Were you to look at official government statistics that calculate our rate of price inflation for food, energy, clothing, and other consumer goods, you’d think that prices were as stable today as they were under the gold standard.
According to the Bureau of Labor and Statistics, the CPI (Consumer Price Index) inflation rate remains well below the Federal Reserve’s 2.5% threshold. Insofar as the government is concerned America’s core inflation rate is just 1.7%, a testament to the economic prowess of our central bank and Chairman Ben Bernanke.
And because there is no significant price rise being realized in consumer goods based on the government’s calculations, the millions of Americans dependent on disbursements like social security, disability assistance and nutritional food support will see no adjustments to their monthly stipend. And why would they? Prices aren’t rising!
Or are they?
According to Peter Schiff, who is well known for his dire economic warnings leading up to the crash of 2008, the government is involved in a wide array of manipulations and fuzzy-math in an effort to convince us that the price increases we’ve seen in stores, restaurants and gas stations over the last decade are merely a figment of our imagination.
“What we get from the government when it comes to inflation is not information, it’s propaganda. “
Citing anecdotal evidence because of a complete lack of transparency from the Fed, BLS and government as a whole, Schiff points to the “Big Mac Index,” which has tracked the price of a McDonald’s Big Mac at restaurant chains across the world for decades.
Because McDonald’s caters to tens of millions of customers yearly and offers food at a fairly low cost compared to others in the food service industry, it is a fairly insightful gauge of consumer activity.
According to the Big Mac Index, and contrary to the government’s claims of stable prices, since 2003 when the Federal Reserve really began cranking hundreds of billions of dollars into an already troubled financial system, the price of inflation is more than double what is being claimed.
The Big Mac has gone up by over 6% per year, yet the government claims CPI is only 2.5% per year. So something’s wrong. Either something’s changed at McDonald’s, or something has changed in the way we report inflation. And I trust a hamburger more than I trust the U.S. government.
That price [of the hamburger] went up in line with the CPI for sixteen years, and then in 2002 they started to diverge.
What’s the explanation?…
And the “chained CPI” will make it worse!