Inflation About To Explode Higher by Jim Quinn | October
“Those who are
capable of tyranny are capable of perjury to sustain it.”
― Lysander Spooner
We all know the BLS artificially
suppresses the CPI through bullshit substitution adjustments,
quality adjustments, and various other incomprehensible
hedonic adjustments made by government apparatchiks at the
behest of their politician bosses. Some obscure theoretical
academic calculation called owners equivalent rent accounts
for almost a quarter of the CPI weighting.
It has no relation to reality as it has
increased by only 12% since 2012, while the Case-Shiller
Housing Price Index is up 52% over the same time frame.
The median price of existing home sales is up 30% over the
same time frame. It also has no relation to rent increases,
as they have gone up 22% nationally since 2012. It’s essentially
a made up number by goal seeking bureaucrats doing the bidding
of their establishment masters.
Prior to Greenspan and his cronies getting
their grubby little non-callused academic hands on it in
the 1980s, CPI reflected measuring the cost of maintaining
a constant standard of living, as measured by a fixed-basket
of goods. The purpose of all these adjustments and calculations
has been to systematically repress the reported level of
inflation as a way to keep the Social Security system solvent,
allow the Federal Reserve to keep interest rates falsely
lower for their banking cartel owners and the biggest debtor
on the planet – the U.S. government, and to conceal from
the average American how far their standard of living has
fallen. It ain’t working.
Myths, Misunderstandings and Outright
lies about owning Gold. Are you at risk?
The average household might not know real
median household income is at the same level it was in 1989,
but they know they are treading water on a daily basis –
using credit cards to sustain themselves while paying 15%
interest to the Wall Street banking cartel.
They know their wages are stagnant and their
everyday costs relentlessly rise. Real hourly wages, using
the fake CPI, are up just 1.4% in the past year. In reality,
using an accurate measure of inflation, real wages are falling.
The government can tell them inflation is only up 1.5% in
the last year, but they know better. Their real everyday
inflation is north of 4%, as measured before the 1990 coverup
began. Now, even the BLS is starting to lose control of
the narrative of no inflation.
Even the suppressed, manipulated,
massaged and adjusted CPI has gone up at an annualized 3%
rate over the last two months. Core inflation, which the
Fed supposedly basis their interest rate decisions upon,
has run at 2.2% over the last year, and has exceeded the
Fed’s 2% mandate for 11 straight months. As you can see
in the chart above, medical care costs are skyrocketing
due to the disastrous Obamacare train wreck. Medical-care
prices are up 4.9% in the past year, including a 7% jump
in prescription-drug prices (a 24-year high). Medical care
commodities are up 5.2% and poised to go higher.
Obama declared to the American
people his Obamacare plan would cut the annual average household
insurance premiums by $2,500. This bald-faced lie by the
slimy snake is revealed in the chart below showing health
insurance CPI is up 29% since Obamacare was rammed down
our throats. Of course, these fake BLS figures drastically
underestimate the true increases, as most hard-working families
have seen their premiums rise in excess of 100%, with deductibles
increasing by 500%. Close enough for government drones.
But, at least they got to keep their doctor. Right?
But the fun has just begun.
As Obama takes his victory lap, his prized piece of legislation
is collapsing under the weight of government incompetence,
outrageously high costs, lack of choice, and not enough
young fools willing to pay through the nose for the benefit
of lazy, obese, free shit army members. If you thought the
5% medical cost inflation was bad, how about 25%? That will
be the average increase for Obamacare plans come November,
with 9 states having rates growing by 40% or more.
The BLS not only under-reports
actual medical cost inflation but under-weights it in their
CPI calculation. It’s almost laughable they give it only
an 8.5% weighting when it accounts for at least 15% of the
average household’s expenses. Nothing reported by the government
or bloviated by a corrupt politician can be believed. I
was reminded of an Obama whopper during the debate this
week when Hillary declared her ridiculous economic plan
wouldn’t add a cent to the national debt.
As he was doing his best
snake oil salesman routine in 2009, Obama promised Americans
his government controlled health insurance plan wouldn’t
add one dime to the national debt. He was right. According
to the CBO, it will add 14 trillion dimes ($1.4 trillion)
to the national debt over the next ten years. How naive
and mathematically inept does one have to be to believe
these sleazy power hungry control freaks? Evidently, more
than half the willfully ignorant populace will believe anything
they are told to believe. Dumber Together.
This brings us to rent,
which has taken off like an Elon Musk government subsidized
rocket ship, due to the Fed and Wall Street’s collusion
in turning foreclosures into a windfall of rental income
for connected Wall Street hedge funds. The purposeful limiting
of foreclosure housing supply has driven prices to such
astronomical heights, first time home buyers have been completely
priced out of the market. Wall Street scam artists gleefully
rent out the vacant houses to the people they kicked out
of those houses. This has driven up the demand for rental
units, resulting in rents jumping by 4% to 8% annually across
the land and especially in major metropolitan centers.
What is again laughable is how the BLS weights
rental housing versus owned housing. The U.S. home ownership
rate of 62.9% is the lowest rate in over 50 years. So much
for Bush’s ownership society. If the percentage of people
renting is the highest in 50 years and owning lowest in
50 years, why would the BLS only weight rent at 7.7% of
CPI and owners equivalent rent at 24.2%? Again they are
purposely under-weighting an expense that is rising at a
far greater rate than their beloved 2% goal.
Lastly, we get to the expense which is about
to go vertical and give the old CPI calculation a drastic
boost upwards. Yellen and her cronies have been riding the
low oil price gravy train for the last 18 months, giving
them cover to not raise rates because inflation was below
their fake propaganda goal of 2%. The plunge in oil prices
from $100 a barrel in August 2014 to below $30 a barrel
in February of this year gave the Fed another excuse to
delay increasing rates so their Wall Street owners could
continue to feed at the trough of national wealth like never
satisfied bloated hogs.
The year over year oil and gasoline decreases
of 6% to 10% which have been suppressing the CPI calculation
are about to turn into 10% to 60% year over year increases
for the next six months, unless oil prices plunge again.
Gasoline prices are already up 30% from the February lows.
Transportation costs account for over 15% of the CPI calculation.
Household fuel and utilities account for 5% of the calculation.
In case you have forgotten, a major cost of food is transporting
it to grocery stores. These year over year increases in
energy costs will reverberate throughout the economy.
The official manipulated, massaged, seasonally
adjusted and suppressed CPI is going to rocket above 2%
into the 3% to 4% range. Janet and her cronies are already
working on a dozen new excuses about these increases being
transitory and not a reason to increase rates. I’m sure
some new global crisis will arise, forcing Janet to delay
again as instructed by her establishment masters. But they
assure us the economy is growing, employment is booming
and all is well.
In the real world where the deplorables
live, senior citizens are going to get a $4 annual increase
in their Social Security payments in 2017 (somehow the government
gets away with a 0.3% increase when their own numbers show
a 1.5% increase), while Janet allows them to earn .15% in
their money market accounts. In addition, their medical
cost inflation is exceeding 10%. Two of the largest expenses
for a senior citizen are rent and medical costs. Maybe this
is the equivalent of the Obamacare death panels. I guess
granny will have to decide between her heart medicine and
Ramen noodles with a side of Friskies for dinner.
With real wages stagnant below 1.5%, rising
energy costs, soaring medical costs due to Obamacare, record
high home prices and rent expense due to the Fed, the average
new car price at a record $34,000, and food prices rising
steadily, the standard of living of the irredeemables continues
to plunge. But at least our taxes will be going up if Hillary
and the establishment have sufficiently rigged the election
to insure her victory. Sit back and enjoy our journey to
third world status.