Remix.run Logo
9rx 6 days ago

> I have read a few articles or blogs that make the argument that if government inflation figures in the US were calculated as they do in Europe, then our reported US inflation figures would be much higher.

Do you mean the other way around? The EU headline inflation rate doesn't include costs of owning a home like the US' does (owner's equivalent rent), which, as you might have guessed if you have ever wanted to own a home, is a component that has been quite inflationary, at least as far as recent memory goes. Or maybe those blogs were talking about some point a long time ago when that component pulled the US figures down (e.g. during the last housing crash)? What specific details did they give?

leogiertz 6 days ago | parent | next [-]

This is actually quite interesting. I ran into Stefan Ingves on the street in Stockholm, the former Governor of the Swedish Riksbank, and asked him why the Swedish inflation calculations did not include housing prices.

The short answer is that they're waiting on a harmonised EU wide system for that will include housing in some measure, but that has been taking longer than expected and they didn't want to change the system in Sweden before the new system was finished...

Quite frustrating given the massive increase in housing prices since '08. Would probably have been much lower with a higher interest rate.

FirmwareBurner 6 days ago | parent | prev [-]

Exactly. Don't know about all of Europe, but I find the way inflation is calculated in the countries i lived here as bad faith since it intentionally omits housing costs.

So just like a commenter below said, I haven't seen a single country where I spent any significant amount of time, where official inflation numbers were not seeing as a complete joke by the common folks. Everyone unanimously agreed the numbers are gamed in order to control public opinion.

I've also seen a lot of gaslighting from politicians with mental gymnastics on how the population is not poor but actually rich because "look how many (Asian made)washing machines you can buy with an average salary here today, while for previous generations this type of items was a luxury".

Yeah mate, my parent could barely afford a European made washing machine, but they could afford their own house at age 25-30, working jobs that required litte education. Must be all that avocado toast to blame.

6 days ago | parent | next [-]
[deleted]
Al-Khwarizmi 6 days ago | parent | prev [-]

Yes. I'm from Spain, and here housing rental costs are included in inflation... but they're a 4% of the index. Which is laughable, as most people are spending more like 30%-50% of their income on rent.

The rationale is that most people (read: people over 50 or 60) live in houses they own, those spend 0 on rental, so if you calculate the average expenditure on rental, it's low. And buying houses counts as an "investment" so it's not included.

So basically what you say: totally gamed.