How's That Deflation Working Out For You?

The Burning Platform ^ | March 3, 2015 | the Burning Platform Staff

[Diana in Wisconsin]

The BLS put out their monthly CPI lie last week. They issued the proclamation that inflation is dead. Did you know your costs are 0.1% lower than they were one year ago. They then used these deflation numbers to proclaim your real wages soared last month. It’s all good. The American consumer is so flush with cash, they decided to spend less money for the second month in a row. The Wall Street shysters are so happy with declining consumer spending, declining corporate profits, and a global recession, they pushed the NASDAQ up to 5,000 for the first time in 15 years. Hey!!! That was the year 2000. Things really got better after that milestone.

[Diana in Wisconsin]

[Diana in Wisconsin]

So we know gasoline prices have plummeted in the last year (but are up 20% in the last month), but I’m trying to think of other things I use in my everyday life that have declined in price. Maybe going through the BLS detailed list will jog my memory. Here is the link to their data:

http://www.bls.gov/cpi/cpid1501.pdf

Let’s see how much deflation we’ve experienced in the last year for things we need to live our everyday lives.

Beef and veal +22.5%

Ground beef +21.0%

Steaks +14.9%

Pork +7.4%

Ham +11.5%

Whole Chicken +6.1%

Fresh Fish +3.5%

Eggs +8.2%

Cheese +7.8%

Fresh Vegetables +4.3%

Lettuce +12.2%

Tomatoes +9.6%

Coffee +6.7%

Butter +19.5%

Restaurant food +3.1%

Housing +2.9%

Hotels +7.6%

Owners Equivalent Rent +2.6%

Homeowners Insurance +5.6%

Electricity +2.5%

Water & Sewer +5.5%

Home Repairs +4.4%

Footwear +2.6%

Car Insurance +5.0%

Parking Fees & Tolls +2.3%

Medicinal Drugs +4.2%

Prescription Drugs +5.6%

Hospital Services +4.3%

Veterinarian Services +3.2%

Sporting Events +3.6%

Newspapers & Magazines +4.6%

College Tuition +3.6%

Educational Books & Supplies +6.5%

Grade School & High School Tuition +4.0%

Childcare & Nursery School +3.0%

Postage +3.6%

Cigarettes +2.5%

Financial Services +5.7%

Tax Return Prep +9.3%

[Diana in Wisconsin]

These figures are directly from the BLS website. These are the annual price increases of things most Americans need to purchase on a regular basis. I know most of them affect me every day. My weekly grocery bill is much higher than it was one year ago, and we don’t buy nearly as much steak or beef as we did last year.

The price of oil and gas has certainly declined by the 30% or so in the BLS figures, but it doesn’t come close to covering the price increase in food and other living expenses. The BLS declares we are experiencing deflation and our wages are expanding in real terms. It’s a bold faced lie. The other items declining in price are mostly discretionary items which might be purchased every few years. Furniture, appliances, computers and TVs are falling in price. I didn’t buy any of those items in the last year, so the lower prices had ZERO impact on me.

Apparel falls in price, but is made so cheaply in Chinese slave labor camps, you only get half the use out of it before you have to replace it. I’m guessing the BLS hasn’t factored that into their little calculation.

And now for the BIGGEST LIE in the entire report. The have the balls to tell you that health insurance only makes up 0.753% of your entire annual budget and it has FALLEN by 0.5% in the last year. This must be some cruel Obamacare joke perpetrated by these government apparatchiks. I haven’t met anyone who has seen their health insurance costs go down in the last year. My premiums went up by 20% and my annual family deductible went from $0 to $2,000. How the BLS can get away with issuing this drivel is beyond my comprehension. It’s pure and utter bullshit.

I wonder if the sheep actually believe what the government peddles. Does anyone with two brain cells think their daily living expenses are declining? Do they really think their wages are going a lot farther? Evidently not, because they have stopped spending money.

[Hardens Hollow]

I can’t think of anything I pay for that has gone down in price, to compensate for the things that have gone up in price - to net a zero increase.

House and car insurance goes up every year, this year being no exception. Food - I get sticker shock every time I go shopping now. Toiletries, clothes, cleaning products - up also.

Yet, I can get only 1% on my savings accounts and my best ‘investment’ is a credit card that pays back 2%.

But sure, I’ll quit using the brain cells God gave me and believe Big Government!

[PGalt]

How the BLS can get away with issuing this drivel is beyond my comprehension.

UNaccountable Bureau of Lying Socialists (BLS)

"Everything about socialism is sham and affectation" - 23.11 Ch23; Economic Harmonies; Frederic Bastiat

Thanks for posting/commenting and pointing out the lies, Diana. GRRRRRREAT post!

BTTT!

[InterceptPoint]

But ... but ... but ... but the new 4K HDTVs cost about what the old fashioned 1080Ps cost a few years back. Surely that is more important than food, housing, energy, insurance, medicine, tuition and those other things on your list. /s

I'm sure you know that the government has been revising the definition of inflation continuously for decades to make it look no worse than about 2.5% annually. But it is still a mystery to me that interest rates can still be held artificially low. This can't go on forever.

[Gen-X-Dad]

Core inflation calculations omit food and fuel, the two most important areas for the every day person. They did this to more tightly control the calculated inflation rate because of the massive debt tied to the rate for the banking system. We now live in times where government calculated stats are routinely skewed to support the narrative and prop up the ponzi financial economy regardless of what is happening in everyone’s life.

Deflationary pressures will continue to increase because of automation and lack of work for the masses and increasing wealth redistribution schemes for those that still have a job. At some point, this will derail the ponzi system which is the financial elites greatest fear.

[Soul of the South]

“And now for the BIGGEST LIE in the entire report. The have the balls to tell you that health insurance only makes up 0.753% of your entire annual budget and it has FALLEN by 0.5% in the last year. “

My healthcare costs, which include insurance premiums and the out of pocket expenses I pay until I meet the deductible, have doubled in the last two years while the range of services covered has decreased. Last year I spent 20% of my gross income on medical expenses as I am self employed, buy insurance in the market, and receive no federal subsidy. Looking at my bills cost of an office visit to my physicians in the first quarter of 2016 has been about 11% higher than last year. Drug costs are up about 10%.

20% for healthcare, another 35% for state, local and federal taxes. The gasoline cost reduction has been nice but gasoline comprises 5% of my budget so a 30% reduction in the price of gasoline results in only a 1.5% savings in my family’s total budget. Given food price escalation, I don’t notice the gasoline savings. In fact, the gasoline savings has been more than offset by the increase in my electric bill due to Administration policies resulting in my electric company shutting down coal fired plants.

The GOP could make issue of the government statistics lies. They could demand a return to real numbers, not the fake numbers we get today where the market basket consumers buy is changed to reflect what the government says are consumers switching from steak to hamburger to remain noodles over time in response to price changes. Yes, we rarely eat steak today in response to the high price but to claim there has been no inflation because I’ve replaced $5.00 per pound steak with $5.00 per pound hamburger in response to $10.00 steak prices gives a false picture of inflation (as intended).

Why won’t the GOP use this very real pocketbook issue to its advantage?

[Sgt_Schultze]

Government spending on things like Social Security has escalators tied to CPI. Even a fraction of an increase has a compounding effect on spending mandates in those program costs enhanced by spending escalators.

[omega4412]

Who are you going to believe, the Obama administration or that lying cash register?

[05 Mustang GT Rocks]

The governments of the old communist block used to operate their whole economies that way. And not just the gubmints but everyone, all the way down the ladder was forced to fudge the numbers to fit the central planning. Eventually the house of cards comes down...

[Sgt_Schultze]

Transportation fuel prices affect everything you purchase. Costs to deliver raw materials are higher, as are costs to deliver the finished products to market. So part of the inflated prices for your groceries is driven by the costs to manufacturers to get them to stores. So too, manufacturers and retailers are hit by the same higher energy costs as you are. Higher utility bills (driven up by government policies) are showing up in the prices you pay at the retail level. In short, much of this administration’s war on energy is raising costs for most consumer products.

[concerned about politics]

Why won’t the GOP use this very real pocketbook issue to its advantage?

The GOP isn't the party it used to be. Looking to them for salvation is a futile endeavor. There is only one party today. The only difference is one wants to move fast and the other thinks if it moves slower and pretends to disagree people will be less apt to notice whats happening to them.
It doesn't matter what the politicians promise you. What matters is what they are DOING to you!
What has the GOP done FOR you over the last 6 years? Can you name anything?Anything at all?

[Zeneta]

So, we have crude oil basically cut in half and the US Dollar hitting multi-year highs. The Dollar move and the oil move are a mirror image of each other that only started when QE* was stopped.

The year over year cost comparison may be a bit misleading since the affects of lower oil and a stronger Dollar has only been with us for a few months.

The real question is “Where’s the Cash?”

I suspect producers are trying to maintain their pricing power for as long as possible. If they cut prices it will likely be followed with massive layoffs.

There are a few things to consider. If the products that make up the CPI are primarily imported, than we should see that reflected in our “Purchasing Power Parity”.

The rally in the US Dollar is real and it will have an impact on prices. Might be delayed somewhat, but it will happen.

My contention is that we started a severe deflationary cycle in 2008 that was basically put on hold with the FEDS QE*. Those QE* efforts created inflation of prices but NO increase in economic activity with the allocation of capital for investment.

[concerned about politics]

Government spending on things like Social Security has escalators tied to CPI.

BTW...When Bush brought out the Welfare to Work program, millions of welfare recipients claimed disabilities and simply moved over to Social Security instead.
My husband is an accountant that deals with subsidized housing. He saw the paper work himself. They just moved over to another free program. Doctors were afraid of the "free" lawyers and lawsuits that were lining up, and simply filled out the necessary forms.

[exDemMom]

My income is only $800 more than it was last year. I’ve noticed that we have to watch our budget more closely than ever.

I’m still waiting for the economy to take off. I keep reading the MSM articles telling us how good the economy is, but I’m not seeing it. I see evidence of cost-cutting all over.

[wally_bert]

I’d love to flip some 4K stock footage that I am slowly generating to go with those 4K TVs. Maybe with better weather, I could hire acting talent and help the economy. I rather doubt it will.

[Sgt_Schultze]

Yup, disability has exploded. And, I understand it, a physical improvement must be demonstrated in order for one to be removed from disability.

[tbw2]

Another way of looking at it is that the cost of the discretionary goods like new TVs and consumer electronics went down because demand dropped, because people are spending more on food, electricity, medical costs, taxes.

[Diana in Wisconsin]

“This can’t go on forever.”

You’re right; it can’t. And when the rubber band snaps, it’s going to be ugly. And I mean Nancy Pelosi-level ugly!