Inflation, Deflation, Quantitative Easing and Reality

According to the reports I’ve seen, the cost of Thanksgiving dinner went up 13% this year.  Don’t believe me?  Seven of the first 10 search results specifically mention the 13% number when looking up comparison costs.  Here’s what one brief article had to say (from

You can expect to pay more for your Thanksgiving Day dinner compared to last year. According to the American Farm Bureau Federation, the retail costs of most ingredients that make up the traditional feast are on the rise.

The average cost to feed 10 is $49.20, up from $43.47 last year — about a 13 percent increase.

That’s called inflation…in essence, each dollar we own is worth less due to the “Quantitative Easing” (AKA money-printing) programs implemented in recent years, and underlying farming and production takes more dollars to purchase and produce, and that is passed on to the consumer.

When was the last time your salary had a 13% increase in a year?  Average salary increases are closer to 3% annually.  How often do you hear news reports talking about 13% inflation?  It’s much more likely that we hear “economists” talking about deflation rather than inflation, claiming that some of that newly printed money can be reclaimed before hyperinflation takes its toll.  The government agencies (specifically the Bureau of Labor Statistics) just talk about these Consumer Price Index numbers that don’t seem to be related to the real world, saying things like:

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.5 percent before seasonal adjustment.

Apparently someone forgot to tell the grocery store owners about the 3.5% annual limit that the government agencies seem to think we’re facing.  Did you know that the CPI “formula” was reworked in 1980 because the numbers were too high?  Here’s what the media should really be reporting:

Inflation Actually Near 10% Using Older Measure (from

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.

What’s the “Real” Inflation Rate? (from

According to the above chart, inflation is running at 8.50% rather than the 1.15% that the BLS is publishing.

What’s America’s real inflation rate? (from

The Bureau of Labor Statistics lies.

Inflation numbers are intentionally manipulated to keep cost-of-living numbers low.

Alternate Inflation Charts (from

The CPI on the Alternate Data Series tab here reflects the CPI as if it were calculated using the methodologies in place in 1980. In general terms, methodological shifts in government reporting have depressed reported inflation, moving the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living.

True inflation rate 27.67 percent for past 12 months: Commodity Price Index (from

But a look at this Commodity Price Index chart indicates that the real inflation rate was over 20 percent for the past 12 months, more than 30 percent for food — even higher for commodities we really need to live.

Cotton is up 132 percent. Agricultural raw materials up 39 percent. Oil up 21 percent. Coal up 36 percent. Metals up 57 percent. Coffee up 70 percent. Wheat up 62 percent. Beef up 39 percent. Fish up 31 percent. Hard logs up 19 percent. Soft logs up 27 percent. Rubber up 79 percent. Wool up 57 percent. Fertilizer up 39 percent.  Soy beans up 42 percent. Corn up 58 percent. Silver up 60 percent. Industrial Inputs Price Index up 51 percent. Commodity Food Price Index up 30 percent. Commodity Fuel Price Index up 20 percent. Overall Commodity Price Index up 20 percent.

As you can see, this means that costs are rising in the 8-13% range annually (perhaps even 27 according to that article quoted above???), and hopefully your employer is giving you at least the 3% average raise, but that still means that you’re losing 5-10% in purchasing power every year!  Perhaps that explains why we all feel like we’re going backwards each year, and QE3 and QE4 are just around the corner to further inflate the currency!

Know the truth.  Stay informed.  Don’t just blindly follow the news that’s fed to you.  What else are you being told that’s not quite accurate?  Have you looked into the unemployment numbers recently?


Posted on 2011/12/04, in Money, News, Politics and tagged , , , , , , . Bookmark the permalink. Leave a comment.

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