Despite 'Cooked' Government Statistics, Stealth Inflation Looms

MoneyNews.com email (Newsmax) | January 23, 2007 | John Browne

[Tolerance Sucks Rocks]

Funny, no estimate of the "actual" inflation rate was made in this editorial, and no rehash of the "official" rate was mentioned, either.

[Tolerance Sucks Rocks]

PING!

[Bigh4u2]

"Last week, I interviewed Lou Dobbs of CNN"

Now there's a creditable source! NOT!

[CIDKauf]

CPI is not an accurate indication of inflation because it reflects retail or consumer goods. Many things determine the actual risk of inflation such as government spending, taxation, foriegn balance of payments, level of investment, aggregate demand, etc....and Lou Dobbs IS NOT an economist and a fairly poor journalist (if that's what you call him)

[RegulatorCountry]

"The borrowing creates massive liquidity and a buying boom in such items as real estate, stocks, commodities, and consumer items. All these items rise in a dangerous price bubble."

There is a problem with this statement. A buying boom certainly occurred (past tense) in real estate, but that buying boom was very uneven, geographically. There has been something of a boom in commodities, but I don't believe it was purely or even largely speculative. Stocks, while turning in the best showing of the decade, are still only modestly ahead of highs early in the decade, looking at the Dow. Consumer items have generally deflated, demand aside, due to offshore sourcing.

It wouldn't take much for a deflationary scenario to re-emerge. Standing pat on interest rates makes sense right now, from what I can see, even though a case can be made that the stimulus is still excessive.

[SaxxonWoods]

"Government figures have been “doctored” for many years, under Presidents Kennedy, Johnson, and Carter. The former President George H.W. Bush began efforts to lower the reported CPI systematically. Clinton set the stage for a new and lower inflation CPI."

This "under-reporting" is taking longer to catch up with us than the Illuminati are taking to implement their world government.

Actually, there are indications that inflation is overstated due to ignoring the effect of productivity improvements over time. Maybe it all evens out!

[GulfBreeze]

"Last week I interviewed Lou Dobbs of CNN and he had this to say "RUN! RUN! Oh Dear G*d RUN please we're all going to diiiiieeee."

[1rudeboy]

[laughing too hard to respond]

[PeterPrinciple]

Personally, I don't think the govt knows either.......

Someone just made up number and everyone nodded yes.

[ex-snook]

I checked with my spouse. She says whoever says there is little inflation does not grocery shop. For those of you who don't shop for groceries, perhaps you have noted the increased prices on the restaurant menus you have seen.

PS And it ain't an improved quality fakeroo.

[Toddsterpatriot]

He quotes that our government thinks that, “rising oil prices are not considered inflationary, but falling oil prices are somehow deflationary.”

Rising prices do not cause inflation.

[IncPen]

Clinton set the stage for a new and lower inflation CPI.

Crash-Protection team, anyone?

I remember a couple of times the bond market moved with breathtaking heft during the Clinton years, the kind of heft that only large sovereign nations can muster.

And it was no mistake that some of the Wall Street trading firms were handing out rock star bonuses in its wake

[ansel12]

"I checked with my spouse. She says whoever says there is little inflation does not grocery shop. For those of you who don't shop for groceries,"



I agree with her, and my supplies for my business have been really going up.

[gcruse]

"Actually, there are indications that inflation is overstated due to ignoring the effect of productivity improvements over time. Maybe it all evens out!"

I think this is backwards.
Productivity gains in manufacturing mean the unit cost of the product drops. If the company doesn't lower its price, and they won't, what you get is a de facto price increase, which is inflationary. By ignoring this, the inflation rate is understated.

[mad_as_he$$]

You know that if laid all the economist in the world end to end you still couldn't reach a conclusion.

Seriously this should be no surprise to anyone. Even the slug at the 7-11 doesn't believe the Gvnmt numbers on inflation. A small loaf of bread here is $2.50 and it's crap. Inflation doesn't exist unless you are buying a house, paying for college, feeding a family or buying a new car.

[Kevmo]

Bump for later reading

[Toddsterpatriot]

Crash-Protection team, anyone?

LOL!

[Toddsterpatriot]

If the company doesn't lower its price, and they won't, what you get is a de facto price increase, which is inflationary.

Inflation is an increase in the general price level. De facto, that's funny!

[ASOC]

The FedGov has a very strong incentive to under-report the CPI

Social Security, Medicare, retiree payment etc. CPI goes up, payments go up. Carter really cooked the books as inflation ran away with the house.

BilleBob Clinton cooked the books to make the deficit look smaller. Anyone on a fixed income is toast.

[expat_panama]

[laughing too hard to respond]

Dang, why is it that I'm always low on tin foil at times like this when I really need it --big time!