Follow The Bottom Violation
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May
21
No inflation? Really? Have You Been to the Grocery Store Lately?
Your government would have you believe that prices — on the whole — declined for most of 2009, and have been increasing at only a snail’s pace since. The metric the government uses for determining this aggregate rate of change is the consumer price index — or the CPI.
And, as usual, your government is lying to you.
The Federal Reserve doesn’t want you to know that the CPI doesn’t include to extremely critical items: food and energy. And why does the Fed not want you to know this? Because the Fed knows that it has been printing money and easing credit faster than any other government in the history of the world — literally. The Fed knows that the only way to postpone the dollar’s collapse is to create a measure of inflationary price movements that doesn’t accurately reflect what’s really going on. The government has chosen to exclude energy and food prices from the CPI because they claim these items are more volatile and sensitive to external influences. They claim that the only way to account for true price changes is to exclude food and energy.
Consider this excerpt from an article that appeared a while back in USA Today — just as the debate about coming inflation began to heat up:
“When consumers think of inflation, they often focus on prices of things they buy regularly, such as food and gasoline, which have been going up significantly in price this year.
“But when economists, including Federal Reserve officials, talk about inflation, they often focus on a measurement of price pressures called ‘core’ inflation. Core inflation excludes costs of food and energy goods, the very items that are the most visible prices for most consumers…
“The theory is that food and energy prices historically have been subject to wild swings. Therefore, to get a better gauge of the underlying trend, you should cut those items out.”
Now let me ask you this: why does the government’s primary metric for gauging inflationary price movements include the word “consumer” in its title, if the government is going to exclude the most important and widely used items by consumers in the economy? In other words, if energy and food are the things consumers purchase most — why would the government exclude these items from the CONSUMER price index?
That makes absolutely no sense. The Fed is acutely aware of the fact that inflationary price increases always manifest themselves first in the commodities a society uses most — today, those are food and energy. The Fed doesn’t want to admit that prices are increasing; such an admission would mean that all the absurd and destructive policies the government has been implementing over the last three years are absolute failures. But the numbers don’t lie, and the numbers are telling us that the policies are failures.
I’ll say it again: using the CPI as the source of its claim (excluding food and energy), the government wants you to believe that prices fell for most of 2009, and have only been moving up slightly ever since. So let’s look at what the prices of food and energy have done during that time:
- Since 2009, corn has more than doubled in price.
- Since 2009, coffee has more than doubled in price.
- Since 2009, oats have more than doubled in price.
- Since 2009, wheat has more than doubled in price.
- Since 2009, pork has more than doubled in price.
- Since 2009, milk has almost doubled in price.
- Since 2009, orange juice has almost tripled in price.
- Since 2008, oil has more than tripled in price.
- Since 2010, rice has risen by more than 40%.
- Since 2009, soybeans have risen by more than 40%.
- Since 2009, butter has risen by more than 40%.
- Since 2009, beef has risen by more than 50%.
These figures are not open for debate; they are part of a factual public record — easily obtained by anyone with an Internet connection. So the next time you start to believe the shameless lies your government is foisting on you regarding inflationary price pressures, take a deep breath, get in your car, and drive to the grocery store. That should leave you with no doubt as to exactly how much inflation has taken hold of our economy.
Disclosures: Paco is long gold and oil, and short Treasuries — all through leveraged ETFs.
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Disclosures: Paco is long TBT, UCO, and gold. He also holds U.S. dollars by necessity, pending the advent of private gold-backed currencies.
You can buy his novel Discipline wherever books are sold.
1 Comment so far
Partners
you are an idiot, you should spend at least 5 minutes learning about topics before posting on them. Food and Energy are included in the CPI, the article you quote refers to the Core PCE which the Fed uses to dampen the volatility in food and energy prices.