The Optics of Inflation

Here's a chart of US Core CPI (Consumer Price Index) - excludes energy and food - going back to 1870.  Notice the relatively recent phenomenon of only positive inflation (erosion of the purchasing power of the dollar):

Here's the Core and Headline (includes energy and food) beginning 2007:

Cumulative prices indexed to 100 (1982):

The government likes to change the way it calculates inflation. CPI calculations were changed in the '80s and '90s. Here's what the core CPI looks like without the '80s and '90s changes:

While some changes to the calculation are justifiable, maybe we don't buy tape decks or CRT TVs, it sure doesn't feel like prices only increased 3% since last year.

Source: http://advisorperspectives.com/dshort/updates/Inflation-Since-1872.php
Source: http://advisorperspectives.com/dshort/updates/Inflation-X-Ray-View.php
Source: http://research.stlouisfed.org/fred2/series/CPIAUCNS?cid=9