Skip to comments.Why You Can't Trust the Inflation Numbers (Real # is 10%)
Posted on 01/29/2011 6:30:05 AM PST by Erik Latranyi
A surprising number of people on Wall Street will tell you not to worry too much about inflation.
After all, they'll say, just look at the numbers. The inflation picture is incredibly benign. In the past 12 months the Consumer Price Index has risen just 1.5%a remarkably low rate. And when you strip out volatile food and energy costs, they'll say, it's even lowera meager 0.8%.
It doesn't stop there. Many economists will point out that wages are also rising by less than 2% a year. With so many people still out of work, goes the line, labor costs are going to stay low for a long time too. So what's the worry?
(Excerpt) Read more at online.wsj.com ...
According to one rogue economist, John Williams at Shadow Government Statistics, if we still calculated inflation the way we did when Jimmy Carter was president, the official inflation figures would look about as bad as they did when ... Jimmy Carter was president. According to Mr. Williams's calculations, if we counted inflation under the old system the official rate wouldn't be 1.5%. It would be closer to 10%.
But the media tells us that the economy is improving, so it's all good.
any guy who can pen the theme to star wars and be a rogue economist is pretty impressive.
I go to the grocery store, and I know that the “zero inflation” is bunk.
The Federal Government plays with inflation numbers because they are tied to cost of living raises in Social Security and many retirement systems. A low number saves them billions. Meanwhile, as taxes, food, and energy prices skyrocket, the retiree struggles.
To many people don't realize just how fragile we are right now. Our whole economy could collapse into the dust. Obama and his ilk are h*ll bent on spending, spending, spending, government can fix everything. This is what will push us over the edge. Thank GOD for the last election.
That’s ok... Obama’s going to build a high speed rail. /sarc
Since government is always willing to fudge to both make itself look better and to “At all costs, we don’t want to start a *panic*!!!” (that would make us look bad), the alternative is to privatize the statistics.
This can be as simple as a website. Ask volunteers to go “shopping” where they normally go shopping, and note the prices for a given type of merchandise.
Importantly, in food right now, a lot of manufacturers are using smaller packaging, or putting less food in the same size packaging, so this has to be taken into account. The grocery stores can help in this, as some of them put “price per ounce” on shelf tags.
And also, entries need to have a “sale” tag to indicate if an item was offered at a sale rather than regular price, and a “list” and “store club” price. This can be amusing, as some stores will have a substantially higher, even artificially high, list price than store club price, to encourage customers to provide personal information for the store club.
But, as I was saying, a website could easily plot accurate inflation or deflation statistics with just a few hundred volunteers around the US. Then, by discarding the jokers who want to abuse the site by posting wildly incorrect numbers, you would get some reliable national statistics, uncorrupted by spin doctor economists.
The economy is improving but only by less than three percent. To have an economy to thrive, it has to be at least six percent. We are in a dead zone. It’s tough getting or maintainimg a job, and we know why.
Just like current Unemployment numbers, they change the accounting method to make this Regime look better than it actually is.
This is almost a carbon copy of the Old Soviet Union propaganda machine. They are literally sweeping this disaster under the rug, thinking we will never notice!
Yep. Just quit eating and driving to work and watch the old bank account THRIVE!
I don’t think it flies.
Watching Baraq campaign on a record of 10% unemployment, plunging real estate prices, and $4 (maybe $5 after Egypt)gasoline should be fun.
It is the obamaniton math that the communist democrats have used to deceive the simple minded who go to the stores and pay inflated food and article prices that have increased at least 10% and know the man is lying. The democrats also rigged the unemployment numbers as every laid off worker who wants a job knows.
In the past 12 months the Consumer Price Index has risen just 1.5%.
A third of it came in one month: December 2010
With the 150 point drop in the market yesterday, many are reminded of this crisis. We cannot forget the biggest bubble of all is about to burst. The US is at serious risk of losing it’s status of the world’s reserve currency.
We need to dramatically cut spending to levels that will cause pain and discomfort to all. We need to start taking some of our lumps now or be bludgeoned to death later.
Also note that the most recent unemployment numbers were bad, but blamed on "the weather". The Soviet Union had a failed economy because they had "bad weather" -- 74 years of it.
We have become them.
Even more so now than ever.
The current business model is to not "tie up capital in inventory", but have it delivered "just in time", loading dock to factory floor.
No safety stock. None.
Any disruption anywhere in the supply chain puts people out of work in hours.
This kills the Cornyn-Hatch Balanced Budget Amerndment for me.
The Amendment would cap federal spending to 20% of GDP.
Of course, how they calculate GDP would be open to shenanigans!
Your experiences (minus the gas lines) is pretty much the same as mine. Prices haven’t jumped quite as much as they did back then.
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