The government is lying to us. I know this isn’t exactly news, because they lie to us all the time. But in this case, I’m talking about inflation. According to the most recent “official” government announcement by the Bureau of Labor Statistics on September 14, “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in August on a seasonally adjusted basis. Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment. The seasonally adjusted increase in the all items index was the largest since June 2009. About 80 percent of the increase was accounted for by the gasoline index, which rose 9.0 percent and was the major factor in the energy index rising sharply in August after declining in each of the four previous months.”
In effect, what they’re telling us is that, according to their barometer, inflation is running at only 1.7% over the past twelve months, and it’s only that high because of rising gas prices. In prior months it had been below 1% annualized. This “low inflation” is just one of the many factors used by the Federal Reserve to justify QE2 and QE Forever (aka QE3). The problem is that the government keeps changing the way they calculate CPI to suit their needs, which means they will use any tools at their disposal to show the lowest possible level of inflation. Anybody who lives in the real world knows that true inflation is rampant today, and is putting a death grip on ordinary citizens struggling to make ends meet.
Consider how much more expensive it is today to buy groceries, or fill up your tank, or go to the movies, or buy a pair of jeans, or send your child to college. I could go on and on. The government is insulting our intelligence every time they tell us there is little to no inflation. Where do they live? Who’s paying for their health care, or their cable bill or for the cost of a ticket to a concert or ballgame? When is the last time they went out to dinner and paid for a steak with their own money?
The cold hard reality is that the average American is earning less and less while everything we consume costs more and more. You’ll never hear that in any of the government pronouncements. Keep that in mind next time you read or hear a report telling us that we’ve conquered inflation. Don’t believe it; the government is lying.