HOW INFLATION IS MEASURED IS WRONG! | Summary and Q&A

TL;DR

Governments report lower inflation to control higher payments, affecting all aspects of life differently.

Key Insights

• 😘 Governments aim to keep reported inflation low to manage payments and debts.
• ❓ Different segments of the population experience varying impacts of inflation on their expenses.
• ☠️ Education and healthcare costs have significantly outpaced reported inflation rates.
• ❓ Housing prices vary greatly across regions, impacting individuals differently.
• ❓ The methodology of adjusting prices for technological improvements skews inflation reporting.
• 🤑 Monitoring the money supply can offer insights into potential inflation trends.
• 📼 Investing in fixed assets, commodities, and companies resistant to inflation can mitigate its effects.

Transcript

good day fellow investors now I mentioned inflation quite often because I think it's a game changer in the current financial environment higher inflation higher interest rates lower asset prices and everything would change however when we talk about inflation we have to differentiate between the inflation reported from the government which is low a... Read More

Questions & Answers

Q: Why does the government report lower inflation than the real rate?

The government aims to control higher payments, including pensions and welfare, which would increase with true inflation rates. Keeping reported inflation low helps manage these costs.

Q: How does inflation impact different age groups differently?

Younger individuals, especially renters, feel the brunt of inflation as a significant portion of their income goes towards housing costs. Retirees, on the other hand, may be less affected if they own their homes.

Q: Why does education cost significantly outpace reported inflation?

Education costs have surged over the years, far exceeding reported inflation rates. Parents saving for their children's education may face unexpected financial burdens due to this discrepancy.

Q: How does healthcare inflation differ from reported rates?

Healthcare costs have seen substantial increases per individual, far surpassing the reported inflation rates. The discrepancy arises from adjustments made for technological improvements in the healthcare sector.

Summary & Key Takeaways

• Higher real inflation impacts interest rates, asset prices, and government payments.

• Different segments experience varying impacts of inflation on costs.

• Governments manipulate inflation reporting to manage payments and debts.