How do we measure the level and duration of inflation, to know whether it will help or hurt? In basic terms, inflation is a rise in prices of basic goods and services over a given period of time. In the United States, the government generally tracks inflation using the Consumer Price Index, or CPI.
Besides measuring inflation, CPI is also used to set income rates for more than 80 million people on entitlement programs. 48 million people on social security, 22 million food stamp recipients, and 4 million civil service retirees, have benefits tied to the CPI.
When inflation increases, so do their benefits. These payments are among the largest non-defense obligations in the federal budget. Not surprisingly, then, the government tends to understate inflation and has changed the way the CPI is calculated nine times since 1996.
Another common inflation metric is the Federal Reserve’s core inflation, which it uses to measure overall inflation. The Fed excludes food and energy prices to smooth out short-term volatility. However, based on government data, food and energy purchases make up 36% of the average consumer’s budget. The Fed’s inflation graph might look nice and smooth, but it’s probably not the best indicator for how your wallet feels when paying bills or buying groceries.
Finally, in the chart at the top of this page, we’ve plotted the Journal of Commerce Industrial Price Index over the last year. This index charts the price of key commodities that are used in industrial production. The chart is up and to the right, screaming inflation. Commodity inflation will likely lead China to report its first trade deficit in March in 6 years!
As they say, the markets don’t lie, people do (or government statistics as the case may be). Based on the evidence above, we’re sticking with our inflation call — until the markets, and the data, tell us different.
Every state needs justification. And the justifiers are always welcomed and cheered by the state. So we should not be shocked that a false science — a science that props up the state — is embraced by the state and associated sycophants.
But we must always remember that in the end, the nonsense is revealed for all to see, with the proponent receiving his due discredit. But how long do we have to wait? And what will be the final result? Only time will tell.
But does the big inflation scare make any sense? Basically, no
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Deflation, not inflation, is the clear and present danger.
Originally posted by SeekerofTruth101
reply to post by mnemeth1
You are talking about hyperinflation. Are we any where near it? Certainly not now, so long as monetary and fiscal controls are in place. Have a little faith in the financial systems, more so as we had all woken up to what went wrong with the economic system, and are enacting regulations to prevent such occurence.
Zimbabwe deserves what it got, for they printed money out of nothing, and backed by nothing, but corrupted themselves over nothing of true value. They have to pay the price for being financially irresponsible, as they have nothing and overvalued their critical resources.
Now compare it to the West, middle east and asia, what kinda backing do they have? - tangible Assets as well as human capital with great cerebral potential - educated white, black, red, yellow or brown.
So lets deny ignorance....and baseless misery
Deflation is the best possible economic outcome.
That means the money is gaining in value.
This is the 3rd major depression since the inception of the Fed in 1913. Not only is this a depression, its an inflationary depression
Originally posted by Rockpuck
reply to post by mnemeth1
Deflation is the best possible economic outcome.
That means the money is gaining in value.
Go take an economics 101 course mate.
