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The Inflation Rate Is A Lie Too

Can we believe any of the economic numbers that the government is feeding us these days?  Most of the focus recently has been on the bizarre jobs report that the government released last Friday, but the truth is that the inflation rate is a lie too.   In fact, the way that the government calculates inflation has changed more than 20 times since 1978.   The government is constantly looking for ways that it can make inflation appear to be even lower.  According to John Williams of shadowstats.com, if inflation was measured the same way that it was back in 1990, the inflation rate would be about 5 percent right now.  If inflation was measured the same way that it was back in 1980, the inflation rate would be about 9 percent right now.  But instead, we are expected to believe that the inflation rate is hovering around 2 percent.  Well, anyone that goes to the supermarket or fills up their vehicle with gasoline knows that prices are going up a lot faster than that.  Just about everything that we buy on a regular basis is steadily becoming more expensive, and so most Americans are not buying it when government officials tell us that there is barely any inflation right now.

John Williams is not the only one doing research into these inflation numbers.  According to the American Institute for Economic Research, the real rate of inflation was about 8 percent last year.  The following is an excerpt from a story that was recently posted on the website of Pittsburgh’s NPR news station….

The federal government says that consumer prices rose moderately last year, but if you think the cost of everyday purchases increased more than that, then you’re probably right according to the American Institute for Economic Research (AIER).

The Bureau of Labor Statistics’ Consumer Price Index (CPI) was up 3.1% in 2011. However, AIER’s Everyday Price Index (EPI) indicates most Americans saw their day-to-day costs increase by 8%. That’s because the EPI excludes housing, automobiles, furniture, appliances and other items purchased occasionally.

So what are we supposed to believe?

Anyone that buys food on a regular basis knows that food prices have been going up significantly over the past couple of years, and because of the current drought things are about to get a whole lot worse.

In particular, the drought is expected to send meat prices much higher over the next 12 months.  The following is from a recent Reuters article….

The worst drought to hit U.S. cropland in more than half a century could soon leave Americans reaching deeper into their pockets to fund a luxury that people in few other countries enjoy: affordable meat.

Drought-decimated fields have pushed grain prices sky high, and the rising feed costs have prompted some livestock producers to liquidate their herds. This is expected to shrink the long-term U.S. supply of meat and force up prices at the meat counter.

Some analysts are projecting that we could see food prices rise by 14 percent or more over the next year.

So you might want to start clipping more coupons, because a trip to the supermarket is about to become even more painful on the wallet.

Water bills have also been steadily rising all over the country.  According to a study conducted by USA Today, some Americans have seen their water bills triple over the past 12 years….

While most Americans worry about gas and heating oil prices, water rates have surged in the past dozen years, according to a USA TODAY study of 100 municipalities. Prices at least doubled in more than a quarter of the locations and even tripled in a few.

So what is causing water prices to skyrocket?

The following are the reasons given by USA Today….

The trend toward higher bills is being driven by:

– The cost of paying off the debt on bonds municipalities issue to fund expensive repairs or upgrades on aging water systems.

– Increases in the cost of electricity, chemicals and fuel used to supply and treat water.

– Compliance with federal government clean-water mandates.

– Rising pension and health care costs for water agency workers.

– Increased security safeguards for water systems since the 9/11 terror attacks.

Unfortunately, one of the experts USA Today interviewed said that we can expect water bills to rise between 5 percent and 15 percent a year moving forward.

Of course the price of gasoline has also become absolutely outrageous.  It has doubled since Barack Obama entered the White House, and the average American household spent more than $4000 on gas last year.

In California, temporary refinery problems have sent gasoline prices absolutely skyrocketing over the past week.  The average price of a gallon of gasoline hit another brand new record high on Sunday.  According to AAA, the average price of a gallon of regular unleaded gasoline in California is now $4.655, and at some stations it is well over $5.00 a gallon.

Sadly, some analysts are warning that the supply problems in California may last until November.

Hopefully this is a reminder to all of us of just how vulnerable our economic infrastructure can be.  If temporary refinery problems can cause this kind of chaos, what would a major crisis do?

But despite all of the evidence to the contrary, Federal Reserve Chairman Ben Bernanke continues to insist that prices are very stable right now.

In fact, one of the reasons why he says that more money printing (“quantitative easing”) is okay is because we are in a “low inflation” environment at the moment.

Sadly, this is exactly the kind of delusional thinking that led to the horrible crisis in the Weimar Republic back in the 1920s.  Quantitative easing did not work for the Weimar Republic, and it is not going to work for us either.

But it will cause the prices of the things that we buy on a regular basis to go up even more.

So what can we do about all of this?

Well, perhaps we can avoid paying higher prices for things by having the government give them to us for free.

That is what some Americans are doing.

There are some Americans out there that have absolutely no shame at all and will squeeze as much free stuff out of the government that they can.  For example, one woman in Baltimore has actually accumulated 30 free “Obamaphones”.  The video below explains how she has been able to get 30 free cell phones all paid for by the U.S. government….

  • Jodi

    Just yesterday we needed to buy a package of hamburger buns, the package of 8 buns cost around $4.00. Ouch! If someone says there isn’t inflation, they are delusional.

  • Imaplaneiac

    Regarding free Obamaphones, on my ” land-line ” phone bill, the charge I’m COMPELLED by Uncle Scam to pay for the alleged ” poor ” is identified as the ” Federal Universal Service Fee “. This is why I’m now changing my phone service over to Magic Jack Plus ( MJP ); as another means to reduce my expenses, as well. However, I have found that Magic Jack’s Tech Support is available ONLY online; which has complicated my transition.

    As I reported … months ago, even prices for food, hygiene, and household cleaning articles, etc. in Military Commissaries are rapidly increasing!

  • Gary2

    I agree that the UE and inflation rates are not measured correctly. I see no way these issues can be honestly addressed until we admit what the rate truly is.

    If I did not need to measure my mortgage payment each month I would be looking a lot more financially better than I really am. Just because it is not measured does not mean it does not exist.

  • Dave Webb

    Since Obama took office we have managed to get one raise in Social Security this year. The other three years we were told that there wasn’t enough inflation to justify giving us a decent raise in our pensions.
    Now, that an election is coming up we get a raise. Seems a little bit suspicious to me. Your numbers better jive with what is actually going on in the marketplace than the government’s figures. But if you need a motive for playing with the numbers, that is the government motive. Deny benefits to Social Security pensioners.I am sure it is just an oversight on Mr. Obama’s part. He really meant for us to have raises to keep our standard of living the same, it just didn’t happen did it.
    Not that we are out there high wheeling it on our pensions. Most are also supporting kids and grandkids. Kids that have in middle age lost their jobs. Wonder who is to blame for that little fiasco? Or having them move back in because their houses are foreclosed on. Sure sounds like a good reason to vote for the people in office today. Not.
    Or how about almost zero interest on savings. Who do you think gets hit by that one? If you are like most old age pensioners, you saved money for retirement. Only the money in the bank is not worth what it was when you put it in there. Of course if you picked a currency that doesn’t counterfeit their money by printing dollars that have nothing to back them up, you might be fine. Or just buy gold since it has went from 35 dollars an ounce to almost $1700 an ounce and rising.
    This only works if the money you saved has been in a currency that doesn’t inflate all over the place. I guess we should have put the currency in Swiss Francs and in Swiss Banks. I understand since the end of WWII, the Swiss currency has went up in value around 3500%. They are in process of trying to lessen the value so they can compete with businesses around the world. But they are bankers. They are also not fighting wars all over the globe and spending my hard earned dollars. Or giving it away in Foreign Aid to everyone under the sun.
    Since 9/11, the Canadian currency has went from 62 cents per dollar to being worth 1 dollar for every dollar US.
    Don’t worry Mr. Obama. A lot of people might vote for you anyway. The opposition might be worse. Or at least that is what I have been told.
    Without a correction, a lot of pensioners do not see Mr. Obama as a good investment. I would like to see about a 20% adjustment which is about what it should have been over 4 years. But then you would be giving the money to working people. You might not be able to afford wars all over the place. You might send enough money back into the economy to actually put some of those people back to work. That would be horrible. Giving money back to Social Security pensioners, giving money to encourage people to work. Getting them off the government dole?
    Instead give the money to the non-working population. Give the Congress another raise. Give them a pension that equals their salary while they are in office(Oops, you already have that!) Make a national insurance system that pays for health care for the elderly instead of killing any savings they might have earned during their lifetimes. No we want to steal the money back.
    Maybe it is time for a little change . . . Maybe we need someone who respects people who work for a living.

  • Crusader

    As long as the prices are relatively steady and not constantly rising weekly people won’t care. And as long as people don’t care, they won’t wake up to this issue and keep voting in people who don’t do us any good. I don’t see the dollar collapsing any time soon, maybe not even for another decade… who knows. We have armies all around the globe, and the dollar will remain as default for the world’s currency. And also as long as the petrodollar system stays in we won’t have to worry about anything.

  • marcus

    Cutting cell phones will not make a dent in the budget. how about cutting millitary spending or 5 drone attachs a month. so what if poor people have more than one cell phone. they have nothing else to live for – all the jobs have been shipped off to china the blacks were better off in the 60′s than they are today.

    • Truth Can’t be Avoided

      Spoken like a parasitic ****************.

  • WarriorClass III

    When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

    We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

  • http://www.booksbyoliver.com GreenForest

    What??? My government lied to me again? First, it’s unemployment rate and now inflation. They take out the food/fuel costs before they calculate the inflation rate.

    Of course, the big wigs in D.C. have their own government chauffers & don’t have to pay for fuel. Their meals are subsidized in their cafeteria at the capitol or lobbyist feed them constantly each night at fund raisers.

    If food prices increase by just 14% then I would be happy, but I am sure it will go up to 20+%. Coffee is now 30% inflation.

  • Ameen

    THIRTY Obamaphones??? What a pathetic comment on that person in particular, and on freeloaders like her in general….

  • http://www.survive2balive.com GA

    We hear food prices will go up because of drought…and they will. However, do not expect them to go down when the rains return. Just like oil and gas, once the prices go up and stay there for some time the sting of the increase wears off and the new prices become an accepted norm. The reality is that these price increases are happening as a direct result of Fed monetary policy and they are more than happy to blame mother nature or conflict in the middle east for the increases. The purchasing power of the US Dollar weakens everyday and as long as the Fed keeps printing money this trend will continue.

    Acquire long term food storage at today’s costs while there still is time. Your food purchases will be your hedge against inflation and you will have it on hand in the event of emergency. One day we are going to wake up to disaster, such as a bank holiday, and when we do it will be pure pandemonium. Prepare expeditiously!

  • Tim

    “According to AAA, the average price of a gallon of regular unleaded gasoline in California is now $4.655, and at some stations it is well over $5.00 a gallon.”

    I live in South Carolina, and we have the lowest average gasoline price in the nation right now, according to http://www.gasbuddy.com. I don’t know why that is, but I’m not complaining. This morning I paid $3.389 to fill up my car. Thankfully, my car is pretty good on gas, so this morning’s fill up will last a couple weeks. I see people driving these big SUVs and trucks and think that they must be spending a fortune on gas. I think it’s only a matter of time before gas is over $4 here.

  • jsmith

    It used to be that thrift and savings were the norm for Americans. With inflation rates of 5 to 8% why would anyone want to have a savings account?

  • liberranter

    Can we believe any of the economic numbers that the government is feeding us these days?

    Sure, if “we” are mentally retarded, toddlers, innumerates, or have been living our entire lives in a coma up until this morning. Otherwise, the answer is HELL NO.

  • Snake Pliskin

    The Gov has been living off the people a long time congress gets excellent heatlthcare and their fam even after retirement bush gets 1,000000 a yr for just being an ex pres. some people think the gov owes them…. they are not to wrong in thinking this way what a mess this has become

  • mark

    We can turn this around if we were to act now. The sad reality is that we will not. We could cut spending on the food stamp program and still feed people. Instead of being able to buy whatever with the food stamps, just the basics should be allowed. Food such as flour, rice, beans, powered eggs, sugar, some can fruit and vegetables and go home and cook. This would feed you if you have nothing or if you want more choices work for it. But this will not happen as it would be considered too hard. We could stop nation building. That does not mean that we stop taking a group out if they mess with us, but we do not spend and borrow money to fix up their country. Let them fix it up themselves and maybe they might think twice before messing with us again. We should have larger co-payments for medicare. Freeze social security monthly checks, no cost of living increases. Charge co-payments for medicaid. Get rid of most section 8 housing or at least have the tenant pay a larger amount. Cut government workers pay 20% across the board and cut the government pensions and no cost of living raises for their pensions. The private worker pensions do not have this benifit. Get rid of redundent federal programs. Quit trying to be the policeman of the world. Change or way of collecting taxes so that everyone has a dog in the fight. A national sales tax of abuot 10% should be more than enough as it is good enough for tithing. Then donate extra to a private charity of yor choice to help the poor. No income tax for income under whatever. Some kind of an income tax for the super rich if you want to punish them for being sucessful. Let’s drill for oil in our own country on public lands. There are a lot of things that we could do, but as I said we are not going to do what is right.

  • sunshine

    Glassdoor.com was an interesting website. Odd that a Co. like Costco can pay it’s employees a fair wage while the taxpayers subsidize the incomes of the employees of the mart and dollar stores because those places won’t pay their people enough to live on. Yet they’re quite profitable.
    Could be that if the people stop patronizing the slave wage companies things could change..
    In other words.. quit feeding the beasts that impoverish the people. Support companies that recognize the value of the working class.

  • Gary2

    Something has to give.

    And it will. If the wealthy want their little balcony champagne soirees to be enjoyable, they are going to have to buy peace. Those without aren’t going to take the 1% in-your-face extravagance without a response forever. The 1% are either going to have to ensure that no one lacks for the basic necessities, or they are going to have to break their banks defending themselves against those in want. The choice is theirs. The time is short. And if this be the dreaded Socialism, then we’ll make the most of it – for we are running out of things to lose.

    When Marie Antionette and her old man lost their heads to hungry, angry peasants, it wasn’t called Socialism. Time is short, indeed.

    Please make a reasonable profit just don’t be a fucking Pig.

    The rich WILL be taxed hard and their. wealth WILL be spread more evenly one way or another

    • Col. Wilson

      sigh… again Gary2 spouts his rhetoric of ‘TAX THE RICH & SPREAD THE WEALTH’ the problem is that FACTS show this is IMPOSSIBLE!

      Watch the following videos & see for yourself…

      1. The National Debt and Federal Budget Deficit Deconstructed
      http://www.youtube.com/watch?v=jboTeS9Okak

      If that wasn’t bad enough, we can’t even tax the rich to balance the budget!

      2. What Can We Cut to Balance the Budget
      http://www.youtube.com/watch?v=asRDOhgN70Q

      Amazing how you (Gary2) ignore the facts & continue to promote such ridiculious ideas. Your obviously intelligent & well spoken however there is a lot that your missing.

      I hope you see the truth soon.

  • William

    There are reasons that the fed gubmint fudges the CPI.
    If GDP was adjusted by REAL inflation numbers, it would be flat, or negative.
    Keeps the COLA artifically LOW.
    Makes the paltry interest rates for savers seem not so bad (falsely).
    Lets Uncle Sugar borrow HUGE sums at LOW interest rates.
    BUT, when the CRASH comes, it will all not seem so harmless…………..

  • Mark

    Got gold?

    If the government was honest about inflation rate it would have to admit that…

    -The economy hasn’t been in recovery, more to the point the economy is in decline.

    -Anybody investing in treasuries is loosing value of principle and producing a negative rate of return.

    -Government spending has to increase with inflation.

    Last month I have made a bet with a friend that we will be paying $6.00 gasoline at the end of 2013. I explain to him the if I lost the bet the $20 I would give to him would be worth more than $20 I would have won from him. He said that $20 dollars today will be worth $20 dollars tomorrow. I am curious who is right.

    Mark

  • James

    Cell phones are an unnecessary luxury and shouldn’t be made a point of importance. Food, medicine, and a place to live should be at the forefront of a person life. Soon that will be all there is, and even that will be hard to get.

  • E2

    The mint is hoarding the new $100 bills. I have to assume its for when they devalue the old dollars.

  • Elisabeth

    The global economy is a train wreck and it won’t get better anytime soon. Food, gas and housing costs are going up and up with it all we can do just to get by.

    The I-Ching “Timewave Zero” prediction confirms what the Mayan calendar has already told us…that major changes to our world will occur in 2013.

    http://www.familysurvivalcenter.com/news.htm#iching2012

    Stop chasing material goals and get your priorities straight. Set aside food and supplies to provide for your family now.

    • Hammerstrike

      The World economy have a hugh parasite, it is called the federal reserve.

  • Piglet

    Where does the term “inflation” come from? It isn’t synonymous with rising prices. “Inflation” means inflating the supply of money. When we read…

    “In fact, one of the reasons why he says that more money printing (“quantitative easing”) is okay is because we are in a “low inflation” environment at the moment.”

    …we must understand that QE (money created out of thin air) IS inflation and the primary cause behind rising prices because creating more money dilutes the value of money already in existence. We must also understand that the Fed and the politicians are lying to us about what’s really causing prices to rise. They’re putting the blame elsewhere when it should be hanging around their own necks.

  • http://twitter.com/HarrisonTerran Harrison Terran

    Living costs are continuously climbing and it seems as though the sky really is the limit?! Pensions are becoming a dream and job security seems to be a fairytale. It’s as if our politicians are incapable of truly dealing with the problems at hand. It’a about time they took the advice of the people at the Orlando Bisegna Index, true specialists in the economic crisis. They have been able to come up with plans that have helped diverse counties with debt problems, business failures and unemployment, therefore improving the many families’ economic situation.