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Posts Tagged ‘inflation’


“When you can lie about money, you can lie about anything.” ~David Morgan

We can argue about the definition(s) of inflation until the cows come home – some economists spend a career trying to nail it down.

But for clarity’s sake, we’ll use the definition of the Austrian School (Mises.org) as an increase in the money supply. This is really the correct one, regardless of any bias of dogma, “schooling” or the mainstream media. Although most everyone defines inflation as an increase in the price of goods and services, this is actually a result.

Most of us have been taught that inflation is all right as long as it doesn’t get out of control. In the short term, it can benefit those able to manage cash flow in business or with real estate for which they can service loan interest and taxes.

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Have you noticed that prices are going up rapidly? If so, you are certainly not alone. But Federal Reserve chair Janet Yellen, the Obama administration and the mainstream media would have us believe that inflation is completely under control and exactly where it should be.

Perhaps if the highly manipulated numbers that they quote us were real, everything would be fine.  But of course the way that the inflation rate is calculated has been changed more than 20 times since the 1970s, and at this point it bears so little relation to reality that it is essentially meaningless.

http://www.activistpost.com/2014/06/inflation-only-if-you-look-at-food.html#more

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Despite proclamations that the “economy is improving” and that “unemployment is down,” one thing is evident and that is – for a number of reasons – food costs are soaring, and as they do, those most vulnerable, like the poor, the elderly and those earning the lowest wages, are being hurt the most.

“We are sure the weather is to blame but what happens when pent-up demand (from a frosty east coast emerging from its hibernation) bumps up against a drought-stricken west coast unable to plant to meet that demand? The spot price (not futures speculation-driven) of US Foodstuffs is the best performing asset in 2014 – up a staggering 19 percent,” notes Tyler Durden over at Zero Hedge.

In February, the site gave voice to a sort of prelude to the aforementioned scenario, in publishing a post by Michael Snyder of The Economic Collapse blog:

Did you know that the U.S. state that produces the most vegetables is going through the worst drought it has ever experienced and that the size of the total U.S. cattle herd is now the smallest that it has been since 1951? Just the other day, a CBS News article boldly declared that “food prices soar as incomes stand still,” but the truth is that this is only just the beginning. If the drought that has been devastating farmers and ranchers out west continues, we are going to see prices for meat, fruits and vegetables soar into the stratosphere.

A number of factors are leading to price increases

Sure, prices are up because California’s drought is limiting supply. Some have even said that commodities prices are being pushed upward by speculators on Wall Street; that may be happening to an extent.

But there are a number of other factors that the government doesn’t report as having much of an effect at all on food prices (and remember, the government doesn’t include “volatile” food and energy prices in its monthly inflation reports).

Speaking of energy, the price of a gallon of fuel, especially diesel fuel, has a lot to do with the prices you pay at the grocery store. Historically, food supplies were more much more local; transportation costs, therefore, were much reduced (and that was during the era of much cheaper fuel). Not anymore; the impact on prices that California’s drought is having demonstrates how vast the U.S. food supply chain has become. With it has come higher transport costs.

Kimberly Amadeo, a U.S. Economy Guide at About.com notes:

Food prices rise in response to high gas prices. That’s because transportation is a large cost of food you buy at the store. When you notice prices at the pump rising, expect to see the same thing happen in about six weeks at the grocery store. High gas prices are, themselves, usually caused by high oil prices. Here again, it usually takes about six weeks for increases in oil futures to translate to the pump.

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‘The Queen is set to receive an inflation-busting 22 per cent ‘pay rise’ over two years, according to new official figures.

The monarch is said to be ‘down to her last £1 million’, leaving her vulnerable to ‘unexpected costs’, a report has said.

She is now expected to be given £37.9 million in 2014-15 to run her Household and conduct official engagements, up from £31 million in 2012-13.

The figures were released yesterday by the National Audit Office which has, for the first time, been allowed to examine all aspects of the Queen’s funding as Head of State.’

Read more: Queen is given an inflation-busting pay rise: Her Majesty to receive 22% increase over next two years after being reduced to her ‘last MILLION’

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Spot the point in this 803 year timeline of world inflation, when the Fed was created.

The chart above comes courtesy of Jim Reid’s fantastic “Journey into the Unknown” which we will dissect in much more detail shortly. For now we wanted to bring our readers attention to what is arguably the most important aspect of modern monetary times: the advent of persistent inflation, and the disappearance of deflation.

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President Barack Obama confers with Federal Re...

Image via Wikipedia

During his press conference last week, Federal Reserve Chairman Ben Bernanke said that one of the Fed’s big concerns was that inflation was too low.  He revealed that the Fed bases this contention on an index of “core inflation,” which excludes food and energy costs.

“Core inflation” is mainly of interest to Americans who don’t eat and don’t drive.  Others will be more concerned with broader inflation measures, such as the CPI-U.  However, over the years, the government has modified the CPI-U to reduce the reported rate of inflation.  Economist John Williams has noted that if the CPI-U were calculated the same way that it was calculated in 1980, the year-over-year inflation rate reported for March 2011 would have been 10.20% rather than the “official” 2.68% number.

How can a citizen know what is really happening on the inflation front, given that the government seems to be trying to hide the truth?  Watch for these ten secret inflation warning signs:

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Translation: Shit just got real, and is about to manifest itself in limit ups in both regular, and black gold.

As if a dollar in freefall was not enough, surging oil is about to hit the turbo boost, decimating what is left of the US (and global) consumer. Xinhua, via Energy Daily, brings this stunner: ” Chinese oil giant Sinopec has stopped exporting oil products to maintain domestic supplies amid disruption concerns caused by Middle East unrest and Japan’s earthquake, a report said Wednesday.

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Example of an American grocery store aisle.

Image via Wikipedia

29 Mar 2011 Chips are disappearing from bags, candy from boxes and vegetables from cans. As an expected increase in the cost of raw materials looms for late summer, consumers are beginning to encounter shrinking food packages. With unemployment still high, companies in recent months have tried to camouflage price increases by selling their products in tiny and tinier packages. So far, the changes are most visible at the grocery store, where shoppers are paying the same amount, but getting less.

LINK: Food Inflation Kept Hidden in Tinier Bags

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Example of an American grocery store aisle.

Image via Wikipedia

The government released a nasty little inflation rate surprise yesterday.  Prices increased .4% in January, which was 25% higher than the expected .3% increase.  It should come as no surprise to anyone who fills up at a gas station or shops in a grocery store that prices are on a tear.

The Bureau of Labor Statistics (BLS) report said, “Increases in indexes for energy commodities and for food accounted for over two thirds of the all items increase. The indexes for gasoline and fuel oil both increased in January, continuing their recent strong upward trend. The index for food at home posted its largest increase in over two years with all six major grocery store food group indexes rising.”  (Click here for the complete report from BLS.)

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World map showing inflation, updated for 2009....

2009 INFLATION DATA

 

(NaturalNews) Within a decade, a loaf of wheat bread may cost $23 in a grocery store in the United States, and a 32-oz package of sugar might run $62. A 64-oz container of Minute Maid Orange Juice, meanwhile, could set you back $45.71. This is all according to a new report released Friday by the National Inflation Association which warns consumers about the coming wave of food price inflation that’s about to strike the western world.

Authored by Gerard Adams (no relation to myself, Mike Adams), this report makes the connection between the Fed’s runaway moneycreation policy (“quantitative easing“) and food price inflation. (http://inflation.us/foodpriceprojec…)

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The key to understanding the inflation-deflation debate is to ask what would benefit the Financial Power Elites who own the debt as opposed to owing the debt.

A number of readers have asked me to weigh in on the inflation-deflation question.To many minds, getting this right is the key to choosing successful investment strategies going forward.

I am going to approach the question with the goal of reaching an integrated understanding, as per my Survival+ analysis, rather than be forced to make a binary choice (either deflation or inflation, or one followed by the other).

I am indebted to correspondents Cheryl A, Harun I., B.C., Chris Sullins and Zeus Y. for sharing their thoughts on this topic, as well as the analyses of Mish Shedlock, John Hussman, Karl Denninger and many others.

I am going to start my analysis by listing what we know. Then I am going to proceed to the key survival+ question of cui bono–to whose benefit? Why does answering this question matter?

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Look, whatever you do, please do not mention our military. No matter what happens to this country, let us NEVER question the mistake of Iraq or the wonderful intentions of our glorious leaders who thrive to keep this question (and many others) away from the discerning public.

You must understand just how important it is that you continue to convince yourself that America truly is the most exceptional country in the world. In this vein, it may be important that you read how we are The Number One Country in the World in many stats:

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HEAR HIM HERE

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There are nine videos here but all are worth watching so set aside some time. Crystal

via One Person in the Mainstream Media Who Gets It: “The Greatest Theft in History!” (Videos).

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US dollar and inflation


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