October 14, 2010 Leave a comment
I have to quote a couple of paragraphs from Briggs Armstrong’s post at the Mises blog:
Economists and journalists refer to the PPI without food and energy as the “core PPI” and assure the public that the core number is much more important than the overall PPI. This is true–so long as you aren’t one of those people who eats food or uses fuels to heat your home or commute.
So we are not supposed to worry about inflation because most of the inflation came from meat (5.2% last month) and gasoline (6.1 % last month)? They conveniently neglect to mention that a significant portion of household expenditures are on food and energy. They also neglect to point out that lower income households spend proportionately more of their income on food and energy than do higher income households. This means that the poor are hit the hardest by the inflation categories that “experts” tell us we should ignore.