Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Inflation About To Explode Higher

Economics / Inflation Oct 22, 2016 - 09:08 PM GMT

By: James_Quinn

Economics

“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.

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 every day 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.

Join me at www.TheBurningPlatform.com to discuss truth and the future of our country.

By James Quinn

quinnadvisors@comcast.net

James Quinn is a senior director of strategic planning for a major university. James has held financial positions with a retailer, homebuilder and university in his 22-year career. Those positions included treasurer, controller, and head of strategic planning. He is married with three boys and is writing these articles because he cares about their future. He earned a BS in accounting from Drexel University and an MBA from Villanova University. He is a certified public accountant and a certified cash manager.

These articles reflect the personal views of James Quinn. They do not necessarily represent the views of his employer, and are not sponsored or endorsed by his employer.

© 2016 Copyright James Quinn - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

James Quinn Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules