The value of the inflation figure really depends on what you need guidance for

Sir, Stephen Cecchetti though making a good point explaining why “Core inflation is an unreliable guide” September 12, ignores the fact that depending on what you really are looking for guidance on, headline inflation might be just as off the charts. 

If we need to measure inflation for an “average” worker to make a cost of living adjustment then headline inflation could be alright but, if the inflation figure is to be used by an investor to make sure he is not losing purchasing power, then headline inflation might not mean anything at all. 

As an example let us imagine a world with just one product, a house, that can be either bought or rented. Since inflation as normally measured reflects the cost of renting houses and not their prices then, if the rent is not increased you will record zero inflation, even though the reason for it was that much savvier investors were all running to buy houses to protect their purchasing value and avoiding to rent like pest. 

When you consider that many public debt issues include inflation adjustments clauses one could be tempted to ask if the real meaning of inflation is truly transparently disclosed.