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Inflation Ex-Inflation Ex-Inflation

Posted on May 13, 2008

I stumbled across a data point yesterday that was quite fascinating: The percentage of food and health care in the Consumer Price Index. It turns out that Inflation may be even worse that I previously thought. According to Mark Faber (via Bill Fleckenstein), food and health care are significantly under-weighted in the CPI. That's based on the actual consumption of food and health care by real (as opposed to theoretically modeled) people. Faber notes that: In the U.S. counts food as only 8% of the CPI index. Whereas, it counts for about 10% in the United Kingdom, about 15% in the rest of Europ...

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