Just a Pint of Salt

I remember a story that my grandpa used to tell whenever we were trying to make some goodies at his house.

He would reminisce about when he was a young boy he was baking with his brother and as he read the recipe where it said to add a “pinch of salt” he misinterpreted that to say add a “pint of salt”!

Needless to say that batch of baked goods didn’t turn out too well, ha ha.

This week the Fed gave itself an “atta boy” because the Consumer Price Index came in at 4.9% which was lower than the consensus of 5%.

However, what they don’t tell you is that they move around the metrics to get them a score that will help them save face.

For example with food prices, they might have started out with the price of steak as part of food prices but then to try and keep the number to where they want it downgraded it to ground beef.

Since CPI is a group of different consumer items, they manipulate this number to their benefit deciding what ingredients to bake into their final creation.

This chart below shows the level consumer inflation would be if we used the same recipe as was done in the 1980’s.