CPI Index

[teamtumbleweed]

these cpi reports done by the government are so biased and unfairly reported!

[charronfamilyconnect]

I wonder if we do this in Canada as well, to weight housing costs using the equivalent rent ratio as opposed to the actual mortgage payments and or asset prices of homes?

[1dducks]

CPI is BS, like most govt stats. True inflation is MUCH MUCH higher than what they report. They are trying to deny the fed printing press running non-stop by denying the true inflation numbers. They are even trying to use a new formula to calculate the CPI so they can pay less in adjusted social security payments, etc. Again the rich get richer and the poor and elderly suffer.

[Vikkhakh]

Hello sir,

I really think that you're channel is really very helpful. Can you post a video on future stocks prices and prices of precious metals compared to dollar. Most websites exaggerate too much you're views are always as neutral person.

[Rico8458]

Central Bank, Central Government, Central World Organization = Federal States of America, WTO, and UN. only way to save our nation is to repeal the laws that bind us to these negative bodies. get out of IMF, WB, UN, WTO, save our own nation first.

[badassanalyst]

Is there any cheaper datafeed for economic data than the bloomberg terminal?

[SuperBlahmaster]

The price of oil by itself isn't a big part of a person's budget, but the price DOES influence the cost of goods and services. Whenever the price goes up, food becomes more expensive, and so on.

[soutwin]

@SuperBlahmaster as the price of oil goes up it consumes moe of one

s budget ...displacing something else perhaps food

[starrychloe]

Hi Sal, what do you think of shadowstats . com?

[venttiarmas]

I think it´s naive to talk about cpi with not mentioning hedonic adjustment, substitution and stuff like that.

[anonymous915]

I think you hit the nail on the head with the "owner occupied housing." I think you're wrong about the deflation, though - where I live, houses have almost doubled in price in the last year.

[khanacademy]

Monetary inflation, by definition, is an expansion in the money supply. Price inflation (which most people care about) isn't. The term "Inflation" was first used in the monetary context, but now the term tends to refer to price inflation.

[amirakhtar]

but couldn't you make the argument, that an increase in the the money supply, may eventually lead to an increase in aggregate demand, thereby causing an increase in overall prices? Or will overall prices only increase if capacity utilization rates are high? But doesn't capacity vary over time? during times of recessions won't 'capacity' be lower than boom times?

[LiberalofLiberty]

@khanacademy What is your opinion on the substitution effect with inflation? If the price of goods go up in general, wont that increase the demand for cheaper substitutes and thus disguise the rise in prices?

[charronfamilyconnect]

@khanacademy Your saying there isn't any correlation between monetary inflation & price inflation? Are you sure about that?If the currency(not money) is being expanded(through credit expansion for example) greater than the rate of production of goods/services in the overall economy,you will get price inflation, all other things being equal.You treating monetary inflation as separate from price inflaiton.Where does the extra currency go then?A black hole perhaps? You've got explaining to do.

[gangs30]

the title of this video bugs me, it should be just CPI as that stands for consumer price index, there is no need for 'index' after CPI. its like saying ATM machine, or GPS system, or even LCD display. redundant last word.

otherwise, the content is good! keep going sal!

[schmokay]

Thanks for the video. The problem that they have with the CPI is that when the benchmarked teh CPI was regularly overstating inflation. That is a large reason for the twisting to bring the CPI more inline with reality. The pendulum has probably swung to far in the other direction.

Also, even though fuel is > 4% of household expensed it is a factor in the cost of production and distribution of all goods, that is why it has a larger impact on the CPI than its base weighting.

[mostolesdude]

Fantastic video, it makes me think of government conspiracy theories.

[hyperguy61]

Here is all you need to know about inflation. One dollar in 1913 , which is when the fed , as we know it , came to exist , is worth about .04 cents today. Thank you Sal for showing one more way the govt. lies

[Lukeeeeo]

Fruits and Vegetables 1.194

Bargain!

[HamiDjoukou]

probably full of pesticides.

[sieniawska]

great content! - it's a pitty that there is some high pitch noise in the background.

[BigBruddah101]

Isn't that all the more reason for the Fed to allow deflation now, given how much inflation we were actually suffering from over the last decade?

[hideflolife]

Sal - again, great video. These "component" definitions are distorting key statistical measures. That's why I asked you a couple of days what they meant by "discouraged workers" - from where does that derive?

hdll

[lvecsey]

A facebook app or some such could provide a viral survey that provides tons more transparency, and illuminate what is really going on out there. Why wait for the government to do it, and private investors to take advantage of what is or isn't there.

[hideflolife]

I was thinking the same thing, except, you'd have a bunch of rabid politicos spiking the data.

[Tehcarp]

A facebook could provide a very biased sample. Complete with no assurances of data integrity.

[Cagebreaker21]

this is really good, I know you've done a lot on maths but i thought it would be cool if you did a playlist on unsolved math problems and suggest some answers. this playlist on economics is brilliant

[Durchbrechen]

khanacademy is the best channel of yt

[devilmirror1]

Sai, people from Austrian school of economics state that the definition of inflation is increase in money supply. Price rising is the consequence of expanding money supply (inflation).

Since, the Fed is printing money like crazy now. What is your take on this one? True CPI that you mentioned should indicate deflation.

[Durchbrechen]

watch the previous khnacdemy's vids.

Anyway, for money supply inflation to become prices' inflation, money has to enter the system. In our current system this can happen in one way: Debt.

In our system money's created as debt. And that's the present day problem, cuz the mechanism of lending is broken after having been abused. There's a borrowing contraction so that money supply isn't entering the system anymore and it's difficult to think citizen will start borrowin as before any time soon.

[devilmirror1]

Money that was created recently is not for ordinary people but it is used to bail out big corporations such as AIG. Moreover, the expansion in money supply is planned for government spending: war, health care, road construction, and Obama's plans.

I think this is even worse. Hmm...

[Durchbrechen]

Anyway, watch Khanacademy vids about Inflation, deflation and capacity utilization.

[hideflolife]

devilmirror1, while the Fed has lent out a ton of money and increased their balance sheet, it's not clear whether the increased money supply is leaving the banks. They are holding this money, apparently for liquidity (many people claim that the banks are insolvent). So, if the money supply was entering the general economy, I would agree with you, but that's not what seems to be happening.

hdll

[justdo3043]

your awesome!

[mathteacher1729]

Comment: I find the definition of "Disposable" in the phrase "Disposable income" to be interesting.

I would not consider the money one spends on food, housing, and travel to and from work to be at all disposable.

Question: As far labeling owner-occupied housing as an investment, isn't purchasing a house, car or even a college loan an investment in growing one's equity?

Point: Thank you for your simple explanations of subtle and sometimes complex ideas. I thoroughly enjoy your videos.

[khanacademy]

I agree that the name is a little misleading. Disposable income is everything you take home (after taxes) while Discretionary income is what you have left over after you pay for food, shelter, etc.

[FortNikitaBullion]

@khanacademy I dislike these definitions further. There is no fixed amount you need to spend on food and shelter. Especially food, I literally see some people spend half their income on junk food and think there is nothing they can do for their finances because they have so little "discretionary income".

[khanacademy]

Owner-occupied housing can be an investment, but its primary purpose is shelter and to maintain a standard of living. The CPI is used to measure how much the cost of maintaining a certain standard of living changes over time so the cost of things like housing should be included (most people are buying homes to maintain their living standard; not renting them).

[themurre]

You're awesome man!

[jwh082742]

that video blew my mind.

[4rcane]

the way government calculate numbers need an overhaul to reflect reality

[Nandine2]

Can you do videos on vector algebra?

thanks!

[dabruin2]

Thanks Khan! Great video!

[bossman068410]

Good one.... Do you see the Matrix. The Federal Reserve and the Industries that grow around them are USING the Government to steal the public of wealth?