9-7-26 Is CPI Getting It Wrong - The Oliver Rust Interview

0:00And now for something completely different. Forget everything you've been told by others before. I think the measurement tool that exists today for the BRCPR measurement is outdated. It is not modernized and it doesn't reflect what consumers are experiencing. Get ready for the real deal. You've got to cross correlate data sets, right? You don't have to believe in the trueflation, physical number. The full story, the whole Ancielata. But if that accurately reflects what you're experiencing, it might be a good indicator for you to review. It's money, news and information you can use to grow financially healthy, wealthy and wise. I think policy and pet decisions, I mean I can't argue what they would have done, but I would like to believe they would have done very different decisions based on the data that we have. Now, welcome in, the real deal, the real investment show with Lance Roberts presented by RIA Advisors. Good morning and welcome to the real investment show. It's another one of our continuing interview series with some of the great thinkers and individuals out in our economic environment.

1:05And today we're very happy to have Oliver Russ. He is the head of data at trueflation. You know, we talk a lot on the show about the trueflation index and it was created back in 2020. And you know, there's a lot of concerns about CPI that it's not properly representing CPI that it's manipulated. It's this, it's that, the other thing. And trueflation came along to actually solve that issue. And we talk about a lot and I thought it'd be great to have Oliver Russ on the show with us today. He's the head of data at trueflation. He leads the company's data methodology, index construction, his macroeconomic analysis as well. He held senior positions at Nielsen, Taylor Nelson, Sofrez, Tesco and Bluebell, and also served as CEO of engine insights and data. Lots of experience and a trueflation. He now oversees the frameworks used to source, validate, interpret economic data. Oliver, welcome to the show today. Thank you so much for joining us. Thanks a lot for having me.

2:05So let's just get into kind of the start of this real quick for maybe individuals that may not be that familiar with trueflation. You know, when you created trueflation, what did you believe was fundamentally wrong with the way that we were already measuring inflation? Well, I guess he could sum it up into two aspects. One is the real time element of true of the government CPI measures. And second of all is the inherent disconnect that CPI had to what consumers were actually experiencing from a price perspective. And so, you know, this is an interesting question. One of the kind of the complaints, I guess, that people have with CPI is the method by which it collects its data. How did how did how did trueflation kind of solve that by getting real time sources? Yeah, so I think if you break it down, there were three fundamental things that with the government data that we had to solve for that we wanted the soul for to create an accurate real time inflationary measure.

3:15The first one is as I alluded to is real time. So we had to look for data sources that were more temporal based and updated on a daily or at a minimum at a weekly basis. So we now have about 80 different data sources that we leverage for the US CPI. We have more for the other markets, but for the US CPI that provide us data that on a weekly or an average day. The second element is then the breadth of data, right? And this is another issue with the at least in our perspective, matruflation compared to that of the government is the number of items that they're tracking, right? And the government does a survey based approach where the either they'd run a survey out to consumers or they visit stores, but they track about 80,000 items. And for us that wasn't really enough because you're going back into the store to check on a can of Coca-Cola, you know, 330 ML can of Coca-Cola.

4:21And you want to and you're going back to that same item a week ago and the next month. And my issue with that was, well, what happens if a consumer decides to buy an alternative product, maybe they buy a Pepsi, maybe they buy a lower priced item, an own label product. Or they buy, you know, they stop buying fizzy drinks and they buy a no water, for example. All that wasn't really reflected in the CPI. So we started measuring and tracking over 15 or 16 million items now on a daily basis that allows us to track price points of goods and services. So did you all have to go out and create some of these data sources like, you know, or where these data sources already available and you just had to go find them and leverage them. Yeah, we have to go and find them. They're already out there. We have to go and find them. We have to go and gain agreements to release the data in an aggregated form. Because as I said, we take about 80 different data sources. So we're migrating all those data sources together.

5:22And then we're producing them through our own model. We then put a waiting application for each of those data sources and then put an index out in the marketplace. And how do you solve for this is real, I'm kind of a geek about this stuff. So forgive me. But how do you how do you solve for price variations in the same product across state? So for instance, in California, a can of Coke may cost more than it does in the state of Texas because of state taxes and those type of things. How do you resolve for that? So what we track is pure inflationary measures across all states across all retail outlets. So we just take grocery retailing, for example, we work with, I think it's seven different data sources at the moment that give us census level data. So we have about, I think in the food grocery food category, I think we're sitting on something like seven to eight million items that were tracking on a daily basis across the whole of the US.

6:24So yes, it does reflect what the price of a Coke is in California versus New York versus Texas versus Ohio, Iowa and so forth. And the same of course is with petrol, right? You get gas prices. It's the same situation. Gas prices vary by state. And we reflect that as well. So does that. So you know, one of this, this brings up the kind of the other question. One of the kind of complaints about CPI has always been as like, well, you know, CPI doesn't really measure the difference of inflation between states. So for instance, the cost of pet of gas, what we call gasoline, you call petrol in Texas is much lower than California, the cost of housing in Texas is lower than than California. And I'm just using broad categories. But does this does, does trueflation the way y'all calculate it? Does it do a better job of smoothing those disparities between the states on overall inflation levels? One other words, is it does an individual in California, see trueflation at the same level psychologically speaking as I would in Texas because of the way y'all measure the data.

7:33Yeah, so let me first thought of this the way the the current, the two government measures that come out there, one is, of course, is the main consumer price index, which is from the Bureau of Labor and Statistics. They take a sample of 80,000 items from a number of sampling points across the country. Now the issue with that, of course, is the number of sampling points due to budget constraints has been reducing. So the representivity, I think on a national basis would probably still be there. Would it be accurate to look at the variability? Would there be, would there be variations in that in those given the number of sampling points that going to yes, 100% at trueflation, what we do is because we're dealing with such huge volume, whether it's the housing market, whether it's pet gas prices, whether it's food, whatever category it is, we take all the volume from all the data providers that represent each of those states. And so some of them are national, some of them are not, especially, yeah, and so that gets all amalgamated. So yes, it's 100% representative.

8:39Do we provide state level information on some of the categories we do in particular like housing and particular like gas, groceries, on the more important categories we do provide it by state. So you can look into it and see what the impact is on each individual, on each individual state. Right. Well, and then that makes a lot of sense again, because what's important for us to remember is that even when there's a lot of debate about CPI and the legitimacy of CPI, the way it's calculated again, you know, all that story that comes up the media and you know, CPI doesn't reflect my living standards, right. I go to the grocery store and I buy eggs and meat and cheese and I'm paying way more than 2.6% inflation according to CPI, right. So I get those psychological arguments. And what I appreciate about trueflation is is that it does seem to provide a better relative analysis of what I'm experiencing personally versus what I've seen with CPI.

9:41So I do appreciate what's all done with this. I appreciate that and I think that it does reflect that we look at a number of individuals that come back to us with feedback. We've also validated our models with a number of educational institutions around the US and internationally. And that also adds weight, right. And we have a number of advisors on our board to give us additional feedback. And I think that's all critical in putting a product together that is measures what the consumers are experiencing. So when you start kind of building into this and again, we kind of talked, you know, you touched on it very briefly and I just mentioned housing in Texas. But for instance, if you take a look at CPI as an example and you put in homeowners equivalent rent and the other relative measures that go into the housing component, it's about 42% of the CPI calculation. So what happens in house prices and particularly the kind of more theoretical homeowners equivalent rent, which is kind of more of a guess than anything else.

10:45You know, that is a very big impact on what happens with CPI does how big of a weight is housing contributing to the trueflation index on a percentage basis. So we're significantly low when they are because if you think about it, the way we calculate owned housing or yeah, your own brown property is different to way the BLS calculates it. So let me start off with a bit about how the BLS does it. They do a rental survey every six months on a rotational basis and they look at the change of that rental prices and that over that six month period and that gives them a rent adjusted price. To calculate owner occupied rent, they model out the rental data and then adjust for that in a model in terms of, okay, you're living in this house. It's this big. It's in this location will model the it out based on the rental prices and then creates a equivalent rental if you would rent it out. Now the reality is is that you don't rent that place out and that and that is not an actual experience that you are experiencing as a consumer for that for that price of that product.

11:54You generally have a mortgage and if you had a mortgage before the pandemic, you are at the low very low single digit 30 year fixed. So the impact to you as a consumer versus taking out a mortgage now, which I think a 30 year fixed is hovering around just above 6%. You know, you have a very different impact on consumer expenditures. So we have to measure both of those scenarios out. So we look at all new mortgages issued. We look at what mortgage right there issued at. We look at the down payments being paid against them on an aggregate level. So we don't hold any personal identifiable data. We just look at the aggregated data sets by state and then roll that on. So you know, that's you know, that's very interesting. You know, because when you know, you're looking at housing as an example with with CPI. You go take a look at say redfin or zillow or some of the other sites that post, you know, rental data and they're vastly different.

12:55Right. I mean, you take a look at rental rates, you know, through redfin or zillow or whatever. They're basically flat to negative. And yet we're still seeing this appreciation and rental price in terms of CPI. So you chuckled. Why did you chuckle on that statement? Yeah, the two things for us. There are three things or two things that we really care about here. One is when you do a rental agreement. Nowadays, there's a lot more concessions being offered, right? So you get a longer period of rental. You might get three months of free, whatever it might be. And that's not being accounted for in the BLS numbers because they're looking just at the survey what you pay today versus what you pay the year ago. Right. The other drawback is and we've had to adjust for this over the time is, you know, people like redfin or zillow or core logic or whoever else. They look at generally new rentals, right? So they're not looking at renewals. So we then have to adjust our model just on the rental market alone for just renewals because a renewal price is different to a new rental price.

13:59And so that's what we've had to reflect. And we've been working with Penn State to get that to get to work with that and get that measurement done as well. So we have a pretty comprehensive measure on on rented housing and owned housing. It gives us pretty a lot of confidence in where it's going. But the big question much more in the rental market. Yes, is the quality of the measurement itself, but also what's happening with supply, right? The lack of mobility that's happening in the US at the moment because of the mortgage rates because people are not buying into new homes. The lack of owned inventories is low. It's been historic lows. So that's all fueling these prices. But the BLS has one way too much of a waiting accounting for this. And our view, and this is not what we experience or consumers are telling us what they are accounting for in terms of their cost of living for shelter or housing. And then second of all, it's the methodology in which they track it. So that brings up a great point. So when you look at trueflation, look at the housing component of trueflation. What are you seeing there in terms of inflation?

15:05Are you seeing inflation rising in that measure or is it declining? Yeah, we saw it declining up until actually last month, actually. We generally saw it coming down rentals were coming down because of concessions. There was a bit of a flurry of movement or properties of the of for the owned property because there was a flux of inventory coming into the market. That supply now has evaporated. Given the interest levels are still elevated. People are being less cautious about moving. And so therefore we're now just as last month, we're seeing a increase in the property market a bit not dramatically and very minor. But I'd say it's pretty it's leveled out now is what I would describe it as. But again, of course, the key concern is how does that progress going forward and a housing as a long term trend of the last. And there's three years has been a deflationary factor on inflation and given that trueflation on average with all the correlation work we're doing we're leading the BLS by about six to eight months.

16:14It gives us a pretty good read of where the BLS is going to be going in the future and what we're seeing right now is it's leveling. But I you know if interest rates come down dramatically, you know, we're definitely going to see this disinflationary category become inflationary and the waiting that the BLS represents. It could have a quite a dramatic impact. And again, so it's a really what you're seeing right now potentially if I understood you correctly is that rates have gone up a bit which is slowing the kind of demand for buying and renting. But the supply is also contracted because if I'm if I own a home it as you said before, if I own a home at three percent. Why would I sell it here when I have to go buy a new home to live in that's going to I'm going to have to mortgage out at six and a half it does so a lot of people are as you said are getting locked into their houses is that's what is that kind of that bifurcation between those two components is what's kind of stabilizing the housing market.

17:14Yeah, 100% and I think you got the affordability question with the lack of supply the price points are too high. Then you've got the interest rates as you mentioned, affecting mortgage rates. So yeah, all those factors happen, but I would caveat that we're saying well, you got this K shaped economy in the top end. It doesn't have any impact whatsoever, but at the bottom end and the middle end, yes, it has quite a significant impact. So that mean that's there's a lot in the housing market. We could probably have a whole conversation just talking about housing because there's a lot. Look, there's still a lot of people out there saying look, we're about to have the next major housing downturn coming. It's a slow motion train wreck and it just hasn't gained steam yet. But I see a lot of indicators like you're talking about where it is slowly kind of bottoming where supply demand is coming a bit into balance. We're not seeing a lot of new home starts. We just saw the new home start data yesterday and that was below expectation. So home builders aren't building a lot of new supply.

18:14So that's keeping supply off the market. As I said, people are locked into their houses. They can't sell. That's limiting supply and interest rates are going up. So people are going well, if you want to buy a house, you're going to have to just deal with a higher rate, which is problematic to a large degree. Because if interest rates are going up, the home prices should be falling, but the supply, the supply problem is the problem. Keeping this, keeping this on affordability and check and I'm not sure how we solve that. Yeah, 100% and you've got to be mindful as well. The new homes, which the sense of your release is part of their housing data and the starts and permits and finishes. That's all for new homes, right? And if you look at the new home sales versus existing home sales, you know, the existing home sales trumps the new home sales massively. And it loads in existing homes, you know, they're not incentivized to move is what we just discussed previously because of the affordability and the and the level of 30 affix mortgage rates. So yeah, the way it's going to get solved in the long term is interest rates have to come down to the fix and 30 affix has to come down.

19:18And when that comes down, I think given the lack of mobility that we've seen across the US in the last. I said, a guess last four years, five years, I think there's a lot of pempt up demand and I think we'll see a surge in pricing data coming through. Well, here's an interesting again, I'm going to end housing with this one question just because I don't want to spend our entire 40 minutes talking just about housing on talk about the rest of the truth. But this is a big thing. I mean, right, that you brought up some some very key sensitive terms, K shaped economy, housing affordability. This is the headlines that, you know, everybody sees right now, especially the younger generation, the Gen Zs and the millennials out there, the first time home buyers, they're all they hear on the media is, well, you can't afford to buy house, right? And in a lot of places like California, you can't, you know, housing affordability is better in other states, but, you know, what they hear is they just hear this, this housing is unaffordable. I'm out of the loop. I can't get it. The boomers hold all the housing stock. They're not letting it go. They're just, they're just, you know, greedy.

20:26And so it kind of puts a mental depression on the younger generation from going out there and doing what's necessary. But here's my question. Is that interest rates for a large degree, right? Let's go back to 2007 before the financial crisis before 15 years of monetary interventions and zero interest rates by the Fed, the pandemic checks to households. You know, we're currently mortgage rates are about where normal 30 year mortgage rates were for a very long time. And then of course, we suppressed interest rates through monetary interventions. If we assume that these monetary interventions are kind of fading to the background, Kevin Morse is pretty adamant that, you know, he's going to not bail out stuff as we've seen before. We'll see what happens in a crisis. But does, you know, if rates are kind of more normal than say a 3% mortgage rate, which was always exceedingly low and kind of really abnormal. You know, I don't really see how this problem fixes itself if interest rates kind of normalize, it's a 5% to 7% on a 30 year mortgage.

21:34Yeah, I agree. I think you'll see we if I we've done some historical analysis by comparing interest rates and make and fix 30 affix with with housing activity and numbers sales items and you start to see a blip when it starts to see a jump in the numbers when interest rates come down to about just above hovering just about 5 and then he's another blip between just under 4 point around 4.2 4.3. It sees another massive jump and then under under 4 it sort of stabilizes because as you say it gets into historical norm levels. I mean, still a bit elevated but not significantly. Right. So all right. Well, look, changing gears here, but let's get into the real crux of the question. Who's right? You were CPI. That's the real question we want to get to because obviously, obviously, you know, the trueflation is a very important gauge. It is real time. And I found it very interesting. Kevin Worsh has set out to set up these five different task forces now and he's going to look at employment and monetary policy and one of those is inflation.

22:45And talking about needing, he actually, you know, said in his kind of first initial Fed meeting that they need they he realizes they need access to more real time data and to make better monetary policy decisions. And I think that's the right call and trueflation is obviously one of those real time indications. So first question is this Kevin Worsh reached out to you yet. Yeah, we're in touch with the Fed and regional feds. We've been working with them for over a year now and we've been giving feedback on two aspects. One is the measurement tool itself as well as the data input aspects, which it covers to I think of the five streams that Worsh is set up. And is his goal to basically or is the Fed is the Fed looking to maybe incorporate I don't want to say incorporate trueflation as their replacement for CPI, but it kind of incorporate the same methodology.

23:45Is that kind of the way they're headed with kind of the future measure of CPI? Yeah, I mean, we haven't got the outcomes yet, where we're not we're involved in the process in the background. We're not involved in the specific meetings that are happening. We're involved in the background with the regional and the feds regional feds and central fed. But it is directly yes, the intention is to enhance the measurement capability of the BLS and modernize it, right. I think one of the issues with inflation tracking all around the world is that it's it's suffering slight to a significant degree of legacy issues and keeping it consistent over time. And I think that has been a struggle. I think the last major change in the BLS CPI measurement was housing back in the early 80s where they took out sales price data and they created this OER. Right. I don't think there's been significant enhancement since then beyond end to reduce sampling aspects that they're dealing with now because a budget constraints and everything else.

24:50Right. So I think there is a way to I mean, we're obviously biased right. I'm very biased. Of course. And you should be. But yeah, I think that you know, the direction is based on all discussions that we hear is to put a more accurate measurement of what consumers are experiencing and looking at the data inputs. Right. I don't know how the markets can shift on a sample of 80,000 data points to provide you a CPI measure when when there are other data sets, including inflation, but there are others that have sit on a multitude of larger data points to reference to give you a more comprehensive measure. And this look, this is the same point that I have with employment data. You know, we're still using historically, you know, calling people, are you employed or not. And yet we have companies like indeed and and and pay and paychecks and ADP that have real time employment data. Why are we not using those real quick back to your point about major changes CPI during the late 1990s under President Clinton.

25:55He hired the Boscon Commission to kind of recalculate CPI. And one of those changes was hedonics, which is how to measure an item that is increased in quality either increase or decrease in quality as much as it might not move in price. Do do do how do you distinguish between changes in prices and changes in quality and some of the items that you'll track. Yes, we don't. A very specific reason, right. If a product of a quality is increased in the hisodonic adjustment predominantly affects the recategories. It affects a parallel. It affects the auto world and it affects technology. Right. And and to be honest with you, you know, having a having a airbag in your car or having a camera to be able to look through the back of your screen. All these new adjustments, you you have to reflect that in the price that a consumer is paying. And our viewpoint is a consumer is paying a price of a car today as X that same price that car a year ago word five years ago is why.

27:02And if you adjust for quality adjustments, it doesn't necessarily reflect what the consumers are experiencing. I understand why they set it up and why they did it. But it doesn't reflect what you and I as consumers are actually physically experiencing. I mean, if I go into the communications world and I look at wireless, I look at my cell phone bill, you know, I'm getting more data for less cost today than I was in the past. And I'm now got five G I got faster data more data and I'm paying less. Right. So is that a quality adjustment? Yes, because I got five G I got faster network. I got more data and I'm paying less and you have to show that to a consumer that they're actually experiencing that. And the way we do that is because we're dealing with census level data. So we're having all the data sets coming in from telecommunication providers from a parallel retailers. Right. We know what people are paying for a t shirt, whether it's got more cotton in it or less cotton in it or any other form of quality more will in it or more silken it. Whatever it is, those adjustments are reflected in the price points that they sell those out.

28:15And that's what the consumers experiencing. So that's what we post. So, you know, it's really fascinating because you know, and I probably need to apologize to my listeners, so I didn't explain what had done. It was and you did kind of bring it's one of those, it's one of those, you know, economic terms and like I have no idea what he's talking about. But you, but you summed it up well, which is, you know, a phone if you know back in the early 2000s, I had the Motorola brick phone, right, which was this cell phone that was the size of a football and it cost about $2,000. And if you wanted to call anybody on it, it was like $90 a minute to call somebody. It was just ridiculous. Today you have your cell phone, you pay a flat monthly fee for your cell phone service, you call anybody you want everywhere and minutes are unlimited and your text are unlimited. And so what we're talking about with terms of hedonics, the way that the CPI would look at that as I'm saying, hey, this is this inflationary because you're getting a better product, even though you're paying the same amount of money, you're actually getting,

29:19it actually cost you less because you're getting more bang for your buck, so to speak. And so I was generally the thesis behind the donics, but I appreciate the way y'all do it. It's a better method. Yeah, I think, you know, there's a lot to, there's the substitution effect as well. They model out substitution. And I don't know how you model out substitution. So the BLS CPI does a substitution calculation, which again, I understand. But if you're substituting that's a grocery shopping and you're going into Walmart, you're buying, you know, a, I don't know, a rib eye steak and now you're buying a fillet steak, that's a price, your price is moving. Right. And I don't know how you adjust for that. You're going down and minced meat. Okay, I'm buying this cost me less. And that's my meal replacement. And I don't know how you model that out without looking at the volume of data that is available in the marketplace. And this is one of the things that the, that the fed committee streams are looking at is looking at how do you enhance the quality of the measurement capabilities, whether it's headed head anistic adjustments, whether it's the substitution adjustments or even whether it's this owner equivalent rent adjustments.

30:30And just for our American listeners, minced meat is hamburger. So. Sorry. I followed. It's all good. I still can't get rid of my English accent. You're all good. It's all good. Well, look, I wanted to talk about one of the thing here real quick, which is the recent World Cup that we had here in the States. I'm presuming as a, as a loyal, you know, international man of mystery that you're a big soccer fan. Yep. Or I should say football. Let me be correct with you. But, you know, we just had a big surge in, I thought it was wonderful. Right. I thought, you know, I saw all these TikToks, all these videos of people from all countries around the world, you know, enjoying America and enjoying the culture and enjoying the people. I thought it was fantastic. They were spending a lot of money. Hotels, food, travel, transportation, you name it tickets to these things. Has that, has that impact shown up yet in the truth.

32:07And you can see it through hotel prices. You can see it through airline ticket prices. You can see it through out of home entertainment. So, you know, I think it's, it was reflective. Are we seeing an adjustment? Yes, we are. And we already saw that to a certain degree in the back end of July, post the end of the walk up. But, you know, I think we'll probably see a bit more, but not significantly more. The more question I've got is, is the airline cost of an airline ticket and the hotel prices because now the demand is still strong. A lot of travel during the summer, summer months. And, you know, that's got, if that, if the business travel picks up again at the back end of the year, I don't see any reason why hotel prices or airline prices should come down. Interesting. So, right now, truth, relation expects inflation remain above the Fed's 2% target through the remainder of this year. I'm reading a snippet supporting a higher for longer rate environment as terrorists and sticky services inflation keep underlying price pressures elevated.

33:17What changes that? So, I mean, right now, I think there are three things that we have to be thinking about. One, of course, is the conflict in the Middle East. What does that do with gas prices? And what does that do with long term oil reserves and the consequential impact that has on logistics on jet fuel and other on transportation and so forth. That's one aspect of it. The second aspect of it is, as you already said, the cost of services, which is the bulk of what CPI contributes up to, which is bulk of its housing, but let's take housing out for the time being. All the other services elements are especially in, you know, like hotels in out of out of home dining when you're going out for a dinner or lunch. Those are heavily influenced by wages and the wage market has been leveling off. And it's still an elevated level and that's not projected to come down in the near term.

34:17At least we don't see it coming down one because the labor force participation rates are dropping. A lot of people are leaving the labor force either because of retiring, moving into the gig economy, all because of immigration policies. So we see the labor market keeping pay elevated and that will keep the cost of services elevated. And I think the final thing for us is the longer term outlook of where the impact of tariffs have, if they continue to come on on a gradual level, right. I think the one time hit that we've seen again coming up in the end of July, coming in a 10 to 12 and a half percent. I think there'll be some impact, but it will be minimal. I think now if you're going to get adjustments for import of manufacturing items from Canada, for example, up to 50 percent, that could have an impact on the cost of housing, for example. If you have other conscription impacts that say of energy like the solar panels from China and have a minimum price level set, you know, that could have a further adjustments.

35:21And then of course you got other factors like, you know, are we going to see another stimulus package, right. Is that going to feel more demand? Because the retail demand has been, you know, pretty damn strong. So you like despite these elevated prices, consumers are still spending. And you're looking at the savings rates coming down. It does give you a bit of a chill factor in your, at least in my spine, where I look at these numbers and I'm like, well, the only way inflation is going to come down is if these costs are coming down and the input costs is remaining elevated. And you look at the PPI, you look at the import prices that are coming in, you look at the producers price index, the all remaining elevated. Yeah. And, you know, I tell you, you know, I do a lot of economic research just like you do and when I'm doing analysis and building portfolios and all this stuff is up. That all this is very important. And I will tell you, the one thing that surprises me the most is how resilient the consumer has been.

36:23You know, high oil prices, you know, food costs, et cetera. And, you know, we, you know, economics 101 says high prices cure high prices because you get demand destruction. But yet they keep, they keep finding new source of revenue somewhere to keep spending. And I'm just curious how long that last. Yeah, it's the same question we got 100% agree with you and I, I wonder when, when these high prices will start to take an effect on demand. I, you know, I think the latest surge is the stimulus package. You could argue that some of the population of benefiting that are investing, they're benefiting from the stock market and their equity investments and so forth. But I think, you know, long term and overall, there's a large large number of individuals are living from paycheck to paycheck and they're still resilient as well we have seen. And I think that's a testament to the consumers finding new revenue streams, finding new income streams. And I think that in part that is also the explanation in my view as to the growth of the gig economy, right. People are taking second jobs or looking for alternative incomes.

37:38And that's fueling it. But the demand level, I was surprised no matter what the price point seems to be going up at, demand still increases. Yeah. And if we see another stimulus package, if, and it's a big if before the, before the midterms, then, you know, I think you'll start to see demand cracking if prices stay this elevated for probably till the end of the year beginning of next year. So let me, I want to wrap up with an Oliver, we're talking to Oliver Russ, he's the head of the data at trueflation and I really appreciate all your time today. It's been, it's been just really enlightening interview. I want to end, I kind of want to wrap up with one question, which is if trueflation had existed back in 2008, 2020, 2021 to the degree it is today. I mean, you, you've done such a fantastic job since I started have really developed the indicator. It's really come to its, its maturity now. It's very reliable. You know, you get a lot of traction, a lot of following behind it.

38:43You get a lot of people tapping into that data source. Had it been available in 2008, 2020, do you think that policy makers may have made different decisions? That's a crystal ball question. It is, it is totally hypothetical. And this is for you saying, this is where he's saying, yeah, of course they would because we're the best things in sliced bread. Being a biased representative. Yes. But yeah, no, I think honestly, I mean, even if I take out the biased hat, I've got with trueflation than what we do with trueflation, I honestly believe, yeah, I think the measurement tool, that exists today for the BRCPR measurement is outdated. It is not modernized and it doesn't reflect what consumers are experiencing. And I think if you can create an accurate measurement tool and you can create a reflection of what consumers are really experiencing in their price points in real time, then I think you have a measurement you get different outcomes, right?

39:47And you look at the projection abilities of trueflation, we forecast what the BLS is going to come on based on our data. We have to slow our data down. And we have over 99% accuracy rates, right? So it's insane what we can do with it. And I think policy and Fed decisions, I mean, I can't argue what they would have done, but I would like to believe they would have done very different decisions based on the data that we have. So trueflation spent their time building everything around prices and inflation. Is there any plans in the future to expand out to do real time data on, say, employment and GDP and other important economic factors? Yeah, you're getting me right on it. I've got to end with that. Yeah, so we started off with trueflation started off with inflation. Obviously, that's our core bread and butter. So to speak, we have now moved into employment. So you can see our employment data. It's not updated daily at the end. It's updated weekly. But that gives you an alternative view of the labor market.

40:50We also have moved into a economic indicator for the Fed and looking at where they should be adjusting interest rates and how that progresses based on all the economic data out there and live that live updating data. We have GDP data coming online. So all this data sets is increasing. But the main focal point for us is to get more granular, I'm more state level, more regional level and other data sets that help explain to people who need the data set of what's happening with inflation. That's fantastic. So obviously, go to the website that trueflation and you can view all the tools and data they have there. And Oliver just to kind of wrap up anything you want to say in particular. Yeah, no, I just want to say, first of all, big thanks to you, Lance, for having us on. It's been a great pleasure of being with you here. I think from a trueflation perspective, my only comment to everybody is you've got to cross correlate data sets.

41:53You don't have to believe in the trueflation physical number. But if that accurately reflects what you're experiencing, it might be a good indicator for you to review and a lot of individuals and clients and retail investors, institutional investors are utilizing our data to be able to look at where inflation is going to support either your salary growth, your wage growth, what you should be arguing for whether what you should be investing in. And how to cross balance that out. So please do come and have a look at us. If you've got any questions, please do reach out to me. I'm on trueflation.com or you can reach out to me or reach out to us on Twitter or on Telegram or on LinkedIn. Yeah, it's called X now, but I know. I don't know me to and I still call it a post. So there you go. I'm a tweet. I call it a tweet. I don't call it a post. I'm right there with you. It's never going to change. Oliver, I so appreciate your time today. Thank you so much for joining me. And that concludes our interview series with Oliver Russ today. He's the head of trueflation. Please go check out trueflation.com again. He's on, he's on X. He's on LinkedIn. So reach out to him. If you've got questions, he's more than happy to answer it. Thank you so much for joining us. And we'll see you in the next edition of the Real Investment Show. See you tomorrow.