hisah wrote:Wow! So more fudging of the model is required to reflect a 'true' picture, which should see the rate nosedive like in Feb 2010. Bullsh** this & wananchi protests & labour strikes say so!
Who proposed that change in the KE inflation model? Who also proposed the inflation model tweaking in several countries globally in 2009 as gubberments went on a printing spree due to GFC? 
Seems that there's an upward bias when inflation is fundamentally up. I wonder if the same would work if the NSE 20 had to be adjusted for an upward bias...
perhaps it's the previous downward inflation bias that resulted in an exaggerated upward bias. The true picture is to follow the price of basic commodities... we need a commodities index... run parallel. What's the price is sugar for the last 10 years?
The inflation model is based on accepted international global (labour) standards, but everyone has different spending patterns. We should revise our basket every 2-3 years IMHO... cos we're looking at 2005 consumptions patterns and saying that things haven't changed in six years.
The printing press is closed for now, but base effects (what gava seems keen on taking advantage of) clearly determine the direction of policy. If inflation comes down they'll print.
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden