” But the reason that all prices are rising is because everybody has got more money.”
I keep hearing that. I think DC believes everyone is rich now.
Back then we were the world’s creditor nation so the Fed could raise rates to finally kill inflation. Today we are the largest debtor in all of human history. A bump in interest rates would destroy DC.
So what does DC do? They start an expensive war in Ukraine complete with sending financial shockwaves around the world by telling every nation that we might confiscate their gold and cash reserves here if we get mad at them, they shut down every kind of energy and manufacturing possible, they open the borders and shower everyone who can step across in cash, cell phones, jet travel to wherever they please, free housing, etc.... you name it.
So now we have painted ourselves into a corner. We can raise rates and destroy the country, or we can not raise rates and inflation will destroy the country.
Prep accordingly.
A website called shadowstats has graphs of inflation, it says, using the 1990 methodology as well as the 1980 methodology, Current inflation using the 1980 methodology, according to this site, is 17%.
I only wish it was peak inflation. We are at the beginning and it will go on for at least a couple of years. Remember, year to year figures compound after a year. 8% this March + 8% next March isn’t just 8% for next March. Look at historical inflation figures starting in 1974 to get a better idea what is in store.
There is no such thing as “peak inflation”. Once let loose to the forces that are available to it it, inflation, like a wildfire, can spread beyond all efforts to contain it, until it finally burns itself out of all remaining fuel (money).
The term “hyperinflation” had to be invented to describe this phenomenon.
It’s like saying your cancer is stabilized.
As measured the same way as 1981, Inflation is 25%. Just saw the graph.
Also, look at M1 (money supply) charts over last 30 years. You’ll see exactly when inflation started, down to the week. It’s insane.
Money Quote:
“Forty years ago, we used entirely different CPI than we use today. And as far as I can tell, we are generally missing the mark by about half, meaning that if we use the 1981 CPI to measure the 2022 price increases, we probably would see a year-over-year rise of 17%, which is twice eight-and-a-half.””
With the exception of OER (owners equiv rent is 25% of the index - they ask homeowners what they THINK their home would rent for - most have zero clue), which is ridiculously low compared to reality (4.5% vs ~15-20% reality of rent increases), the method of CPI today is in general more accurate than in 1981. But Schiff is right that if you use the same methodology it would be probably close to double...at least 13% for sure. If you adjusted OER from 4.5% to 17.5%, then even CPI would be up 11.75%, not 8.5%.
But wages keep falling relative to inflation. So, at some point people can't buy because they don't have enough money. When that happens, inflation ends.