Paul Kedrosky's Infectious Greed
Finance & The Money Culture
Uber-investor Jim Rogers says the U.S. government is “lying” about the rate of inflation.
Longer piece on his site. He left the country for three years, returned to New York and found things more expensive.
In other news, I heard there’s gambling in Casablanca.
“He left the country for three years, returned to New York and found things more expensive.”
A guess that snarky comment was your best attempt at humor. SInce you lacked any facts for rebuttal, better insult him then eh? I suppose it doesn’t matter that the facts back him and not you. He’s right. Ask yourself why the official government inflation rate is very low yet food prices are up significantly this year and look to go higher. The government is cover it up because a key cause is Dubya’s ethanol program. And, as we know, whether its global warming or anything else, this administration has no problem suppressing inconvenient truths and facts. http://articles.moneycentral.msn.com/Investing/JubaksJournal/HowEthanolBitesYouInTheWallet.aspx?page=all
My wife is quite fanatical about grocery shopping. Due to heavy use of coupons and looking for sales, we’ve reduced our grocery bill about 25% over three years ago. This last weekend, I ran some reports from my home finance software and food expenses have been very stable with a slight upward trend. Gas, on the other hand, has clearly gone up.
In summary, some food prices are up, most are fairly stable.
Jimminy Cricket is long Black Pepper (not kidding) i prefer black gold, also i prefer the commodity markets that are regulated by the U.S. Govt—
Rogers has been talking about this for years, and he’s right.
Through various statistical manipulations and outright deception, price inflation figures have been continually massaged lower than everyday real world prices would indicate.
Of course, underlying all this is a common and widespread misunderstanding of what inflation really is and where its origins lie.
If you use grocery coupons you are typically getting crummy groceries which will add to your medical bills. No bargain!
The supermarket prices are ballooning and Rogers talked about $6/gal gas soon. I track prices of certain staples in an excel spreadsheet — the increase isn’t pretty. The dollar has lost over 60% of its value since 2000.
The U.S. government is claiming inflation to be 5.5% per year as of June 2007. That means prices double about every 10 years, which is pretty much what’s been going on for the past few decades anyway. In the meantime, I’m paying 50% more for milk, eggs, chicken, fruit, gasoline, and other necessary staples than I was 2 years ago. That suggests the inflation rate is really running in the double digits. It’s very clear that the government lies about the inflation rate. Does anyone really doubt it? Remember, they are the ones furiously printing all the paper money that’s causing our inflation, and since March 2006, they no longer report on how much money they print. Isn’t it obvious why?
The problem isn’t that the government is lying, its the misleading use of the CPI as a measure of “inflation” and the “cost of living”. The CPI does not count housing costs for instance, which are certainly a cost of living and have been going up much faster than the CPI.
The other problem is that the CPI does not really account for changes in quality. Its like the difference between buying a brand name at Walmart and at Macy’s. It may be the same brand, but it isn’t the same product. The prices of heavily processed foods in many cases have not gone up because companies have moved to less expensive ingredients. On the other hand, if you buy fresh, unprocessed foods like milk and eggs you are going to see considerable increases. And if you buy a lot of meat, you are getting factory produced products that have neither the taste nor the nutrition they used to have.
Paul Kedrosky‘s Infectious Greed
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