Owner-equivalent rent

Want to know how the Consumer Price Index is kept so ridiculously low? It’s pretty simple, thanks to Mogambo. Housing accounts for 22 percent of the CPI. Home prices are not included in the CPI, although housing rents – which have been declining thanks to historically low mortgage rates and an unusually high percentage of home ownership – are. Furthermore, the CPI assumes that everyone rents, even though 65 percent of households own their own home.

So, you see, if you simply don’t count the prices that are increasing rapidly, and you also multiply by three things which are declining in price, you can make it look as if there is only moderate price inflation of around 3 percent, even as $80 billion per month is created, borrowed and pumped into the economy. On an annual basis, that would require 9.23 percent growth of a $10.4 trillion economy just to stay even, but not even the fabulists who concocted the 8.2 percent growth claim were willing to go that far and claim that a mature economy was growing at a rate rivalling the New Asian Tigers during their explosive heyday.

I have said it before. I will say it again. GOVERNMENT STATISTICS ARE FICTION! Ideally, they would be published in the dark fantasy genre.

Vox Popoli: The Mogambo Guru for President in 2004 HQ