Thursday, September 20, 2007

Gasoline Price (Gasoline Price Adjusted)

There are some who believe that the CPI may not be entirely accurate as it relates to their own personal spending habits. I have therefore opted to provide a chart of the price of gasoline adjusted by the price of gasoline (something we can easily measure for ourselves) over the years. I must say that the chart surprises me a bit. I didn't expect it to smooth out so much.

I think we can all take a deep breath and sigh in relief. There has clearly been no inflation in the price of gasoline relative to the price of gasoline. Further, I have supplied a 6th order polynomial trend to capture every nuance of the future price of gasoline (as measured relative to the price of gasoline).

In summary, it is my belief that if you hoard one gallon of gasoline now and keep it fresh (not always easy since gasoline tends to go very bad over time), that you will have something worth one gallon of gasoline in the distant future. I think the chart backs this theory.

It is my hope that you are not into hoarding gasoline though, especially if you are my neighbor. Please, please pick something safer like canned goods (the Campbell's tomato soup sale at QFC was fast and furious this week but my girlfriend caught them restocking). I assure you that the price of canned goods (canned goods price adjusted) is extremely similar to this one.

This article was inspired by a comment left by russell120. It is his belief, if I understand it correctly, that the government would prefer to provide charts which show inflation is under control and "flat-lining". I just hope I'm not giving the government too many ideas. ;)

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