Financial Mathematics Text

Tuesday, August 12, 2014

O Captain! My Captain!

So August 11 was a sad day apparently; I managed to misplace my keys.

In other news, I found some of the movies you can find on Netflix and Amazon Prime starring a Mr. Robin Williams.

Monday, August 11, 2014

Inflation - Why the official numbers are wrong!

I'm certainly not the first to claim this and I won't be the last. But I think I'll say this differently than most who happen to say it.

For starters, when I refer to inflation, I'm preferring to price inflation.  Some (particularly Austrians), by inflation, mean monetary inflation so I think it's important to be clear on what's being discussed.

Many feel that the current inflation figures (whether we're talking CPI or CPI minus food and energy) understate the actual rate of inflation. Other methods are sometimes used which in many cases are not any better than the official numbers (and in many ways worse.)

Howerever, what I'd like to suggest is that Any method of coming up with an inflation number is flawed. To understand this we'll have to take a brief detour.