More CPI Thoughts

Seeing inflation only in the prices that go up

I'm likely to see rotten tomatoes thrown in my general direction, but I do tend to agree with the premise of this article and its main points. I continue to brace for the inflation that will affect my personal expenses. I track every single penny I spend and I'm just not seeing the hyperinflationary trends overall that others seem to see, at least so far.

As I recently stated in the comment section, I'm really not even seeing as much food inflation as I'd expect given oil prices at $120+. There is yet another sale at Albertsons. Buy 10 boxes of cereal for $20 and get $10 off. That's $1 a box. How can they still do that? Seriously. I'd really like to know. Granted they hope I'll buy other overpriced items while I'm there. I guess they just don't know me that well!

I also wish to point you to something I saw at The Financial Ninja.

All of Inflation's Little Parts

Check it out. Not everything is going up in price, at least not yet. I honestly believe that and have no reason to deceive. I'm actually looking for higher inflation you know.

Will this stop my hoarding tendencies and investments heavily weighted towards inflation protection though? Nope. It is not the present that concerns me. It is the future (my inflation expectations are high). I continue to brace for higher future consumer price inflation. It is my hope that it never actually arrives. We'd all be much better off.

As many others have pointed out, inflation is hitting the things we need far more than it is hitting the things we want. That is not good for the poorer among us. Further, rising real income inequality is not the sign of a country becoming more prosperous.

This topic is very important for those of us who own TIPS and I-Bonds. They only make sense if we think the CPI is reasonably accurate. I happen to think the CPI is reasonably accurate. Based on Warren Buffett's nod to TIPS in recent years, he must too. On the other hand, there are plenty of people saying overall price inflation is upwards of 10% or more though. I'm just not seeing it. Once again, at least not yet.