The American Institute for Economic Research (AIER), a not-for-profit research group, believes that the Consumer Price Index (CPI)—as measured by the government—does not reflect the true inflation rate in this country. The AIER believes that the true cost of living should include everyday items that consumers must spend money on, which the CPI does not fully reflect. With this theme in mind, the institute went to great lengths to create its very own Everyday Price Index, which stands in contrast to the CPI. The CPI includes many one-time big ticket item purchases in its inflation rate calculation. Computers, appliances and furniture are just some of the big purchase items that are part of the CPI. The idea behind the Everyday Price Index is that the typical American family does not plan their budget on big-ticket items like the CPI assumes. The AIER contends that the things Americans must purchase at least once a month are what affect their budget. The Everyday Price Index gives more weight in its calculation to food, gas prices, child care, prescription drugs, and Internet service than the CPI does. The CPI includes these items as well, but the CPI has less emphasis on these items, because the index makes room for the big-ticket items like furniture. Over the last 12 months from February 2011 to February 2012, the Everyday Price Index claims that the true inflation rate in America was eight percent. The CPI during this same time period claims that the inflation rate was 3.1%. The AIER claims that technology has helped bring down the prices of big-ticket items like cars and televisions. However, technology has not done much to bring down the price of bread. As such, the AIER believes that the largest inflation rate increases for the average American household, in the last 12 months, have come from fuel, food, beverages, and prescription drugs. Any index that tries to capture the true inflation rate in this country will have its shortfalls, simply because it is a very difficult task to undertake. One can debate who has the more accurate number, but I believe the better gauge of who is doing a better job is our average reader. We’ll be doing a survey amongst our Profit Confidential e-mail-only subscribers to get their thoughts on what the true inflation number might be. Our web-only readers won’t be participating in the survey, but you can certainly get in on the results! The survey results will be published in my column next Thursday, March 15. Michael’s Personal Notes : In terms of what economic growth will look like in 2012, the mainstream is sticking to the “muddling along” economic forecast theory. Just …