[The once and future king]

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Hmm an alternative to the hiding hypothesis is that there has been massive inflation shown by reliable metrics.

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Oh, yes. I agree 100%. It's just that the inflation is showing up everywhere EXCEPT the CPI. I'm not saying that it is ONLY manipulation of economic data that is hiding monetary expansion.

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Look at the housing market for example. This has inflated alot in the USA (till recently). Not saying that CPI isnt fudged to a high degree, just that it isnt a case of omfg where is all the new money going why aint it showing up on the radar. It went into assets etc of which housing would be a prime example,that definitely showed up on the radar.

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Of course. This is what I've been saying all along. But that is, in fact, "hidden" from consumers, who are mainly interested in consumer prices. In fact, they think that a bubble in their stock portfolio or the value of their home is a good thing, at least until the bubble bursts.

Price inflation is also offset by productivity increases in certain sectors (see for example consumer electronics), and monetary inflation is also hidden offshore as foreign held dollar reserves, which also reduces pressure on the CPI, at least until that bubble bursts, which is now occuring.

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Im not sure but you seem to be having your cake and eating it. In that you are claiming that both Assets and the basket of stuff have both inflated massively.

I cant speak for the American consumer experience, but in Britain the housing bubble was/is even more insane than the USA with massive asset inflation, yet many of the items in the basket of stuff have become considerably cheaper.

Clothes, food and especially alcohol have become cheaper as have white goods plasma screen TVs and the like. Though much of this is changing as we speak with big spikes in the cost of food and alchohol predicted due to [censored] global harvests.

Much of this deflation has in fact been imported from China.

That said many everyday items have increased in cost, and the quoted CPI figure in Britain of 1.8% last month and 2.1% this month are laughable if one considers a realistic spectrum of stuff in the basket. Utilities are interesting with Gas and Electric both increasing well beyond 2% but the liberalization of land lines means phone calls have become a lot cheaper over the last few years. I wouldnt be surprised if my gas bill didnt go in the basket but my phone bill did.

That said I dont think we have 70s style inflation in the realistic basket of stuff, I am sure it is higher than the Gov stats but I would argue most of the inflation has gone into the rampant house bubble. Britain has about 1.4 trillion personal debt, most of that mortgage debt.