What happens when the loss of faith in government is total?
Posted by at June 26, 2005 05:16 AMWhat's really fun is that they use the same gimmicks when they calculate the GDP. One of the reasons that the GDP keeps going up while gross national income stays flat.
Posted by Tim at June 26, 2005 06:38 AMWht cn y xpct whn th dllr s bt pc f ppr tht hs prgrssvly lst ts prcvd vl vr th yrs?
For those in doubt, you have only to look at the Mexican Peso, one of the most inflated currencies in the world. Now look at the exchange rates and how the dollar has fared against it over the past few years.
The international investors knew some time ago inflation was setting in and that the dollar was becoming worthless, thus leading to inflation. The cheap products from China are the only thing holding the prices down. And therein lies our demise.
Posted by at June 26, 2005 07:22 AMI read the full article. Scary stuff. What are we to do to protect our families and prepare for the crash?
Posted by JWC at June 26, 2005 09:38 AMThis is nothing new, and has been debated amongst the economic literati for a while. But all you had to do was buy groceries or pay any bill to know the CPI was way understated.
What are we to do to protect our families and prepare for the crash?
The government has your best interests at heart. You could have your children join the over 800,000 hispanic children that work in the fields picking fruit for us. That'll help make ends meet.
A few years ago, when the US official inflation rate was just over 2%, an index that had been maintained for decades by Arizona State University showed the rate in Arizona to be over 5%. Guess what happened? The index was terminated forever, for fear people would (incorrectly) think Arizona had worse inflation than the rest of the country. This index had never been cooked, and no one of any stature has the courage to publish a real inflation index.
Posted by nohelp at June 26, 2005 10:28 AMExactly why I won't purchase TIPS, which are Treasurys that are linked to the rate of inflation. TIPS could be a good investment in theory, but it is not a good idea when you thieving liars run the scam. Hedonics is a joke. The rich get richer and the poor get screwed.
Posted by Dianna at June 26, 2005 10:50 AMtypo - change that to "when you HAVE thieving liars..."
Posted by Dianna at June 26, 2005 10:53 AMWe'll be more likely to get traction on this issue if we point out that it is a bipartisan scam: Bill Clinton, Alan Greenspan, and Congressional Republicans all signed on enthusiastically to this scheme.
And Bush wants to replace Social Security indexing from wage-based to CPI-based.
I bring home the same paycheck ( same job)I brought home in 1994. The cost of insurance health car etc never stops increasing. Add gas and food, ( I never buy clothes) and the cost of computer and ISP ( I've never had cable or cell phone- just too expensive), tuition and cars keep going up, up but I keep hearing that wages increased- really ,where? CEO pay?
Posted by anonymous at June 26, 2005 11:42 AMLooks like it is time for a reposting of my brief history of inflation.
It goes back further than 1996, the first rejiggering was 1993 when housing costs where replaced by equivalent rent.
Posted by Stirling Newberry at June 26, 2005 06:36 PMOh good, I was hoping Stirling would drop by.
Posted by idiosynchronic at June 26, 2005 07:30 PMI think putting a number on the CPI is a very very difficult thing to do and by and large it has been a very good indicator of inflation in this country. I think people see a 3% rate and consider it low while remeber things being much cheaper "not too long ago".
3% may seem low today, but over a decade this rate would cause prices to go up by over a third which is significant to most people.
ANy system that tries to make a standard of comparison for such a large data pool will have faults (i.e. GAAP, polling data, etc). Those using the numbers should understand the assumptions that go into it before relying on the numbers. Not just assuming that those making the rules would make them exactly as they would...
The Government cooks books better than Enron ever thought of doing.
I've been a Disabled Veteran, on a fixed income, and absolutely no raises, except for C.O.L.A.s for about 34 years. The buying power has been going down the toilet for a bunch of years now.
Every few years you see Congress give themselves, and white collar Government workers substancial raises, period.
I remember in the good old days, I was in the military, January 1976-80, back then inflation was inflation. You could count on it being RIGHT. Although, I still remember at the time thinking the 11,13, and 14+% annual increases during the Carter years wwere kind of understated, although we DID get 2-3% raises in our COLAs. Which is why I got out of the Air Force, losing over a third of your income in three years is serious. And, it was the REAL reason Carter was a one term man and the Reaganites got in and started the fascist monetary tactic of denial and forgery. Nothing like now though, it seems these days an overpaid bureaucrat just stands up and pulls the number out of his ass.
Look, for those wondering what you can do to "protect" your families and such, well the short answer is not much, and the time is near, witness the doubling of both gold and silver, as well as real estate in most areas. People instinctively head for, pay premiums for tangible assets when they sense the game is almost up. But, unless you plan to become a survivalist in a rural backwater armed to the teeth you have a good deal of pain to get through. Might not be this year, might not be next, but before Bush is out of office you will see what they have done to America.
For those that have a bit set aside, enough for metal assets but not enough for real estate, which will get hit really hard anyway, I would warn you away from gold. In 1932,33 in the depression gold was arbitrarily priced at $35 per ounce and made illegal for citizens to own, this will likely happen again. Buy silver, it is better for many reasons.
And, no, it would NOT do any harm to have a good supply of canned goods stashed in the basement. I know most think it cannot happen here, but my grandfather was raised in the lap of luxury till he was 15 when they lost everything they owned and he had to hump grainsacks for a nickel an hour. He NEVER got over it, the bleeding hands and the FEAR haunted him his whole life. It CAN happen here, and when it does people will die.
I will tell you what bothers me most about all of this, I sacraficed and slaved to get through a bachelor degree in finance going to school full-time while working 40 hours a week only to find by graduation that any such degree was a waste of time, all those ratios and analytical tools are plain worthless if the numbers being input are made up. I would have been better off with an English degree.