Deflating Inflation
Mrs F returned from a trip to Target yesterday, full of vim and vigor regarding the prices of everything she had to purchase. I explained to her that the U.S. government deliberately understates the true rate of inflation and then proceeded to explain why they do it. It then dawned on me that many of you could use a refresher, as well.
It's quite simple, actually, but first you need some background. You've likely heard me mention the economist, John Williams, before. If not me, then you've certainly seen Santa make reference to him. John's site is:
On his site and through his subscription service, John goes through the painstaking process of re-calculating "official" U.S. government statistics based upon the methodology used when the statistics were originally created. John was interviewed by Glenn Beck back on Tuesday and here is s link. The interview is brief but, if you're unfamiliar with John's work, this will help get you up to speed. (And please don't fill this thread with comments about Glenn Beck. I like Glenn but it's the message, not the messenger. Got it?)
Now that you know how government statistics have been reformulated and manipulated over time, you need to know why. The answer is quite simple, really. MOPE. Perceptions must be "managed" in order to keep the entire Ponzi afloat.
Think of how many times you hear total U.S. debt expressed as a percentage of GDP. How many times have you heard pinheads like LIESman tell you that "overall U.S. debt, when expressed as a percantage of GDP, is not that big of a deal. In fact, it's quite low. No problem here!"
Think of how many times you've seen our esteemed chief executive or one of his minions come out to trumpet the "outstanding jobs growth and unemployment rate". "Yes, 9% is a high number but, historically, it's not too high to be overcome".
Most importantly, think of how many times you've heard it declared that "inflation remains relatively tame". "The CPI was this but ex food and energy it was that" and all is well. But yet you head off to the market like Mrs F and you see that milk, which a few months ago was $3.19/gallon going for $3.69/gallon, and you wonder how this can be true.
Of course the answer is, it's not true! It's all BS! Think about the inflation numbers specifically. If the true rate of inflation was allowed to be published, would the 10-year note be trading at a yield of 2%? Would the 30-year bond be trading at 3%? Of course not! If inflation is really 10%, the real (inflation-adjusted) annual return on the 10-year note is -8%. Over the life of the note, the holder sees their purchasing power guaranteed to diminish by about 2/3. What kind of mindless fool would buy this? NO ONE! If the actual rate of inflation was accurately disseminated, the yield on the 10-year note would have to soar to 12%, maybe even 15% just to attract buyers. Double-digit interest rates would make servicing the current debt virtually impossible. The overall debt and deficit would immediately soar to truly unsustainable heights and the Great Government/Financial/Military Ponzi would unravel almost overnight.
So, the statistics must be distorted and spun in the government's favor. There is no other option.
However for you, my dear reader, there are options. Understand that what you've just read is true and plan accordingly. This system of lies and deceit will, eventually, fail. In the meantime, you will have accumulated extra hard assets. Everything from land to rice to gold and silver. You should accumulate these things now before they become too expensive to be purchased in bulk.
Shakespeare once wrote: "Truth is truth. To the end of reckoning." And so it shall always be. Prepare accordingly. TF


Comments
Markets are programmed with respect to....
Numerology......
Bernanke is Lying
Jim Rogers: Bernanke Is Lying to Us
In the EPJ Daily Alert, I have been pounding away at the fact that no new QE is required, that the money supply (M2) is exploding. Rogers correctly points to this money growth in the clip below.
Also, Larry Kudlow is correct in his view that the European Central Bank is likely to join the Fed in the money printing. If they do, it will be the first time ever that the world could face a massive global inflation.
Kudlow is correct that the stock market will skyrocket under these conditions and Rogers is correct that commodities will soar.
Prepare yourself for climbing prices like you have never seen before, to differing degrees both Rogers and Kudlow know what is coming.
Tried looking for the definition
What is MOPE?
most people
most people i speak with think that money is printed BECAUSE of inflation,
not that printing money CAUSES inflation.
most are living under a rock, believing everything the TV tells them. its sad really.
ill keep stacking metals and im starting to look into buying things that produce energy (solar, wind etc)
MOPE = Management of Perception Economics
Turd explains it in his posting above, it is defined as managing a population's perception of the economic situation such as to prevent or delay their realization of the actual economic reality.
prices dropping
prices of photovoltaic screens (solar panels) are dropping. now that the govt is offering a 30% tax credit on the installation of solar systems, this is becoming a very attractive option. during the day the sun shines and the screens turn it into power which feeds into your system, and back on to the grid. this makes your meter run backwards. ideally, it runs backwards in the day as much as it runs forward at night. net electric bill = nil.
i'm in the midst of a roofing upgrade preparatory to putting up my first solar array. i'm not sure, but i think the numbers will work out to it paying for itself in seven or eight years. crunching the numbers in hindsight in a few years will be more realistic.
yet another way to get ready for the approaching sh*tstorm.
(No subject)
MOPE
I was wondering too! Turns out it is Management of Perceptions Economics.
Ooops, someone has already replied.
Another reason the government
Another reason the government has distorted the inflation rate lower for several years is to keep cost-of-living increases for social security recipients to a minimum.
Great stuff TF
Thanks!
Just when it looks like the
Just when it looks like the EFSF would go through unimpeded, don't count Slovakia out yet...
A SLOVAK TWIST: SLOVAKIA'S SULIK ANNOUNCES EFSF VOTE HAS TO BE ADOPTED BY CONSTITUTIONAL COURT FIRST
http://www.zerohedge.com/news/slovak-twist-slovakias-sulik-announces-efs...
Deflation
Seems to me, part of that MOPE is giving the allusion of deflation in the markets. For example, people see house prices falling and cry "deflation". Yet when it comes to everyday expenses (gas, electricity, groceries, etc), inflation is the flavor of the month. And if you're a homeowner, you're getting brutalized on both sides. I bought my current home in 2001 for $220k....ten years later, it's back to its original worth of $220k (and that's assuming I could find a buyer at that price, which is a big assumption). My income, which I'm grateful to have, hasn't improved in the past three years, yet my grocery bill continues to surge in spite of my reliance on sales, coupons, etc.
If mainstream America isn't aware of this inflation/deflation dichotomy now, I guess we'll have to be homeless and starving before we realize the fleecing we've all taken. This is well beyond frogs in boiling water...there's no subtlety amidst the lies anymore.
If the correct inflation
If the correct inflation figures were used when clalculating GDP then the west has been in a depression for years. Green shoots.... Recovery.....Iranian death plots.....WMD .... Hang on! News just in. Skippy says the kids are trapped down the mine. We need some truth. Real truth. Elect skippy
Agree with Mrs. F...
I have been "couponing" for the last five years. Up until about a year and a half ago, it was possible to get some items for almost free or even occasionally free when taking advantage of sales, manufactures coupons, and store coupons. My Kroger that used to double and triple coupons has stopped doing that. The manufacturers coupons are not as good as they used to be or as frequent.
I still don't pay "retail" for most food and health and beauty items, but it requires more effort and creativity. I do still find that produce can be bought cheaply at ethnic food markets (or price match at Wally-world), and Aldi's has good deals on basic items and good meat mark-downs. Turd is right, though, now is certainly the time to stock up if you haven't already started. There are lots of good free web sites to help you find coupons and store deals.
Good one TF
Good to see you return to your roots. You are at your best when doing posts like that. Picking tomorrows price of silver is a mugs game.
Seen the price of butter lately? Holy Schnike's!!
And it may be this way for a
And it may be this way for a long, long time. As long as the Banks are well capitalized and your lucky enough to have a job and earn a paycheck to stay afloat well this is our direction going forward, until something gives. Until that time get use to this up and down motion across all markets.
Inflation!
The price of unleaded gas in our town went up 10% overnight! I knew it was coming based on my education here in Turd's outhouse and the recent increase of the /CL futures prices, but it is still shocking. Sure am glad that we ordered gasoline yesterday to fill our tank next to the barn. My wife and her sister are canning chicken and all kinds of dry goods today. We have cooled down on the silver purchases to focus on food for a while. but I will take advantage of any potential beatdown in silver if it comes. The MOPE that you point out Turd is simply unbelievable! But most people in this country let them get away with it.
Happy Trading today!
@ EO
That's what I've noticed lately Eric--anything dairy has taken the parabolic rise we hope silver will someday have. Milk and butter and cheese...oh my!
MaryAnn
Drought in coupons this summer for sure, but don't you think there's been a little uptick over the past few weeks? That's what I'm seeing, and I'm restocking the bunker.
The politicians have to be
The politicians have to be able to say they did everything necessary to appease the constituents under that constitution (and to also defend themselves from the mob - "it wasn't us, we did it by the book." defense).
Once that formality has been cleared, the Fund gets its approval.
That is my personal view on Slovakia. It is a matter of political expediency and process forced on them that just delays the eventual result. Again, this is just my personal opinion as there is just no way I can see the Euro going down through the actions of such a small Euro player like Slovakia (no disrespect to the country nor its citizens).
It will be interesting to see how it actually turns out but if I had to go for a result, i would go with the one I have laid out above.
Elf
No kidding. Screw gold and silver. Start stacking butter and cheese!
and with inflation (err, CPI) low
coli in many industries is kept low
CPI is more or less a spending index, not an inflation index. You cannot afford steak you buy hamburger meat. And with imports thats been kept low too. Think TVs and PC's etc. But the everyday stuff--food energy education, medical care--where folks spend most of their money--is skyrocketing. Although on medical care technology, not cheap, is much better than 20-40 years ago.
ISGR--is a company that makes machines for non invasive prostate cancer surgery--each machine cost over a million. How do you factor in that cost benefit.
Senator Mark Kirk sent an e mail out today to illinois residents about how bad things in Illinois are financially. Bummer-The state should go BK and do a workout re-negotiating everything. And then live within its means
Herman Cain's BIO & resume is worth reading.
There's a whole lot more to this guy than "former Pizza man", as the MSM sums him up.
Check it out at wikipedia.
CAIN/PAUL 2012?
Speaking my language
I'd suggest thinking even beyond the food/land/medical/defense stuff, too. Tools, building/repairing materials, ladders, storage bins, buckets, work gloves, clothes.
We're awash in 'stuff' now and it'd be a shame for all the hard work of all those Chinese workers to not make its way into your supplies before they decide that another arrangement is in order.
Thanks Turd
I appreciate the subject for today. And, more importantly, it seems to generate responses that are of more interest to me.
Breaking on CNBC: Slovakia
Breaking on CNBC: Slovakia says YES.
Glad we got that out of the way. I can get on with my life now. Have to go grocery shopping. How's that for timeliness on today's thread!
Deflation
You can always head over to Mish's site and get your fill of that topic there.
Gallon of milk in Maui? Try $8 (when not on sale). Loaf of bread? $6...
I'm not joking.
BREAKING Slovak parliament
BREAKING
Slovak parliament approves EFSF expansion: reports
Slovakia
Richard Sulik of the SaS may have failed to bring the question of constitutionality to bear on the ESFS vote. A new vote appears now be scheduled for the next few minutes.
What's interesting to me, is that some members of parliament voted FOR the measure last time in hopes of preventing the current government from falling.
Those votes are now free to vote against the ESFS expansion since the fall of the government has already happened. It's unlikely that there are enough of those to overcome the 62 votes Smer witheld in the last vote (which are now, at least verbally, committed to a "yes" vote....but....we should know in a few minutes.
This isn't quite as "in the bag" as it appeared two days ago....
OxyMoron Activism.
Just got back from a bike ride & was reflecting upon my influences lately & I deviate slightly from my normal influences, regularly to hear consensus from different realms. So, yesterday I tried out this interview with Cliff High, on the whole webbot thing, he's got going on and he was saying that we're going to see food & energy prices go up, however other stuff won't be expensive, so it'll be confusing to people. OK, so that was along the lines of what I've been thinking.
Then, I started thinking about the whole Occupy Wall Street/ Boston, etc.. and from looking at friends on facebook, the same people who are going to all these 350.org (Cap Carbon, etc), seem to be the same people who are going to these Occupy rallies.
So, on one hand, their saying.. carbon taxes (yay) and then, the next weekend, their occupying Boston saying you 1 percent are making it difficult for the little guy, we want economic freedom, etc.. (& Carbon Taxes). The two (2) stances just totally conflict. So, I reflected more & I'm like, most of these people that I know, I feel like their re-living their view of the 60's.. (with a drive to be like, 'I was there'), I occupied wall street. Much like relatives of mine are able to say they went to Woodstock.
It seems like most people have no idea what they stand for, because their caught up looking to be actively involved in something; without really grasping the fundamentals of what they stand for, as individuals. What's the phrase I'm looking for.. Oxymoron?? & these are my friends (yikes)!
CORRECTED-UPDATE 2-Ireland
CORRECTED-UPDATE 2-Ireland warns on euro zone banks 'dumping' assets
| Reuters
WASHINGTON (MarketWatch) -- The Treasury Department said Thursday it plans to sell $7 billion reopened 30-year bonds next week. 30_YEAR -1.94% . The auction will take place on Thursday.
Just in - Slovakia Passes EFSF Expansion Vote
According to ZH:
Slovakia Passes EFSF Expansion Vote
Submitted by Tyler Durden on 10/13/2011 - 11:10 Slovakia
Well, that's that.
Now: perhaps we can finally get some details of what will happen next instead of just blind short covering squeeze on rumor-based headfakes?
Yes Eric....
In fact I did notice that there were quite a few coupon flyers in my paper this past weekend. They do seem to ebb and flow. There is a 12 week cycle in types of foods that go on sale, for example paper towels and toilet paper will be at their lowest every three months so when I started couponing I would try to buy enough of that particular item to last that long. Now I am doing a little longer storage but you still have to rotate or you will need to add on to your house.
Yes, dairy has gone up a lot but I find my Aldi's has the best prices on milk, usually around $2.00 a gallon. Eggs too, although sometimes they are cheaper at the ethnic food mart. I could talk all day about this so I'll stop now!
Ok one more thing. Yes Dr. J to canning! I have just started learning and I am so proud of my canned chicken .
@EricO
Butter expensive?
It's a good thing American's didn't have to use Cherries this summer to fill up their cars. The prices were ridiculous!
Cycles of Gold
http://www.economicfreefall.com/2011/10/gold-and-silver-cyclical.html
Sorry
http://www.economicfreefall.com/2011/10/gold-and-silver-cyclical.html
Edit: Sorry for posting it twice...donno if it's possible to delete one of them.
Edit 2: Well, better with another chart at least;) Did a so called swap.
Explaining
Is almost pointless.
People are going to have to see their disposable income get eaten up and the balance on their IRA's at $8 before they do anything substantial. They have to experience it. They say it takes 10 years to get cancer, but what that really means is the 90% of the disease progression goes unnoticed. It's not until the pain and suffering drops to them to their knees that they take action. With the Lamestream media providing the distraction, it's not until it's too late that people finally realize something is truely wrong.
It's not bad, it's not good. It's needed. It has to be this way. Get out of the way and let it happen.
Dairy rising?
And y'all wonder why I have goats?
Ta,
Cain?
He is a pitiful joke. Nice try.
Pining, Perfidious, Xty...
Thanks for your help in all of that M2 conversation. You bring up some good points Pining how this goes forward and at what rate they keep doing this. There's no way to know of course, but generally speaking , things are accelerating a bit as is the scope.
We talk about a $1,000,000,000 like it was $1 million and Trillions like we used to talk about the Billions not that long ago. If the reference points are starting to become that distorted already then it seems like the hyper inflation aspect is under way but in a very stealthy way and in the beginning stages.
Kind of what TF just described above and the MOPE conversation I see developing.
Were at the point where we talk about $500 Billion or $1 Trillion not being enough to offset this or add to that etc. It's getting a bit more distorted as there is more room being created for distortion and proportion to take place. The higher the M2 and debt ceilings allows more room for the chaotic swings.
At this rate, at some point in the next 10 years (not so wild a guess maybe) we'll be talking about about some things in terms of trillions or tens of trillions like it's no big deal. If every country doesn't expand or allow all other countries to creatively fix and expand their money/credit supply then we're screwed and it all resets.
I don't think that happens. I think they keep kicking the cans down the road together and grudgingly accept it as long as someone doesn't kick theirs too far ahead or doesn't lag too far behind. I think they've decided to to try and kick in unison. That's why the CB coordination is vitally important. It either all works together due to the massive currency swaps going on or the system fails quickly. Game over. Global war on.
I don't think that happens (sheer hope). I believe the decision to let Iran be the next one in this 10 year cycle is what's next and not anything global. Doesn't it strike anyone as odd that as much as the U.S. and Russia and China etc. butt heads over big issue's that in the end at these U.N. Security Council votes that they often go along with us or for the most part when it comes to military action they don't directly veto it?
There must be some trade off on a grand scale behind closed doors or diplomatically well ahead of time. (China premiere WH visit Jan 2011) The U.S. already has a green light for Iran imo from the others as long as trade continues and each country can get away with whatever the other countries let them in exchange for this to happen.
That's how I see it. Russia has Billions upon Billions invested in Iran and Syria. As does China. And yet they'll allow it. Ever wonder why?
It's the game of Stratego and RISK I've outlined before except in real life and metaphorically speaking.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Ill let you keep doing the art thing Perfidious. You have good tastes and it's just random enough that it's well done imo.
If you, or anyone else has some great classical music, please post it on my music and vid thread. I forgot to link the thread...hold on.
http://www.tfmetalsreport.com/forum/2366/planet-dph-life-display-247
Workers aren’t getting
Workers aren’t getting raises, while food and fuel prices crimp budgets
http://www.businessweek.com/magazine/having-a-job-aint-all-its-cracked-u...
It appeared that there had
It appeared that there had even been demonstrations to thank Big Brother for raising the chocolate ration to twenty grams a week. And only yesterday, he reflected, it had been announced that the ration was to be reduced to twenty grams a week. Was it possible that they could swallow that, after only twenty-four hours? Yes, they swallowed it. Parsons swallowed it easily, with the stupidity of an animal. The eyeless creature at the other table swallowed it fanatically, passionately, with a furious desire to track down, denounce, and vaporize anyone who should suggest that last week the ration had been thirty grams. Syme, too-in some more complex way, involving doublethink, Syme swallowed it. Was he, then, alone in the possession of a memory?
Food shoping
have you gone food shopping lately. I don't know how families afford it. I'm just one person and I've notice that when i go shopping I get almost nothing for $50. nothing. 5 years ago I used to get a lot for $50. It must costs hundreds of dollars for a family of 4 or 5 for one weeks worth of food. Two years ago I use to get a bagle for .50 cents. it's now doubled. that's inflation right. don't give me deflation. Although maybe it's stagflation.
Fruits are up, veggies are up...Coke and pepsi are even up. It aint getting better. And those with families it's going to be very difficult.
Notice the lock step b/t JPM and silver price?
Super tight coupling.
Peanut Butter Prices Are
Peanut Butter Prices Are Rising By 24 to 40 Percent
Doing this may get a little expansive. :)
MOPE
Turd 2012
Slovakia
Anyone who truly believes Slovakia is going to be the impetus of "doing the right thing" is seriously delusional. It's Slovakia for Christ's sake. I wasn't even aware of its existence until this week.
Money printing will continue, on both sides, above and below, in and out. Devalue devalue devalue.
These aren't my ideas, wish they were, it's just the knowledge I've gleaned from reading every post on here and other sources.
*Looks like Slovakia did capitulate 20 minutes ago. Wow! I honestly didn't know until I went over to zerohedge after writing the above comment.
HeNateMe
The Ascent of Money - A Must WATCH!
Based on the book by Neills Ferguson "The Ascent of Money-The Financial History of the World" Somebody uploaded the Netflix DVD to YOUTUBE-
Learn why Jim Sinclair's Fibanocci Numbers Are Important
The role of money and gold and silver throughout the entire history of money.
Find out the historic roots of the historic 2008 Credit Crisis.
How the Medics and Rothschilds came to power as banking families
Why history tells us that a huge financial crisis is imminent.
ivars
so far so good...silver trading at 30 plus minus 3
I'm off to the grocery store!!!...
I'll see you there!!!...


Bag Of Gold