Saturday, March 10, 2012

Time To Get Real About Inflation

If you have ever wondered why the the government's CPI or Consumer Price Index doesn't seem to reflect the the rising costs of everything needed to survive it's because of the way CPI calculations are made. I won't go into that because it get's a little complicated. Luckily, there's a better inflation gauge called the EPI or Everyday Price Index published by the American Institute for Economic Research. A Better Inflation Gauge Shows Why Inflation's Much Worse - DailyFinance

The EPI places the real rate of inflation at 8% or more than double the government's figure of  3.1%. Wouldn't it be nice if interest paid on savings came a little closer to matching the EPI figure?  The frugal lose 5% or more per year on the purchasing power of their nest eggs.