Bending the Third Rail
Because We Should, We Can, We Do
Saturday, March 03, 2007
Inflated Rhetoric
What the ..... !
Bernanke also told his audience the Fed agrees with studies that say government data overstates inflation data.

"I still think that there's still some overstatement, and Federal Reserve estimates are, depending on the indicator, somewhere between half a percent and a percentage point of overstatement of the inflation rate," he said in response to questions.
This is unbelieveable. The leader of economic policy in the U.S. thinks government reports "overstate" inflation?! What planet does this guy live on? He obviously never has to rent, buy a house, pay medical premiums, fill up his limo tank, grocery shop or do any other kind of ordinary living. The British have begun to take a look at how they report inflation (similar to the U.S.) and are realizing how understated their reports are. But hey, why admit the obvious? If they admitted the reality of inflation then they'd have to do something. Tightening money is not exactly what the Republican bubble party folks would like to see, it might crimp their sector rotations that enable them to keep feeling wealthier!

I feel there's little doubt that the government tends to grossly understate inflation, and many thinkers that I've read have been able to prove it. The government reports of inflation are jokingly referred to as "Inflation ex inflation"