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The Inflation Rate Is A Lie Too

October 8, 2012
The American Dream
10/7/2012

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.

And now… the rest of the story. …..

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