food. But according to the Farm Bureau, that tracks the same basket (without using substitution, weighting or hedonics), food prices actually rose 11.3%!"
What this short quote is telling us is that while the official inflation statistics released by the Bureau of Labor Statistics reports inflation of only 4.1% (which is still twice the amount the Fed is comfortable with), the true, undoctored statistics, as collected by the Farm Bureau, using historical methods, is much higher -- 11.3%! Ouch!
Perhaps this is why universally around the globe, from the Arabian Peninsula to China, all the countries that have pegged their currencies to the US Dollar, are finding that inflation is out of control. Only the U.S. continues to claim that inflation is "contained" or soon to come down.
Perhaps this is why universally around the globe, from the Arabian Peninsula to China, all the countries that have pegged their currencies to the US Dollar, are finding that inflation is out of control. Only the U.S. continues to claim that inflation is "contained" or soon to come down.
Here is the rest of the article:
Government Statistics: Perfecting the Art of Mass Deception
