Why The True Cost Of Living Is Much Higher Than We're Told (Or Sold)

Zerohedge ^ | 20 Mar 16 | Adam Taggart and Tyler Durden

[SkyPilot]

Over the past decade, we've been told that inflation has been tame -- actually below the target the Federal Reserve would like to see. But if that's true, then why does the average household find it harder and harder to get by?

The ugly reality is that the true annual cost of living is far outpacing the government's reported inflation rate. By nearly 10x in many parts of the country.

This week, we welcome Ed Butowsky, developer of the Chapwood Index, to the program. His index is a 'real world' measure of how prices are increasing much faster than the wages of the 99% can afford:

In my business, I wanted to make sure that I was building portfolios that weren’t just efficient but got people the rate of return that they needed. I thought: My goodness, what I need to do is give people a list of everything they spend money on and have them track quarter by quarter exactly their increases, so I can do a better job as a financial advisor in determining what return I need to target.

I got a hold of a list of 50 major metropolitan areas and found people in every city and I gave them a job: I asked everybody to send me what items they spend their after-tax dollars on. I got about 4,000 different items. Then I took the 500 that most frequently appeared on the list and we've been tracking specifically these same items in every city since that period of time. I weight this list based on what percentage of a normal income people spend on each item.

[SkyPilot]

Basically, over the last five years, the average increase for all 50 major cities is 10% vs the average CPI of 1.5%. So it's easy to see that for people who are in the middle income, lower income or people who are living off of a pension that's adjusted based on the CPI, they've lost 8.5% of their purchasing power if everything was adjusted to the CPI year over year. Do that over five years, over 10 years -- now you know why there's such a separation between wages and wealth.

People are being lied to on a massive scale. Our government is a propaganda machine of lies.

Moreover, the global economy is very close to a massive crisis.

Watch out folks. When you hear the term "Global Reset" on every network, you will know that total enslavement is here.

[grey_whiskers]

Obama sucks swallows gargles.

[sasquatch]

A buck and a half for a bell pepper?
No inflation here.
The font for ‘BS’ cannot be big enough.

[logitech]

truth on inflation ping

[AndyJackson]

The ugly reality is that the true annual cost of living is far outpacing the government's reported inflation rate. By nearly 10x in many parts of the country.

We all know this is true from our own experience. That the true cost of living has been substantially outpacing the PCI has been going on my entire working life. Promotions allow one to run in place.

[dragnet2]

Bookmark

[BlackVeil]

I am glad that someone is doing real research on the cost of living. Official figures are a joke.

[Stosh]

Nice to see documentation of this deception.

When Carter was in office, his economic policy was so awful it couldn’t be ignored - both unemployment and inflation were so bad even the MSM couldn’t cover for him, and it was hardly a surprise Reagan took him down.

Anybody who lives someplace other than DC or Manhatten knows that the economy has sucked for the last seven years - yet the MSM hasn’t had much difficulty covering this time. And that’s partly (largely?) because the Washington elite has learned how to fudge the unemployment data (now, supposedly under 5%, even though workforce participation is the worse it’s been in several decades), and they’ve played games with the CPI formula, so that 10% inflation can be sold as 1.5%.

And thus do the elites keep their stooges in power while the economy goes to hell.

[Rebelbase]

Shrinkage.

[ldish]

food prices haven’t actually been going as much as the amount you are getting in the can or bag is going way way down for the same dollar. that is how they, with the approval of congress and the lying whitehouse, are able to hide it and cause you to spend more but keep the indexes low...that and the fact i don’t even thing the cost of food is included in the cost of living index any longer...lying bums all! but govt...no one ever gets fired or laid off...and of course like the universities their cost always go up and never go down. screw them all!!

[SkyPilot]

Things are getting scary.

Despite the gains in the Dow recently, all the fundamentals tell us the global economy is on the precipice of disaster.

The fools applaud at the end of each closing bell, smiling like vapid, windup robots.

Yes, applaud. Applaud.

Many people continue to pour massive amounts of their ever dwindling salary into the market via their 401K, IRA, or other retirement account, not even knowing what they are buying.

As you stated, the real unemployment and inflation numbers are now fudged, and everything pumped out are pure lies.

Do you remember what happened during the 2012 election? The BLS put our false data prior to a debate, and the Wall Street gamblers in the casino bought it hook, line, and sinker and the market perked up. The media reported it as a "Victor for Obama!"

The Wall Street gamblers are just Johns working for the Whores - and they don't really care so long as they get a cut of the Ponzi scheme.

[TexasFreeper2009]

quote “then why does the average household find it harder and harder to get by?”

easy.

Because people expect MORE a LOT more than they used to!

Everyone expects all the bells and whistles on everything these days.

No one hardly considers buying a standard transmission car anymore. Manual windows? what's that!? A new home without central heat and air? unheard of! TV antenna ? what's that? live without a smart phone or high speed Internet? are you crazy!?!? I could go ON and ON about all the things nearly everyone EXPECTS now that were extreme luxuries not long ago.

[central_va]

Either my a$$ is getting bigger or toilet paper is getting smaller.

[SkyPilot]

And not just toilet paper. Product sizes are shrinking.

[Parmy]

Anyone who shops and has a brain knows that inflation is real and has been in the prices of what they buy. It is just that the govt. cooks the figures and doesn’t measure everything.

[wally_bert]

I have a manual box in my 2016 Tacoma. Apparently one of a handful in the Carolinas according to the dealer.

Mine was traded with another dealer while it was on the cargo ship.

It was an NC dealership that got it for me. The local guy in Columbia didn’t even want to act like it existed.

I took it in for its first 5K service at that dealership here. The service guy got a chuckle.

[DoughtyOne]

[Spktyr]

That has a lot to do with the regional distributor. Gulf States Toyota Distributing and South East Toyota Distributing are independently owned and they have a lot of configs they refuse to order. NC is not under SETD, SC is.

[spodefly]

Anyone who eats knows there is inflation.

[Colinsky]

Yep, no inflation here, shampoo costs exactly the same as six months ago.