Wednesday, April 13, 2011

Inflation Actually Near 10% Using Older Measure - A Government Trust Issue

It is nice to be an Emperor, as we should be looking at our inflated government today. If the statistics don't show the desired results, then the government changes the way the statistics are calculated.

A major source of my income these days are the social security checks my wife and I get after putting into that "fund" for most of our working lives. The cost of living allowance (COLA) built into the law is supposed to protect old fogies, like myself, from the effects of inflation. Any of you who have gone food shopping, or filled your gas tank, or paid a utility bill or gone to a movie, or paid an insurance bill, knows that there has been a significant increase in the cost of living just in the last year. Guess what, the government says no COLA last year and not this year either. I feel great that I can contribute to the government "savings" so that we can give billions in foreign aid to unfriendly countries, fund NPR and Planned Parenthood abortions, increase funding for a Dept. of Education that has shown negative results since being established, and pay for the 200,000 plus government employee increase since Obama has taken over.

Many economists believe that the intent of the Fed, in monetizing the debt, and the intent of the New World Order members in our government, is to create hyperinflation that will eliminate our debt, destroy all individual wealth and create the basis for a socialist utopia to rise from the ashes.

Our only possible saving grace is to replace the liberals in our government with people like Paul Ryan and Rand Paul, who believe in fiscal responsibility.

After former Federal Reserve Chairman Paul Volcker was appointed in 1979, the consumer price index surged into the double digits, causing the now revered Fed Chief to double the benchmark interest rate in order to break the back of inflation. Using the methodology in place at that time puts the CPI back near those levels.

Inflation, using the reporting methodologies in place before 1980, hit an annual rate of 9.6 percent in February, according to the Shadow Government Statistics newsletter.

Since 1980, the Bureau of Labor Statistics has changed the way it calculates the CPI in order to account for the substitution of products, improvements in quality (i.e. iPad 2 costing the same as original iPad) and other things. Backing out more methods implemented in 1990 by the BLS still puts inflation at a 5.5 percent rate and getting worse, according to the calculations by the newsletter’s web site,

“Near-term circumstances generally have continued to deteriorate,” said John Williams, creator of the site, in a new note out Tuesday. “Though not yet commonly recognized, there is both an intensifying double-dip recession and a rapidly escalating inflation problem. Until such time as financial-market expectations catch up with underlying reality, reporting generally will continue to show higher-than-expected inflation and weaker-than-expected economic results in the month and months ahead.”

Read full CNBC article here.

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