hyperinflationWell, I’m perplexed and befuddled. For a couple of years now I’ve been reading economic news stories like the above where it is seemingly “accepted” by the mainstream  media that the rate of inflation is “low” and contained, and, as this blurb indicates, even alarmingly so.
 But I don’t get it. Inflation, from my perspective, is high and going even higher.
I base this opinion on the prices of things (goods and services) that I actually buy.

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Submitted by Bill Rice Jr.,

Managing Editor
The Montgomery Independent

“Stubbornly weak inflation is shaping up as the wild card for U.S. monetary policy makers this year, with top Federal Reserve officials stumped by why it has lingered so low for so long and at odds as to what to do about it.  … inflation has been drifting down for much of the last two years, measuring a feeble 1.1 percent in November by the Fed’s preferred gauge …”

 Well, I’m perplexed and befuddled. For a couple years now I’ve been reading economic news stories like the above where it is seemingly “accepted” by the mainstream  media that the rate of inflation is “low” and contained, and, as this blurb indicates, even alarmingly so.
 But I don’t get it. Inflation, to me, is high and going even higher. I base this opinion on the prices of things (goods and services) that I actually buy.
Last week, I did the grocery shopping for the family. I used to go to Publix, but now often go to Wal-Mart (because prices seem to be soaring and I’m trying to save money).
I was floored by the price of a gallon of milk ($5.50). Instead of buying a gallon, I settled for a half gallon at $3.69 (pre 10-percent sales tax too!).
 The day before I went to Dairy Queen for lunch. I tried their deluxe 1/4-pound cheeseburger that was $5.39. I usually get the plain double cheeseburger but didn’t this time. It was $2.99. It seems like yesterday I could have gotten this modest-sized tasty burger for under $2.
 I actually made a Facebook post expressing my shock and asked my Facebook buddies if they too thought that “prices for just about everything are going way up?”
I got 30 “likes” agreeing with me and about a dozen comments saying this was their experience too. One naysayer (who actually works in the “mainstream media”) disagreed and posted a link to a website that showed the government’s estimates that inflation remains low.
He’s a friend and a smart guy, but he must have missed my point, which I’d stated in my post: Namely, I think the government is playing fast and loose with their inflation statistics (I also  think they are doing the same thing with unemployment numbers).
   Not only do I sometimes do the shopping for the family, I also pay all the bills for the family. I can’t think of one bill I pay that has gone down or remained the same.  Most have not only gone up, but increased by significant amounts. I’m talking here of utilities, car insurance, property insurance, medical co-pays, satellite TV, cell phone, etc.
   But groceries take the cake.
   Once upon a time and not terribly long ago, I remember being floored when a buggy full of groceries cost $200. Now I’d do a little two step if the “damage” was only $225.
   As a voracious reader of economic news, I of course know that there are newfangled ways to calculate “inflation.”
I’ve learned in my reading that the formula for arriving at the inflation rate has been changed numerous times since 1980.
 One constant apparently is that the prices of “food and energy” are given less weight in the calculations. To me, this makes no sense as “food and energy” are two of the largest line items in every person’s monthly budget of expenditures.
  My political hero Ron Paul has always considered inflation “the cruelest tax of all.”
  It is. Federal income tax rates for many Americans are not ridiculously high and are not being increased (yet). Government “fees” of all varieties are being increased, (just like the number of red-light cameras.) One way or another, government will get you … literally. But income taxes proper are largely constant for most income classes.
  What’s scaring people and changing the way we live is the price of everything else we buy. As Ron Paul understands, inflation hits everyone and really affects those on a fixed or low income the most (the rich can better afford price increases).
  If inflation is “dangerously low,” why are so many people running out of money earlier and earlier each month?
  The answer is we are paying more for just about everything, at the same time wages or incomes (unless you are a Wall Street Banker) have not kept up with the “real” rate of inflation.
  I guess the price of some things have not gone up dramatically. Appliances come to mind. Some items of clothes, especially at discount stores.
  House prices in Montgomery market seem to be going down, but national reports tell us that real estate prices are rising in many markets. Car prices definitely haven’t come down. In fact, a nice new car (sticker price of around $50,000) costs more than the price of a decent house in many towns and cities in Alabama.
   It’s anecdotal, but I read a reader’s comment on a website last night on this topic. He said he’s been in the “building trade” for years and can report that the prices of almost all building materials “have been heading steadily north for some time.”
  The cost of everything health and medical related seems to be sky-rocketing, just like the price of higher education. The exception in the medical field is procedures that are deemed optional and thus are not covered by insurance (like laser eye surgery). These prices – influenced by competition and free market forces – are actually going down and have been for a while (there’s a lesson here).
We’ve also certainly had “price inflation” in the stock market in the past two or so years.
  One investment category where there has been major deflation is precious metals. For example, the price of silver has plunged 40 percent in the past year!
   Some of us are perplexed by this as well. When the government is printing records amount of “fiat” currency and  debt amounts are at epic and historic levels, you would think that gold and silver (as insurance against scary times ahead) would be soaring. The opposite has instead happened. (In China and other eastern nations, precious metals are actually being gobbled up at a record pace).
   Which brings me to my theory on why inflation statistics might be bogus. Some articles maintain that the government  and Fed actually want higher inflation, but do they really?
  Think about it. If everyone acknowledges that real prices for real things are going up big-time, soon people and powerful interest groups are going to start hollering for increases in cost of living adjustments that cover the “real “ rate of increase in prices.
  Think food stamp recipients (which we have more of than ever), social security recipients (more than ever with more joining the rolls every day) and  government retirees who receive pensions (ditto).
  If Uncle Sam raised these monthly payments by, say, 5 percent (instead of 1.5 percent), the government would be even broker than it already is.
   To do this, government would have to print even more money than it already is.  “Monetizing debt” (printing money) is – or should be – inflationary.
  So the government has a strong incentive to report that inflation is low or non-existent.
  The accepted way to curb/stop inflation is to raise interest rates (which is what Paul Volker at the Fed did during the early years of President Reagan’s administration when inflation was almost 20 percent (back then, it was calculated more correctly IMO).
  Aside: using the formulas of 1980, John Williams of www.shadowstats.com says today’s inflation rate would be well above 10 percent.
  But the government (or Fed) can’t raise interest rates because it owes trillions of dollars in interest to countries that have bought our treasury bonds. Instead of paying 1 to 3 percent like we are today, we’d be paying – what? – five to 10 percent?
  This level of debt service would dwarf all other levels of spending in the federal budget. Rapidly rising interest rates might also send us into a recession if not depression.
   Not going to happen.
  The answer the powers that be have come up with (in my view) is to lie about inflation (largely by changing the way it is calculated).
 The government also – in my opinion anyway – is playing semantics with the unemployment rate, simply choosing not to count people who have “dropped out of the labor force.”
  But the press, for some reason, blindly accepts these statistics. We see no cover stories in Time or The New York Times or on the “CBS Evening News” questioning official government numbers.
  As I told someone recently, if the mainstream press is a “watchdog” it’s a toy poodle.
  Meanwhile, on Facebook, and at water coolers, people are starting to talk.
  To save money, I recently cancelled my subscription to USA Today. The nice clerk I talked to asked why.
  I explained I just wanted to save money, but I  also shared that I didn’t agree with the writers in the paper’s business section who were constantly saying inflation is low.
 I pointed out to her that the rack price of USA Today just went from $1 per copy to $2 per copy. This is 100-percent inflation.
Before the publisher made this move, the newspaper physically reduced the size of  a page of newsprint (no doubt because paper prices were increasing).
  This is another way “inflation” is concealed – sell a product for the same price but reduce the contents or size of the package.
  “Ask the person who buys office supplies at USA Today if prices are staying the same,” I told the subscription clerk.
  She said she’d pass on my comments.
  The high point of my college career was probably the two basic economics courses I took my freshman year at The University of Alabama. One semester I made a B (almost an A), the other an A. I even got a letter from the dean asking me to major in economics.
  Instead I decided to save the world by majoring in political science and writing economics columns!
  Anyway, I could have sworn that I learned that inflation is an increase in prices (or absent this an increase in money supply). Both events are happening in a glaring way right now. But still, I’m told inflation is non-existent, even too low.
  Well, this journalist is actually a skeptic and terribly confused about what constitutes inflation. Maybe I should ask for my father’s tuition money back.
  In 1983 I think a semester at UA cost about $750. I’m betting the price has  gone up a little bit since then. But this, I’m assured, is not inflation.
Bill Rice, Jr. is managing editor of The Montgomery (AL) Independent. He can be reached at: 


Bill Rice, Jr.
Managing Editor
The Montgomery Independent
334.265.7323 (office)
    • The distinction is consumer inflation (which no one denies) and business inflation. He can talk about all the gallons of milk and double cheeseburgers he wants because it doesn’t matter to big money. Our rising cost of living means very little to them. 
      Manipulated day trading, paper gold that doesn’t exist, demand through the roof (the coin shops are out!), supply at all time low (silver ore running out!), QE to infinity, currency war carry trades, empty gold vaults, all commodity manipulation and high Dairy Queen prices…YET big money is still not hedging inflation on gold’s world market. This article implies the lies of inflation data published by USA Today! Yet we are sitting w/ 1200 and 20…or maybe true inflation has not hit us yet.
      Some are claiming its the lack of money velocity. I think we need to redefine what that means because the classic formulas consisting of M1 and M2 are meaningless. Technically, gold had a strong bull run 2000-2010 on a supposed slow velocity environment. I’m with Richard Duncan’s views in that all eyes are on credit expansion and liquidity for 2014. Is possible to reach the ridiculous levels we had in the past decade? Big money doesn’t care about fiat creation if it just clears bad paper and kicking a can just as the yen, pound and euro. 

  1. All one needs to do, to see the relatively HIGH INFLATION that we’re experiencing, is go to http://www.shadowstats.com and click on CPI, and the TRUE inflation (shadowstats ’80 based) is clearly seen in the chart. The chart indicates a most current inflation rate of ~8.7%.

    The chart shows that the inflation rate today is higher than that of: Most of ’82, all of ’83, ’84, ’85, ’86, ’87, ’88, ’89. ’90, ’91, ’92, ’93, ’94, ’95, ’96, ’97, ’98, ’99, half of ’01, half of ’02, part of ’03, part of ’08, all of ’09. Therefore, in looking at the data for the 31 years prior to this one, we find that: True Inflation NOW is higher than that of all of 18 of the past 31 years; at least most of 19 of the past 31 years; at least half of 21 of the past 31 years; at least part of 22 of the past 31 years. Moreover inflation today is on par with most of ’04, ’07, and ’10. Therefore inflation has only been lower than today in a mere SIX of the past 31 years. Thus REAL inflation, measured by shadowstats.com in the correct way, is clearly relatively high since 1982.

    A good explanation of the government reporting scam of CPI data is from analyst/journalist Bob Rinear, at: http://theinternationalforecaster.com/International_Forecaster_Weekly/Faked_Numbers_Hides_The_Economic_Reality_for_Most_Of_Us
    Rinear states:

    “ALL the (government)data is corrupted, and the biggest dog of them all is the CPI numbers.

    The Government had been trying to hide inflation from us like a mom hides candy from her 4 year old. If something is going up wildly like the price of food or energy, they simply don’t include it in the readings. They say those areas are “too volatile” to be included in the measure. Hey, I don’t know about your family but in mine we need food and energy. It’s “included” in my budget for sure. But just leaving out certain sectors that don’t fit their “under 2% annual inflation” is just a fraction of the games they play. Then there’s the substitution game. In the Governments game of “hide the baloney”, if something that they measure is getting too price heavy, they switch away from it. In their words, if steak is going up too far and too fast, consumers will switch to hamburgers. Since burgers are considerably less expensive than steak, then the inflation rate has actually fallen. HUH??

    So, the substitution factor allows for wild price appreciations to take place, and they don’t have to include them in their final reading. Nope, just swap to something that hasn’t run as far. But oh wait…there’s more. Then when they couldn’t contain inflation with substitution they came up with the hedonic readings. This is like lucasion mathematics on acid. The idea here is that even if something costs more, but because it is technologically more advanced than it used to be and “could” help you produce more…then it actually can be recorded as costing less. Is that how you see the price of things? Of course not. If a Chevy “car” cost 18,000 last year, and is 18,720 this year, you don’t tell yourself it is actually cheaper because it has a better stereo system than last years. You simply say “it went up”. Why? Because it really did. But not according to the Government wonks. That car DECREASED the CPI. Go figure.”

  2. Health insurance up 16%   No inflation here
    Social Security payments adjusted by hedonics up 1.5%  No inflation here—uh huh
    Good quality reloaded 9mm ammo   $14 for a box of 50, up from $13     no inflation here
    My Sr BOB’s CCW course  $60, used to be $50   No inflation here
    Nice bottle of cabernet  $13.50 up from $12 No inflation here
    Blind Dog Coffee beans 2 lb  $12.50  up from $11.80  No inflation here
    Dave’s Killer Bread   Up about 75 cents for 2 loaves  no inflation here.
    AOL service   $31 per month, up from $30   Crikey, he still uses AOL!?   STFU—I’m a tecnoluddite
    WSJ   Who knows  I cancelled the paper version.  No inflation there
    We got a really good deal at Hedonics Supermarket
      Last month we ate chicken fried steak
    This month we eat chicken fried chicken feet and lips
    Cool stuff today.
    I worked with my SR BOB, helping with  his training
    As I trained an older gentleman, a guy who worked for the silver mines in Elko and Winnemuca for 25 yrs and is now a security guard for a refinery, fond out he reads Siver Doctors, Jim Willie, Sinclair. He’s a stacker   I think I have maybe a bit of insider intel  He follows the markets like a hawk  CHeers.

    • Friend bought the store here in town, she is very open to barter plus she is moving in a lot of locally grown stuff. Most of it organic. So I have been trading some laser engraving and computer work for eggs, locally made bacon, will be able to get wheat from her…

  3. This article is right on the money and clearly in line with REALITY.  The same cannot be said for the B$ coming from the US Gov and the Fed.  That gets invented at need, so reports whatever TPTB need or want reported.  If the Fed or Gov came out and said how screwed we really are, there would be a sheeple stampede of EPIC proportions… and who knows where that would lead?  A politician and a banker dangling from every lamp post?  Maybe.  It would be hard to argue that such actions would not be JUSTICE instead of TPTB’s view of Just Us.

    Love the pic of the guy in Zimbabwe paying for 3 eggs with a $100B banknote. I wonder if he got any change? That one pic is living proof that it is possible to be in a place where one can be a millionaire and still starve to death.

  4. I own a small business (very small). I have 4 employees, and as fate woud have it I`m putting my 2013 tax together. Here is a list of things that cost me more in 2013, than in 2012.  We have an automotive maintanince joint.
    Oil (went up twice)
    Laundry service
    Garbage service
    Natural gas
    Auto parts
    Snow removal
    Credit card proccessing
    Phone  Internet etc.
    First aid supplies
    All soaps and cleaners
    Software subscription
    All office supplies
    Tools and equipment
    Here`s what went down in price.
    The amount I get paid for recycling oil, steel, etc.

  5. The CPI should be negative if there is no bankers. Cause the productivity always goes up. Hence the price for a  lot of things should go down through the times.
    Yet the greedy bastard bankers want us to believe that everything should be more expensive. And dumbass people seems always fall for it.

  6. Big money doesn’t care about individual or small business inflation, therefore they are NOT seeking a hedge for it.
    Check out the latest PPI date- http://www.zerohedge.com/news/2014-01-15/producer-prices-jump-most-june-over-half-core-increase-due-tobacco-prices
    “1.2% increase in headline PPI”   That is nothing, until PPI moves into MUCH higher levels, big money will not protect their global stock positions with an inflation hedge.
    I assure anyone here, if that PPI moves higher, PM’s will as well. 

    • There goes zman@cia.gov wasting time again regarding mentioning the PPI, as though it is reliable, truthful information. It is government fraud just like the CPI, that only a government-paid troll would drool over.

      PPI has become a USELESS MEASURE, as intelligently stated by shadowstats.

      According to John Williams of shadowstats.com
      ( http://www.shadowstats.com/article/producer-price-index-ppi ),
      in regard to the PPI:

      “the PPI has been through more severe series redefinition and methodological changes than most other series, including the Consumer Price Index (CPI).”

      “changes over time have included elimination of imported goods prices, which helped to erase inflation resulting from a weakening dollar. Hedonic quality adjustments also were introduced to the series”

      “Once predominantly a measure of manufactured goods, PPI in the last decade or two increasingly has become a USELESS MEASURE of the services sector “wholesale” inflation. Due to the limited scope of services surveying, those COSTS ARE HEAVILY UNDERSTATED AND ARTIFICIALLY DEPRESS INFLATION reported for the broad finished goods index. For example, it is rare to find a PPI measure of insurance costs that represents more than 20 percent of the inflation rate seen in actual policy costs. The PPI concept lends itself as poorly and nonsensically to the services sector.”
      ZMAN is a Cass Sunstein/Obombass administration paid troll.
      “Cass Sunstein, the Regulatory Czar, had suggested, in a 2008 paper, that government agents, or allied groups, infiltrate and undermine groups that spread “conspiracy theories.”

      [The CIA was responsible for putting the weaponized term “conspiracy theorist” into circulation. The terms “conspiracy theory” and “conspiracy theorist” were virtually unheard-of until the mid-1960s, when the CIA issued a memorandum to its thousands of Operation Mockingbird media assets telling them to attack JFK assassination researchers using those words.]

      In a 2008 academic paper, President Barack Obama’s appointee to head the Office of Information and Regulatory Affairs advocated “cognitive infiltration” of groups that advocate “conspiracy theories” …….

      Cass Sunstein, a Harvard law professor, co-wrote an academic article entitled “Conspiracy Theories: Causes and Cures,” in which he argued that the government should stealthily infiltrate groups that pose alternative theories on historical events via “chat rooms, online social networks, or even real-space groups and attempt to undermine” those groups. ” 1

      1 http://conservativehideout.com/2010/01/17/czar-wars-trolls-cass-sunstein-advocates-“cognitive-infiltration”-of-groups/

      Another article describing what job ZMAN is paid to do: Obama Information Czar Outlined Plan For Government To Infiltrate Conspiracy Groups: “Put into English, what Sunstein is proposing is government infiltration of groups opposing prevailing policy,” 2

      2 http://www.prisonplanet.com/obama-information-czar-outlined-plan-for-government-to-infiltrate-conspiracy-groups.html

      To read about the fine details of the implemented version of the government infiltration
      program, check out the following link:


  7. Hmmm. I dunno Bill, my Gannett newspaper says today “Consumer Prices Up 0.3 in December”.  LOL.  Good to see someone else waking up to reality.  Maybe his next article will advocate buying gold & silver. 

  8. Excellent article.  
    What amuses me is the media stating we could re-enter a recession.  WTF?  Are you kidding me!  We have never left recessionary times.  And, the latest ‘news’ about the recovering economy.  Huh?  Compared to what…last years numbers that were down 10% from the previous year numbers?  Simply numbers, and all numbers can be manipulated, are manipulated and will be manipulated until the it all hits the fan.  
    What is more disturbing is the number of people that continue to believe the BS MSM is selling.  How can these MSM pundits look into the camera with a straight face?  Eventually, I would have to say enuff, I cannot sell this poo anymore.  They could make good money at the poker tables.  I seldom trust a good poker player.
    The paper price is north bound today.  One day the paper price is going to continue its upwardly trend.  And the following day.  And the day after that.  The following week,  Month.  You get the picture.   

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