Posted on 11/11/2010 7:53:35 AM PST by frithguild
It is a war of words, because words stand for ideas. Winston Churchill said that history would be kind to him, because he would write it.
Inflation is not coming, it is here. Perhaps calling debasement of the currency “Quantitative Easing” has allowed the government hand of inflation slip into our pockets a little bit less noticed than in the 1970’s. The dirty secret, however, is not what the Fed has been calling it. The Consumer Price Index, used almost universally to measure inflation, does not recognize inflation when packages have been “Obamasized”:
That’s because of how the CPI—the Consumer Price Index, the traditional (and official) metric of U.S. inflation—is calculated. It uses data from past years—currently the 2007 and 2008 consumer survey—to create a basket of products, goods and services, which it uses to calculate monthly price changes.
However, the CPI doesn’t slice the baloney fine: If a product-x that was sold in a 20 ounce package for $3.99 back in 2007 is now being sold in an 18 oz. package at the same price, CPI does not compute that there was an 11.1% inflation in the price of product-x. Rather, according to the CPI, there was zero price inflation in product-x—because it sold for the same price, regardless of whether the package was 10% smaller.
But this is exactly what seems to be happening in food, as well as in other categories of what one would consider basic necessities: Foodstuffs are being sold in smaller units, cotton clothing is now being sold for the same price, only made of synthetic materials, and so on. A recent blog post on Zero Hedge highlighted the specific case of coffee at WalMart, previously sold in a package of 39 oz. for $9.88, now being sold for $10.48—in a 33.9 oz package. This represents a 22% jump in price. Cases such as this are common, and cropping up like mushrooms on the web—enough to confirm that stealth inflation is happening, without needing to stop by John Williams’ Shadow Government Statistics.
See The Boiling Frog: Effects of QE2 On The Bottom 80% of the U.S. Population http://www.freerepublic.com/focus/f-bloggers/2625439/posts
Everybody who looks at prices knows that packages are getting smaller, but selling at the same old price. This is inflation, pure and simple. So lets now fight this war with a little of our own language. "Look Marge! They used to sell this coffee for $9.98 for 39 oz. for $9.88. Now it's $10.48 for 33.9 oz. It's been Obamasized!"
What if a shopper next to you says, “That’s not fair to say!” A simple retort can be, “Obama and the Democrats gave us trillion dollar deficits, without any way to balance the national checkbook. So the only choice the Bernacke and Fed has is to make the national debt seem smaller by making everything else, like what is in this package, more expensive. They do that by just printing money to pay the debt. So it is fair to say.”
So what would your retort be to the person who says, "That's not fair to say!"?
Welcome to Obamacized America.
The reply is not simple enough for most people. Better: “You are getting less product for the same amount of money because the government has devalued your dollar by 40%.”
Keeping “perceived” inflation low by selling you less for the same price. That just about sums up the entire Obama/Progressive agenda. Now the question is: why is corporate America helping him by hiding the inflation? These size cuts aren’t the result of out of control government czars or draconian regulations. The middle class has no friends in this fight.
But the people know. Sarah is correct.
The difference between the liberals and the conservatives during food prices rising:
Liberals complain, wine and demand that SOMEONE(government) do something.
Conservatives adapt(coupons),improvise(swap)and use their self reliance(gardens) to survive.
We will survive this.
My wife, who keeps careful track of the family grocery budget, was just talking to me about this phenomenon yesterday. She was saying it reminds her of the 70’s when coffee and sugar got so expensive. Can gas lines be far behind?
You would think that the CPI would use standard unit pricing. The problem is that usually inflation measures exclude food and gasoline which is what people see immediately and they weigh things like computers and housing. It’s as skewed as the unemployment rate. How is it that we can lose 400K jobs but the unemployment rate never goes above 10%. We’re living in George Orwell’s Oceania and all these stats are right out of the Ministry of Truth.
False. Page 8, bottom of column 1, here (.pdf file).
Michelle Obama would say this is a good thing because American consumers are “consuming” less material goods (for the same price) therefore stablizing the economy while reducing caloric intake. < 1/2 sarc >
Mike
Rationing.
Democrat voters get to gas up on any day ending in "Y". Republican voters get to gas up on any other day.
They downsize the CPI so they don’t have to hand out COLAs (and I don’t mean Coca Cola).
I’ve accepted my new reality. Hot dogs, beans,and ramen noodles by the bulk. Thank you obama, you dooshbag.
Canned and container products have less ‘product’ and more liquid (aka, water).
==
Last year, I was at my brother’s. We were getting ready to eat. My sis-in-law opened a ‘regular’ 24 oz. size container of cottage cheese. There was a full inch of air between the top of the container and where the liquid filled to. The actual product was another inch below to liquid. That container actually had about 1/2 container of product. The remainder was filler — air and liquid.
Yep — in the ‘good old days’, we’d buy a three pound can of coffee (now 35 to 39 ounces); and try to find a pound of bacon now (12 ounces is the new standard).
Excellent example of how internet memes are created. (Anybody remember the howls of derision when I published that paper written by an egghead who had the audacity to point out that certain economics bloggers don’t know what the hell they are talking about?)
I bought a half gallon each of chocolate and vanilla ice cream for my sons birthday party. I haven’t bought ice cream in years, mainly because I eat it all. Anyway, I did not buy two half gallons. Each container was 1.75 quarts. Containers are smaller and prices are either staying the same as the old, larger size, or still going up without consumers noticing the packaging.
This time last year I paid $1.69 per gallon for propane. I just paid $2.09 per gallon.
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