Inflation Propaganda
This is a great analysis by Peter! Â It’s common sense that you can’t print your way out of problems. Â As painful as it is, hard work and productivity are the keys to wealth.
Let’s look at real inflation in real estate:
5.4% year-over-year gain for home prices has put the FHFA (Federal Housing Finance Agency) House Price Index back at June 2006Â levels!
Oakland California rents have been rising faster than those of any other major city, up 20 percent in a year, followed by Austin at 17%. Other California cities seeing double-digit rent increases in the past year are Sacramento, No. 4 at 15.4 percent, for a one-bedroom unit; San Jose No. 5 at 14.9 percent; and San Francisco, No. 9 at 12.9 percent.
As for the government’s CPI – – – Accountants have a saying that “Figures don’t lie – but liars do figure.”
*Keep in mind, this video was published in January 2013!
The CPI is no longer a tool to accurately measure inflation, but an instrument of propaganda the government uses to hide accelerating inflation from the public and financial markets. Modest CPI increases over the past several years do not reflect an absence of inflation, but a design flaw in the index that fails to fully capture the magnitude of price increases. Central bankers drawing economic conclusions regarding inflation and monetary policy based on this highly flawed data point are making a major policy error.
Note: Prices for the twenty items in our basket rose 44.3% during a ten-year period despite an official rise in the CPI of just 27.5% during the same time frame. But that is using official government numbers to evidence those price increases. However, judging by the inaccuracy of government numbers on other items, such as newspapers and health insurance, the actual rate of increase of the prices of the goods in our basket was likely much higher than what the government claimed!
Peter, I agree with almost everything you have to say. But when it comes to inflation, you are WRONG. You’re saying that all money printing is inflation, but that principle only applies to sound money, or rather money that is backed by something. How do you inflate the value of something that is already worthless? Because when we left the gold standard the dollar became technically worthless… it had no direct utility or exchange value for the purpose it was printed. It’s only because of people’s ignorance that they were still willing to use dollars in commerce.
The people should have demanded a new gold backed currency right then and there to replace the non backed currency, but because we didn’t, the illusion of the dollar’s value survived. The only thing that backs any fiat currency is what people believe it is worth, or what it is worth to others. The act of the fed printing money alone doesn’t cause inflation. Its only when people stand up and notice the money printing that the perceived value is decreased and inflation occurs.
The fact that we still use dollars today after leaving the gold standard proves that the illusion of money’s value is as good as gold. My point is that inflation only occurs when people BELIEVE inflation has occurred. Because its only people’s belief in what money can buy that gives money its value. When hyperinflation occurs and people see people walking around with wheelbarrows of money, well yeah then its obvious that the money is worthless. But if those people can find others willing to sell their goods and services for a few of those dollars, then the person with the wheelbarrow is rich because whats the difference?
That’s why the dollar is stronger than what you would expect given all the fed’s QE. Even though a lot of us realize weakness in the dollar, there are still so many people who don’t. That alone makes the dollar valuable to us. That’s why I don’t think hyperinflation is likely, because most people are too disinterested with economics to care or understand anyway. They will still work hard for those worthless dollars.
You also have to take into consideration the drop in quality of nearly every product manufactured today when you are figuring the CPI and standard of living. our disposable society gives us cheap products; this lowers our standard of living because the product is not breaks easily and we have to continually replace it, not to mention that waste of capital that went into making it. as opposed to the 1950s where those well-made items are still improving the standard of living for everyone today.
if an I-phone would be produced in the us, not even half of the people who now have one would be able to purchase one, and therefore would not count into the calculus for inflation that much. 2nd: if the Chinese would want to sell the treasuries all at once, the prices for them would fall dramatically and they would suffer big losses. so therefore they are tied towards holding and buying us treasuries. there is no fast way out for them and therefore the demand for treasuries will be high.
It’s totally obvious that our government is lying to us about inflation. It makes you wonder – what else are they lying to us about? And think of the way they tell us that they are debasing our currency – “easing” or “QE.” The government is in reality stealing money from us by debasing our currency.
