Thursday, December 27, 2007

Inflation, what inflation?

Again the government says that inflation is small and manageable! Did you know that they don't include everyday items such as the price of oil and gasoline? You might ask yourself, how is this possible? We all know that from oil we get plastics that go into almost everything we use. Our cars run on gasoline and everything is delivered, from supermarkets to people by jets, using fuel. How is it that the cost of oil is not included in the inflation rate? Maybe we should be asking the question, why is it not included? One guess is that the COLA (cost of living allowance) that are part of the Social Security would drive up the cost to the government! Not an insignificant piece of change to the government.
Interestingly, to me, it does not seem to matter which political party is in power, the CPI (Consumer Price Index) that the government uses remains the same. I don't feel that the CPI really reflects the rate of inflation that we actually experience. It seems to be a way of the government to knock out spikes and try to level inflation's jumping about on a month to month or quarterly basis. It might be a way of calming the average person so as not to notice that the information that says that his/her money is worth less every year. That might be good up to a point but it does not let us tackle the problem on a personal basis. We need to fear the effects of inflation. It can ruin the best of plans in preparing for the future AND our retirement. That is what we should all be doing, preparing for the rest of our lives. Not just the worries we have of filling our automobiles gas tank or buying things for ourselves and others. That is day to day. That is short term thinking and we should be looking a lot further into the future.

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