The Inflation Rate Is A Lie Too

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Michael Snyder, Contributor

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.

So you might want to start clipping more coupons, because a trip to the supermarket is about to become even more painful on the wallet.

Water bills have also been steadily rising all over the country.  According to a study conducted by USA Today, some Americans have seen their water bills triple over the past 12 years....

While most Americans worry about gas and heating oil prices, water rates have surged in the past dozen years, according to a USA TODAY study of 100 municipalities. Prices at least doubled in more than a quarter of the locations and even tripled in a few.

So what is causing water prices to skyrocket?

The following are the reasons given by USA Today....

The trend toward higher bills is being driven by:
-- The cost of paying off the debt on bonds municipalities issue to fund expensive repairs or upgrades on aging water systems.
-- Increases in the cost of electricity, chemicals and fuel used to supply and treat water.
-- Compliance with federal government clean-water mandates.
-- Rising pension and health care costs for water agency workers.
-- Increased security safeguards for water systems since the 9/11 terror attacks.

Unfortunately, one of the experts USA Today interviewed said that we can expect water bills to rise between 5 percent and 15 percent a year moving forward.

Of course the price of gasoline has also become absolutely outrageous.  It has doubled since Barack Obama entered the White House, and the average American household spent more than $4000 on gas last year.

In California, temporary refinery problems have sent gasoline prices absolutely skyrocketing over the past week.

The average price of a gallon of gasoline hit another brand new record high on Sunday.  According to AAA, the average price of a gallon of regular unleaded gasoline in California is now $4.655, and at some stations it is well over $5.00 a gallon.

Sadly, some analysts are warning that the supply problems in California may last until November.
Hopefully this is a reminder to all of us of just how vulnerable our economic infrastructure can be.  If temporary refinery problems can cause this kind of chaos, what would a major crisis do?
But despite all of the evidence to the contrary, Federal Reserve Chairman Ben Bernanke continues to insist that prices are very stable right now.

In fact, one of the reasons why he says that more money printing ("quantitative easing") is okay is because we are in a "low inflation" environment at the moment.

Sadly, this is exactly the kind of delusional thinking that led to the horrible crisis in the Weimar Republic back in the 1920s.  Quantitative easing did not work for the Weimar Republic, and it is not going to work for us either.

But it will cause the prices of the things that we buy on a regular basis to go up even more.
So what can we do about all of this?

Well, perhaps we can avoid paying higher prices for things by having the government give them to us for free.

That is what some Americans are doing.

There are some Americans out there that have absolutely no shame at all and will squeeze as much free stuff out of the government that they can.  For example, one woman in Baltimore has actually accumulated 30 free "Obamaphones".  The video below explains how she has been able to get 30 free cell phones all paid for by the U.S. government....



This article first appeared here at the American Dream.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

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