Greetings Central PA Bitcoiners! We've got our monthly coffee meetup slated for 1pm this Sunday, Oct 26th, at Denim Coffee in Mechanicsburg. Hope to see you there! Inflation is much more present in the common lexicon than it was before the supply of US dollars increased sharply following the 2020 lockdowns. Everyone, particularly in the past five years, has been feeling the increasing cost of things they want and things they need. The average price of a new car in the US just eclipsed $50k for the first time, and the price of beef has been particularly crazy this year. Inflation as reported by the US Bureau of Labor Statistics has been in the ballpark of 3% for the past few years. If you think that prices of things you buy feel like they're increasing a lot faster than 3%, you're not alone. The CPI (Consumer Price Index) is based on a certain basket of goods, and that basket changes from year to year. For example, if ribeye steaks are an included input, and people begin buying ground beef instead of ribeyes due to increasing prices, the basket might then replace ribeyes with ground beef. In this case, the cost of items in the basket might not have changed, but the quality of what you're getting certainly has. Although Charlie Munger, Warren Buffet's right-hand man, may not have been a fan of bitcoin, he had a great quote: "show me the incentive, and I'll show you the result". There is a pretty large incentive for the powers that be to have CPI come in low. For one, social security payouts are linked to CPI: smaller CPI means smaller liabilities, and greater solvency for any CPI-linked pension system. The Chapwood Index is an alternative to government calculated inflation statistics such as the CPI. The goal is to calculate an inflation rate that is more consistent with how prices are changing on what Americans are actually spending on in the 50 largest cities. Any guess as to how those numbers compare to CPI? You guessed it...depending on the city, values over the past few years have been in the ballpark of 10-15%. Do you think that incomes also been increasing at that rate? Hope to see you at the meetup on Sunday! Central PA Bitcoiners
