Government Shenanigans - The Inflation Lie! 01/30/2010
 Have you ever looked at that box of Cheerio's and wondered how the price has not gone up for many years even though many other things like gas and the cost of a movie ticket have gone up tremendously. Look at the box carefully. The same general height, the same general width. So walking down the aisle and looking up at the shelfs of cereal it looks the same as it always has. Thankfully your Cheerio's has not gone up in price like everything else! But when studying the contents you notice the actual cereal content is going down dramatically and then you realize the box is getting skinnier. This is the trick the cereal makers and actually most food producers are using to hide the massive effects of inflation at the grocery store. The gallon of ice cream now comes in a thimble for the same price. The bottle of water now has a giant bubble in the bottom of the container displacing a lot of the water. The government and mainly the Federal Reserve loves to brag about how low inflation is under their watchful eye, but is it? What’s really happening is they keep changing the method for which they calculate inflation to hide the real effects going on in our economy. This way they can justify issuing Treasury Bonds at absurd levels. They can barely bump up the payments for Social Security and Medicare to the US citizens, and they can run massive deficits without paying much for the interest. Below is the latest chart showing the Pre-1983 Consumer Price Index (CPI) method for calculating inflation (the one that actually shows food and energy and real housing costs) and the CPI method used today. The NEW method has clearly shown that the CPI has been very tame the last 20 years, merrily bouncing between 2-4 % and recently even going negative (Deflation!). The reality is we’ve been running at over 7.5% since 1996 and in mid-2008 even hit as high as 13%. Ask yourself a question. Have your CD’s been paying 7.5%? What about those Muni-Bonds? Stocks? Inflation is indirect theft from the person who keeps their money in Paper Assets (Stocks, Bonds, Variable and Fixed Annuities, and Cash) and transfers it to those who keep their money in Wealth Assets (Real Estate, Oil/Gas, Equipment, Bullion and Rare Coins). This Rich get richer in inflationary times and the masses get poorer. The person who keeps $100 in the bank sees their purchasing power drop by 50% while the person who keeps their $100 in Oil sees the price of a barrel of oil go up 100% and thus their value of the oil investment goes up by an equivalent amount and they have maintained their purchasing power. To truly understand how much purchasing power we have lost over the last 10 years. In order to buy the equivalent stuff for $100 in January 2000. According to the Government’s CPI you would need $127.93. Using the Pre-1983 CPI method, Today you would need $241.44. Now I know why my box of Product 19 only has 5 flakes in it?   Money printed since begining of 2008 Recession! CommentsLeave a Reply | FREE SUBSCRIPTION!Receive Emailed Articles as they are Posted. Click Below on RSS Feed!Jason's Thoughts!My goal is to use this format to bring important and timely ideas to the surface on recent events which I feel will affect all of us financially. ArchivesFebruary 2012 Categories |
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