Earlier quoted context omitted.
That's completely wrong. Its a lost cause to try to explain economic theory on a forum but suffice to say that central banks factor completely arbitrary variables to get the number they want. http://www.bls.gov/cpi/cpihqaitem.htm >The CPI is calculated using prices for a fixed basket of goods and services through time. While the basket is periodically revised to reflect changing consumer expenditures, some items bein…
Actually, the FED targets something called the PCE price index which is an attempt at measuring price increases across all consumer spending. But those are just measuring details, if you want to you can go to economic conferences and argue the finer details of these measurements with rooms full of PhDs. The point though is that inflation targeting is about trying to keep the cycle of rising wages and rising prices go…
Quote from FED:
>The hedonic quality adjustment method removes any price differential attributed to a change in quality by adding or subtracting the estimated value of that change from the price of the old item.
What do you think "attributing a change in quality" or subtracting "estimated value" means? If you don't understand how the introduction of these arbitrary variables, invented by a politicized FED, completely nullify any informational value, nobody can explain it to you.