SNIP
>Change of exchage rate is not real indicator of the inflation. In reality inflation mesures comparing how many goods in a special basket you ken buy today and year ago.

I think that is the way it used to be, but now I think that some extra logic is applied to the "basket" and to the calculations.

Some simple examples for here...
1) 7-8 years ago the the tax on cigarettes was reduced to 50% of its former to 'discourage' smuggling. For each of the next 12 months the official inflation rate was diminished significantly over the prior year period and the drop of cigarette tax was reported as a major contributor. Several months ago the same tax was increased by 25% of the former value, yet there has been no effect on inflation. Yes, they may have removed cigarettes from the basket, but there is no way to know.
2) 3-4 years ago the inflation rate went down unexpectedly significantly. When a reported investigated he was told that it was because cable television had a 3-month free trial, so that cost was $0.00 in each of the months (obviously cable TV was part of the basket)'
3) Car and property insurance rates are up by double-digits each of the last 2 years, meat is up by double digits over the last 2 years, telephone rates are up by double-digits in the last year, etc, yet the inflation rate continues to be reported at1%-2% range.
4) I am told that items in the basket no longer have to be the same from month-to-month. For example, if 2kg of "Lux" detergent costs $5.00 in the last period and was used, but this month the "Duz" detergent may be on 'special' for $3.99 so this month the "Duz" price is used. Similar for a shirt or underwear or whatever.

All in all we are being fooled by our government with this phoney "inflation rate" calculation.
Our alleged "inflation rate" has positive impact on international financing rates, exchange rates, currency stability, etc. but in fact *anything* internal that was adjusted based on inflation is being further and further marginalized. This AND actual RISING prices well beyond the inflation rate are hurting us, NOT helping us.
I would see no problem if the inflation rate reported and used was truly REALISTIC AS REGARDS THE AVERAGE PERSON. It is not, and therefore is garbage for the people.

regards


>Usually exchange rates floating depend on international trade and economic issues. They present how much is strong one economy compared with other at thit moment.
>If every year you have more than 10% inflation this frustrate citizents, but there are economies, like Israel one which work perfect with anual inflation 20-40%