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The Inflation Rate Is A Lie Too
The American Dream ^ | 10-07-2012 | Michael

Posted on 10/08/2012 9:34:26 AM PDT by Renfield

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.


TOPICS: Business/Economy; Government
KEYWORDS: economics; inflation

1 posted on 10/08/2012 9:34:30 AM PDT by Renfield
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To: Renfield

I never understood this. If something that I routinely bought for years at the grocery store was .99 cents and is now always $1.49 —in my eyes that’s a 50% increase. That kind of price jump is what I am seeing across the board. Not nickels and pennies.


2 posted on 10/08/2012 9:36:49 AM PDT by riri (Plannedopolis-look it up. It's how the elites plan for US to live.)
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To: Renfield

Since Social Security is adjusted annually for inflation, I have long suspected that they keep redefining inflation as a way to slow the payouts of the treasury.


3 posted on 10/08/2012 9:39:27 AM PDT by oldbrowser (An empty chair attracts a stadium full of empty chairs.)
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To: oldbrowser
Since Social Security is adjusted annually for inflation, I have long suspected that they keep redefining inflation as a way to slow the payouts of the treasury.

The price index used to calculate the Social Security COl "adjustment" does not include food or energy price increases. Now what could possibly go wrong with that?

Regards,
GtG

4 posted on 10/08/2012 9:58:37 AM PDT by Gandalf_The_Gray (I live in my own little world, I like it 'cuz they know me here.)
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To: Renfield

Just paid 4.70 a gallon for gasoline so I could get to work. Glad I have a job at all


5 posted on 10/08/2012 10:03:40 AM PDT by Nifster
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To: riri; All

Another thing that is happening quite frequently nowadays, that not many people have noticed, is that manufacturers are shrinking their package sizes while still charging the same dollar amount as for the old sizes. Clorox now comes in a 3/4 gallon bottle instead of a gallon bottle...but with no price decrease. Breyer’s Ice Cream now comes in a 3-pint container instead of a half-gallon. A “quart” of cottage cheese is now 24 ounces.

I think actual inflation is a lot higher even than the 8 or 9 percent claimed in the article. I’d say about double that.


6 posted on 10/08/2012 10:13:41 AM PDT by Renfield (Turning apples into venison since 1999!)
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To: Gandalf_The_Gray

I’ll bet they factor in the drop in housing prices when calculating the Consumer Price Index. That keeps the reported inflation rate down while the price of everything except houses shoots up.

(Just think of all those retirees on Social Security anxiously waiting to jump on a good real estate deal! /sarc)

The CPI is just another “You lie!” instance from D.C.


7 posted on 10/08/2012 10:21:51 AM PDT by LearsFool ("Thou shouldst not have been old, till thou hadst been wise.")
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To: Renfield
The way official inflation is calculated by the Government,energy and food are excluded. In my opinion. it is a sham that hurts low income and fixed income individuals especially hard.
I remember Obama proudly proclaiming before his election that Utility bills will have to skyrocket when he became President. Of course, nobody listened to anything since they were betting on “hope”.
I still believe there was mass hypnosis in play, no one could be that stupid to vote for their economic demise?
8 posted on 10/08/2012 10:22:33 AM PDT by americanbychoice3
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To: riri
If something that I routinely bought for years at the grocery store was .99 cents and is now always $1.49 —in my eyes that’s a 50% increase.

More like 80%. You probably paid $.99 for a pound of something that now comes in a 12 oz. size.

9 posted on 10/08/2012 10:22:56 AM PDT by NY.SS-Bar9 (Mitt has dogs for pets - Obama had them for lunch)
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To: Renfield
Yep, they stopped counting the things people rely on to live like food in order to hide just how bad inflation currently is.

Look at your electric bill mine has gone from about $30 a month when Obama took office to a regular $100+ monthly bill. My usage has not changed, my costs have.

10 posted on 10/08/2012 10:28:21 AM PDT by MNJohnnie (Giving more money to DC to fix the Debt is like giving free drugs to addicts think it will cure them)
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To: Renfield

Can anyone point or link a resource that explains the changes in how inflation has been calculated since the 1980’s.

I recall the debt and inflation from the 70’s being a big political issue in the early 80s. Over the past few years I have heard, read and seen many assertions that the inflation numbers are bogus. But I cannot find any one spot that documents the changes in how it is calculated over the years.

Any help would be appreciated.


11 posted on 10/08/2012 10:33:53 AM PDT by Tenacious 1 (The Click-&-Paste Media exists & works in Utopia, riding unicorns & sniffing pixy dust.)
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To: Renfield
Hope and Change

Typical Senior dinner, 2008

Typical Senior Dinner, 2012

FUBO!

12 posted on 10/08/2012 10:39:41 AM PDT by WVKayaker (I'm more than happy to be Obama's "enemy of the week" - Sarah Palin)
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To: Renfield

Oh sure, in fact, the shrinking packages began a long time ago. It has gotten so that many products I just don’t buy. What am I going to do with a nine ounce box of cereal? I tell my kids pretend I bought it, we had one bowl and now it’s gone.


13 posted on 10/08/2012 10:52:14 AM PDT by riri (Plannedopolis-look it up. It's how the elites plan for US to live.)
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To: Renfield

Oh sure, in fact, the shrinking packages began a long time ago. It has gotten so that many products I just don’t buy. What am I going to do with a nine ounce box of cereal? I tell my kids pretend I bought it, we had one bowl and now it’s gone.


14 posted on 10/08/2012 10:52:43 AM PDT by riri (Plannedopolis-look it up. It's how the elites plan for US to live.)
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To: Tenacious 1

“Can anyone point or link a resource that explains the changes in how inflation has been calculated since the 1980’s”

OK, now will open it, I believe they stopped counting Food and Fuel in 1982.

If I am wrong I will be the first to admit it.


15 posted on 10/08/2012 10:57:32 AM PDT by hadaclueonce (you are paying 12% more for fuel because of Ethanol. Smile big Corn Lobby,)
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To: Tenacious 1
American Institute for Economic Research

See, in particular, discussion about the comparison of the AIER Everyday Price Index (EPI) with the government's Consumer Price Index (CPI).

The EPI Reflects Basic Economic Change

16 posted on 10/08/2012 11:00:13 AM PDT by Cboldt
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To: Renfield

Thanks for posting this.


17 posted on 10/08/2012 11:03:26 AM PDT by ColoCdn (Neco eos omnes, Deus suos agnoset)
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To: Tenacious 1

Re: “Can anyone point or link a resource that explains the changes in how inflation has been calculated since the 1980’s”

The CPI has changed from measuring the cost of maintaining a set standard of living to the cost of maintaining a declining standard of living. Some of the tools used are: core inflation the number which excludes food and energy and is used to evaluate the Fed’s performance, owner’s rent equivalence, substitution, hedonics, chained dollars, weighting, intervention analysis,

Over time the definition of the CPI has even changed.

These articles are a good start:
http://www.shadowstats.com/article/no-438-public-comment-on-inflation-measurement

http://www.shadowstats.com/article/consumer_price_index

http://www.shadowstats.com/article/350

http://madconomist.com/data-fudging-101-the-history-of-us-government-statistics-manipulation

http://harpers.org/archive/2008/05/0082023


18 posted on 10/08/2012 11:24:23 AM PDT by khelus
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To: Renfield

Great read!

Thanks!


19 posted on 10/08/2012 11:51:46 AM PDT by NonLinear (Giving money and power to government is like giving whiskey and car keys to teenage boys.)
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To: Renfield

Find an old newspaper ad and look at the prices from 10 years ago.


20 posted on 10/08/2012 12:11:36 PM PDT by ozzymandus
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To: WVKayaker

That’s why they don’t want to count food and energy in inflation.

Supposedly picture 2 is equivalent of picture 1, so there is no inflation in your food budget.


21 posted on 10/08/2012 12:14:11 PM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: MrB
Supposedly picture 2 is equivalent of picture 1, so there is no inflation in your food budget.

As recently as 2 years ago, I bought whole NY Strips for $4.99/lb and whole tenderloins for $5.99/lb, cut the way I like them (THICK!). Now, I am paying as much as $3.79/lb for GROUND BEEF!

Seniors on small incomes are now forced into the frozen dinners, and senior center lunches!


)menu from Queen Anne's county, MD, from web search: senior lunch)

22 posted on 10/08/2012 12:27:55 PM PDT by WVKayaker (I'm more than happy to be Obama's "enemy of the week" - Sarah Palin)
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To: riri
shrinking packages

Seriously, today I opened a can of tuna. They are down to 7 oz. Even bars of soap are smaller. It is just ridiculous. The quality and quantity of merchandise is depressing.

23 posted on 10/08/2012 12:34:32 PM PDT by World'sGoneInsane
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To: khelus; Cboldt

Thank you for the links. I am learning a lot and have some research to do.

I might end up writing up my own report. My effort would be to simplify it for the sheeple, including friends and family.


24 posted on 10/08/2012 1:23:48 PM PDT by Tenacious 1 (The Click-&-Paste Media exists & works in Utopia, riding unicorns & sniffing pixy dust.)
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To: Gandalf_The_Gray

And the COLA under 0bambi has disappeared. There has been ONE COLA increase in four years - and that got taken away by Medicare increases.


25 posted on 10/08/2012 2:05:36 PM PDT by NTHockey (Rules of engagement #1: Take no prisoners)
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To: World'sGoneInsane

Also, I have noticed a lot less in the way of new products too. It is depressing.


26 posted on 10/08/2012 2:32:27 PM PDT by riri (Plannedopolis-look it up. It's how the elites plan for US to live.)
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To: riri

The best deal I’ve seen on cereals is the big bags from Malt-o-Meal.

http://www.malt-o-meal.com/

They have equivalents to some of the traditional ones like mini wheats and honey nut cheeerios and taste about as good.

Very low priced compared to the name brands.


27 posted on 10/08/2012 2:37:56 PM PDT by nascarnation (Defeat Baraq 2012. Deport Baraq 2013)
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To: LearsFool
I’ll bet they factor in the drop in housing prices when calculating the Consumer Price Index.

They actually use rent. If they would have used house sales, the Fed might have put the brakes on the housing bubble a lot sooner.

28 posted on 10/08/2012 4:24:23 PM PDT by EVO X
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