The rule of 75 is an accounting and investment tool to help estimate how long it will take for prices to double. It can be used to determine how long it will take for an investment to double if you use growth rate, and it can also be used to estimate how long it will take prices to double if you use the inflation rate.

What you end up doing, is you take the number 75, and you divide it by the growth or inflation rate. What you end up with is the number of years it should take for the prices of something to double and that growth or inflation rate.

If it were true that prices were growing at 2%, then it should take roughly 37.5 years for prices to double. This is not been what people have experienced. As I bring up specific examples, remember that to be matching inflation as it is stated, prices should have doubled within the full lifetime of an older millennial.

The largest component of most people’s budgets is going to be rents or mortgages. My first apartment in the 2000s cost me roughly $350 for a two-bedroom place. It was in an apartment building in a pretty nice area of town. Today, in the same city, you cannot rent a place for less than a thousand.

Later on, I was renting a house in the same city. This was around 2012. At that time, that house rental was costing me $785 a month. It was a decent house in a good area of town. Within a couple years, we were kicked out of that place because it was no longer economical for the landlord to be renting it, and by that point you couldn’t get a house for less than $1,200 a month.

In the city that I’m in right now, you could buy a nice house for just over $100,000 about 15 years. In fact, my father bought two. In 2015, I bought a house for roughly $220,000 and that was more or less the price of houses in that region at the time. In just those 7 years, my house is already worth $350,000.

So why didn’t inflation numbers capture these massive increases in housing costs? The reason that they didn’t is that they don’t bother checking the cost of the same place. Instead, they use tricks in order to keep the number lower. For example, they use a concept called owner equivalent rent where they ask people who don’t rent but own their home how much they would be willing to rent a house similar to what they’re living in for. Of course, this is a completely made up number.

Now housing in my region is an unusual example, but it’s by far not the only one.

Some bills have massive inflated. High speed internet in my region was $37.50/mo in 2007, but is almost $100/mo today. That’s almost 300% in 16 years.

Electricity has doubled since 2007. So has water.

In 1995 gasoline was 60 cents per liter. In 2005 it hit a dollar for the first time. Last year, it hit two dollars for the first time.

Beef has gone up 300% since 2013. Now this goes to another way that they game the system with respect to inflation. Let’s say that beef doubles and you can’t afford beef anymore, so you start to eat chicken. Well if chicken happens to be the same cost as beef, then they call that substitution and it is considered to cost the same because your cost of living hasn’t increased. And then you move from chicken to organ meats, and it costs the same then inflation still hasn’t increased for them, even though actual cost of living has gotten much worse and the only reason it doesn’t look like that is that you are cutting corners to deal with it. Your quality of life is going down because the cost of living is going up. This is called substitution.

Bread prices have easily doubled. If you went back to 2007 and told people that a normal loaf of bread would cost almost $5, they’d look at you funny.

When I first started using netflix, the service cost about $7 a month. Today, the same service costs $20 a month. In addition, back when I first started using Netflix it was a service with all of the TV shows I wanted to watch. Today, I’ve got four streaming services to try to get all of my TV shows because the company smelled blood in the water and decided to stop licensing their properties to Netflix and open their own.

Netflix speaks to one of the one-way valves that Central Bank economists use to make inflation numbers look better than they are. In the 2000s, a very good GPU would cost about $400. Today, a very good GPU costs $1,500. iPhones used to be considered fairly expensive at say $400, now the top of the line iPhones are over a thousand. The thing is, the economists who are not paying attention to the fact that things are getting worse price in the fact that your GPU and your iPhone are better than the ones that you would have gotten 15 years ago so that they can ignore the fact that you’re spending more for a new iPhone or a new GPU. That adjustment is called hedonic adjustment.

So overall, we have talked about the costs of food, we’ve talked about the cost of energy, we’ve talked about the cost of housing, we’ve talked about the cost of utilities, and all of these have gone up in many cases at least 100% in the past 15 years. Now, perhaps it isn’t every single thing, but when some of the largest parts of a family budget are increasing that much in that span of time, a cpi that suggests prices rising at least than half that rate is clearly wrong and given the out in the open “adjustments” that started in the 80s and continued through the 90s. There are websites that track cpi using the pre-1980 cpi calculation, and the previous number is consistently significantly higher.