When I was 16 years old and starting to drive my car, a gallon of regular gas where I lived was 24.9 cents. Given that, I can use the CPI Calculator to find out what I should be paying for a gallon of gas now (1965 then, 2014 now) – correct? NO! Why not? . . . → Read More: Can We Rely on the CPI Inflation Calculator?
The CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically. Sub-indexes and sub-sub-indexes are computed for different categories and sub-categories of goods and services, being combined to produce the overall index with weights reflecting their shares in the total of the consumer expenditures covered by the index. . . . → Read More: Consumer Price Index
I know this appears to be mundane and well – boring, but don’t close this page yet. Understanding these three terms will help you think about our global financial systems in a different way. Having a good grasp on the meaning of these terms will also initiate your thoughts toward your own wealth.
A . . . → Read More: Currency, Money, Commodities — What are they and why do they matter?