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Inflation Is More Than Double The CPI At 8%

From CBS News, of all places:

Inflation: Not as low as you think

By Kathy Kristof
February 29, 2012

Forget the modest 3.1 percent rise in the Consumer Price Index, the government’s widely used measure of inflation. Everyday prices are up some 8 percent over the past year, according to the American Institute for Economic Research.

The not-for-profit research group measures inflation without looking at the big, one-time purchases that can skew the numbers. That means they don’t look at the price of houses, furniture, appliances, cars, or computers.

The falling price of houses being the main reason that the government claims there is no inflation. People should rejoice that their house is worth less every year. It makes paying more for gasoline and food so much easier.

Instead, AIER focuses on Americans’ typical daily purchases, such as food, gasoline, child care, prescription drugs, phone and television service, and other household products.

Food and gasoline being among the ‘core inflation’ items the government carefully ignores in its Consumer Price Index.

The institute contends that to get a good read on inflation’s "sticker shock" effect, you must look at the cost of goods that the average household buys at least once a month and factor in only the kinds of expenses that are subject to change. That, too, eliminates the cost of housing because when you finance your home with a fixed-rate mortgage, that expense remains constant until you refinance or move.

The group maintains that this index better measures the real-world impact of price changes, particularly for people on a budget. And, largely as the result of the recent run-up in gas prices, this "everyday price index" (EPI) suggests that Americans are being pinched far more tightly than the official inflation measure would have you believe.

Over the past year, the EPI is up just over 8 percent, according to the economics group. The biggest factor: Motor fuel and transportation costs are up 21.06 percent from year-ago levels. The cost of food, prescription drugs, and tobacco also have increased faster than the government’s inflation measure, rising 3.56 percent, 4.21 percent, and 3.4 percent, respectively

Which is quite a surprise, isn’t it?

In fact, it’s almost as if our government lies to us about the state of the economy.

This article was posted by Steve on Friday, March 2nd, 2012. Comments are currently closed.

2 Responses to “Inflation Is More Than Double The CPI At 8%”

  1. River0 says:

    Of course it is. It has to be, since the Federal Reserve has been flooding the system with liquidity in the form of book-entry credit. Huge banking houses here and in Europe can get billions of dollars at extremely low interest rates. The European Union also just pumped $763 billion in book-entry credit into their system. They had to do this to avoid a depression. These actions are like the final moves in a chess game. They’re forced by circumstances and blunders made a long time ago, at the beginning of the game.

    The EU had rules about the debt load all countries would be allowed to have, but they never enforced them. Greece has been cheating for over a decade.

    Everything which is in abundance will fall in price, whether it’s wheat, oil, pork, or U.S. dollars. Everything which is in short supply will rise in price, like oil, gold, or silver. This law of supply and demand is universal throughout history and inviolable.

    Most world currencies – except for the most solvent countries like China – are going to plummet, because they are over-abundant.

  2. ld robertson says:

    drunkeness can be sobered, ignorence educated, but stupid is forever. soooo if the price of gas drops to 2bucks a gallon at some point and a gal of milk drops 50 cents and they have a big sale on the price of rib eyes we can all rejoice because the cost of living has dropped sooo verryy much. GIVE ME A BREAK

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