Deflating Inflation

440
100
Thu, Oct 13, 2011 - 10:08am

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:

https://www.shadowstats.com/

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

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  440 Comments

Shill
Oct 13, 2011 - 1:36pm

Enjoy this great

Enjoy this great compilation.

.

The History of Central Bankers - The Creation of the Federal Reserve (1865 - 1913)

Part 1 starts at the bottom.

Enjoy.

Moderator Jane
Oct 13, 2011 - 1:37pm

Herman Cain Posts are Being Moved to Politics Forum

Let's keep the 2012 election arguments off the main blog and use the forums for that:

https://www.tfmetalsreport.com/forums/politics-and-2012-elections

I'm moving the last two Cain posts to the forums. Please continue the discussion in the forums.

ewc58
Oct 13, 2011 - 1:38pm

Tell me Bozzz

Is what we saw what we got with Owebombya? Caveat emptor.

When in doubt, refer to the plaque that Shill just posted above.

And yeah, how 'bout that Iran "story"? Like I said yesterday, they're already walking it back.

Believe nothing from these nice folks and we'll be just fine.

altman2 ewc58
Oct 13, 2011 - 1:39pm

Debt money is contracting, Non debt money is expanding

So, you have deflation on things that depended on the money created by credit, like housing. You have inflation where things were paid for by all other forms of money which did not depend on credit, like commodities.

ewc58
Oct 13, 2011 - 1:40pm

seems I just snuck that one in CJ :-)

didn't see your post. And anyway, not really about Cain per se.

Maryann
Oct 13, 2011 - 1:45pm

Ice cream.....

Cali lawyer, here in the south the premium ice cream is Blue Bell. They pride themselves on selling 1/2 gallon, while yes, everyone else is shrinking their packages. My kiddo loves Blue Bell. Last summer I would buy it on sale for 2.99. I'd stock up. This year the sale price is 3.99. I did buy an ice cream maker but haven't found a recipe I like, and with the price of cream up, who knows if that would save anything anyway.

BOG, your videos crack me up! : D

And toilet paper, well, they just made the inside cardboard rolls larger!!

Shill
Oct 13, 2011 - 1:47pm

Mortgage rates rose today

Mortgage rates rose today folks At some point the rate hikes are not going to stop. When price inflation becomes more obvious, rates will soar. The opportunity to lock in current low rates is not going to last much longer.

As one can clearly see in this afternoon session TBT is rising again. And it looks like the DXY wants to take a dirt nap. Dollar longs take note.

https://www.marketwatch.com/investing/fund/tbt

https://www.marketwatch.com/investing/bond/10_year

https://www.marketwatch.com/investing/index/DXY

Aram
Oct 13, 2011 - 1:48pm

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

Key Economic Events Week of 8/5

8/5 9:45 ET Markit services PMI
8/5 10:00 ET ISM services PMI
8/6 10:00 ET Job Openings
8/8 10:00 ET Wholesale Inventories
8/9 8:30 ET Producer Price Index

Key Economic Events Week of 7/29

7/30 8:30 ET Personal Inc/Spending & Core Inflation
7/30 10:00 ET Consumer Confidence
7/31 8:15 ET ADP employment
7/31 2:00 pm ET FOMC Fedlines
7/31 2:30 pm ET CGP presser
8/1 9:45 ET Markit Manu PMI
8/1 10:00 ET ISM Manu PMI
8/2 8:30 ET BLSBS
8/2 10:00 ET Factory Orders

Key Economic Events Week of 7/22

7/23 10:00 ET Existing home sales
7/23 10:00 ET Richmond Fed Manu Idx
7/24 9:45 ET flash Markit PMIs
7/25 8:00 ET Count Draghi/ECB policy meeting
7/25 8:30 ET Durable Goods
7/25 8:30 ET Wholesale Inventories
7/26 8:30 ET Q2 GDP first guess

Key Economic Events Week of 7/15

7/15 8:30 ET Empire State Fed Index
7/16 8:30 ET Retail Sales and Import Price Index
7/16 9:15 ET Cap Ute and Ind Prod
7/16 10:00 ET Business Inventories
7/17 8:30 ET Housing Starts and Building Permits
7/18 8:30 ET Philly Fed
7/19 10:00 ET Consumer Sentiment

Key Economic Events Week of 7/8

7/9 8:45 ET Fed Stress Conference, three Goon speeches
7/10 8:30 ET CGP Hump-Hawk prepared remarks
7/10 10:00 ET CGP Hump-Hawk House
7/10 10:00 ET Wholesale Inventories
7/10 2:00 ET June FOMC minutes
7/11 8:30 ET CPI
7/11 10:00 ET CGP Hump-Hawk Senate
7/11 12:30 ET Goon Williams
7/12 8:30 ET PPI

Key Economic Events Week of 7/1

7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 10:00 ET Construction Spending
7/2 6:35 ET Goon Williams
7/3 8:15 ET ADP June employment
7/3 8:30 ET Trade Deficit
7/3 9:45 ET Markit Services PMI
7/3 10:00 ET ISM Services PMI
7/3 10:00 ET Factory Orders
7/4 US Market Holiday
7/5 8:30 ET BLSBS

Key Economic Events Week of 6/24

6/25 10:00 ET New Home Sales
6/25 1:00 pm ET Chief Goon Powell
6/25 5:30 pm ET Goon Bullard
6/26 8:30 ET Durable Goods
6/27 8:30 ET Q1 GDP final guess
6/28 8:30 ET Personal Income and Consumer Spending
6/28 8:30 ET Core Inflation
6/28 9:45 ET Chicago PMI

Key Economic Events Week of 6/17

6/18 8:30 ET Housing Starts and Building Permits
6/19 2:00 ET FOMC Fedlines
6/19 2:30 ET CGP presser
6/20 8:30 ET Philly Fed
6/21 9:45 ET Markit flash June PMIs

Recent Comments

by SawgrassSilver, 10 min 36 sec ago
by Winder, 1 hour 3 min ago
by seneca sam, 1 hour 4 min ago
by lakedweller2, 1 hour 22 min ago

Forum Discussion

by NW VIEW, 1 hour 30 min ago
by sierra skier, 7 hours 48 min ago
by NW VIEW, 8 hours 49 min ago
by Porros, Aug 21, 2019 - 5:00am
by sierra skier, Aug 20, 2019 - 5:12pm