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Latest post 12-21-2007 10:38 AM by hippy. 8 replies.
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  • 12-15-2007 8:20 AM

    core inflation

    I naively think of food and energy as being at the heart of consumer inflation.  How ironic that uncle scam cleverly defines core inflation as excluding food and energy.  Ironic and convenient for him as the perpetrator of inflation.

    Am i the only one who's noticed how grocery prices have surged in the last month or so?  I haven't seen anything like this ever since i started buying groceries 20 years ago.  Food prices are higher each week i shop.  Thanks uncle scam.  He did this to dope prices and called it "drug war".  Should i call this stomach war or something?

    And yet:

    People now blame China for everything. Food up? China is too hungry. Fuel up? China is using too much energy. Now, China is even getting blamed for the price of Christmas trees.

  • 12-15-2007 10:02 PM In reply to

    Re: core inflation

    My understanding is that this is an example of how government subverts a potentially useful tool and twists it to serve their own twisted goals.

    If I understand correctly, core inflation was originally developed, not to ignore energy and food, but to provide a clearer picture of price inflation.  I think it is generally well recognized that food and especially energy prices can fluctuate quickly or wildly and it is nice remove those fluctuations from month to month comparisons.  However, by only looking at core inflation, the government manages to hide or ignore the fact that energy and food costs have had a sustained growth for some time.  If they added in a trend for year over year increases in food and energy costs, financial reporting would look much different.

    The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. But no price is too high to pay for the privilege of owning yourself. Friedrich Nietzsche
  • 12-16-2007 2:46 AM In reply to

    Re: core inflation

    The idea behind core inflation as a measurement is the same idea behind the bureau of labor statistics as a measuring entity.

    After the end of the Continental currency in 1792 the United States experienced very little inflation until 1973, except for the fiat money war inflation of 1862-1865.  So, things had deteriorated into a situation where fixed incomes from government pensions were prevalent, and a progressive-rate income tax was in place.  When inflation hit in 1973, and persisted, largely owing to the Nixon administration breaking the last link to gold in 1971 combined with a terrible foreign policy that led to the Arab oil embargo, the country was set up for a great deal of suffering.  The people who suffer the most from high and persistent inflation are those who have fixed incomes; those with low pay and little opportunities for mobility; and those who pay taxes on income.  So, just about everyone had reason to complain.

    To address these issues, the government established "cost of living adjustments" on the amounts paid out to pensioners.  It also established adjustments to the standard deduction, the exemptions, and the rate tables for taxation.  Doing so addressed the worst problems.  Then the country became used to inflation.  It has persisted ever since. 

    But, of course, one of the things about mankind, as Dostoevsky pointed out is, "they are such scoundrels, they can get used to anything."  And, one of the things most people have gotten used to is being told what the rate of inflation is by the government.  In fact, the government is a highly interested party in the number it reports, because it uses that number to increase payments to Socialist Security recipients, it uses that number to adjust tax payments, and even rate tables are affected.  So, the government is motivated to report very low inflation.  So, they lie.

    One of the essential lies that the measurement of inflation published by the government represents is the definition of inflation.  Inflation is not fluctuations in prices, and it never has been.  The usage of "inflation" to mean an increase in the prices of things is mistaken.  It may be widespread, but it isn't the root cause.  And, if we don't strike at the root, we shall forever be hacking at the branches of evil.

    Inflation is the increase in the supply of money.  In other words, inflation is caused by the policies of the Federal Reserve System which is a branch of government, though it is largely controlled by private banking gangsters (banksters is a term I'm very fond of; wish I knew who coined it).  Right now, today, I believe the broadest measure of inflation, the M3 money supply, would show about 12% to 14% inflation, if it were still published.  Shadowstats.com is a site you should visit if you want a different look at this statistic "inflation."

    EC Riegel, writing in 1949, noted that the inflation of the money supply perverts everything about the free market economy.  Every contract written in dollars is dependent on the whims and psychoses of those in government for the meaning of the term "dollar."  And, of course, the value of the contract is perverted by the perversion of the value of the dollar. 

    Riegel wrote, "The state's modern method of deceiving the citizen with counterfeit money menaces civilization through a confusion of monetary tongues and renders society unfit for self government until its ignorance of money shall be dispelled and government of government restored by the separation of money and state."

    Separating the issue power of money from the state is a key tool in the fight for individual liberty.  After all, your freedom and sovereignty over yourself are inherent within you.  Etienne de la Boetie pointed out that all you need to be free is to declare it.

    "To desire freedom is an instinct.  To secure it requires intelligence.  It must be comprehended and self-asserted.  To petition for it is to stultify oneself, for a petitioner is a confessed subject and lacks the spirit of a freeman.  To rail and rant against tyranny is to manifest inferiority, for there is no tyranny but ignorance; to be conscious of one's powers is to lose consciousness of tyranny.  Self government is not a remote aim.  It is an intimate and inescapable fact.  To govern oneself is a natural imperative, and all tyranny is the miscarriage of self-government.  The first requisite of freedom is to accept responsibility for the lack of it." - EC Riegel, 1949.


     

    Sed ego sum homo indomitus!
  • 12-16-2007 2:50 AM In reply to

    Re: core inflation

    Here's another good epigram from Riegel:  "When he learns that he can have a monetary system without political authority and unconfined by political boundaries, he will cast off his political shackles and develop, through commerce, a civilization far higher than any attainable or dreamed under political dictates."
    Sed ego sum homo indomitus!
  • 12-16-2007 8:10 AM In reply to

    Re: core inflation

    planetaryjim:
    Inflation is the increase in the supply of money.
    I wonder how few folk know that?  I mean, I ran your great reigel quote, and google gave only 1 link.  It's a link to a cool site, which also has an interesting piece:  "ignorance of money".

  • 12-18-2007 10:22 AM In reply to

    Re: core inflation

    i actually just had a big thought on inflation today. 

    yes they remove energy and food, but really what has had the largest  amount of inflation in the last 15 years or so?   stocks and real estate

    the reason being is that the fed can not control where the money goes, the connected get it first and most of them will invest it.  so excluding stocks and real estate completely it massively understates CPI and PPI 

    now for my thought

    everything is diffrent now, no one wants to get into real estate, and stocks are not making the returns that they once were either, so more money is going to start flowing into items that ARE calculated in the CPI and PPI,  raw materials,  goods, services, should start to go up more, including food and energy.  even though the fed ignores core inflation  it is still considered a factor to currencies, consumer sentiment etc. 

    so now the fed is trying to pump money into the system to hold it up, but again they have no control over where it goes after the injection.  so less and less will be flowing into real estate and stocks.  this truly will be a crazy ride 

    It is better to be hated for what you are than to be loved for what you are not. - Andre Gide
  • 12-18-2007 1:08 PM In reply to

    Re: core inflation

    I'm guessing asset (gold,stock,land) inflation isn't included in cpi, ppi, or core.
  • 12-18-2007 1:40 PM In reply to

    Re: core inflation

    i know gold/stocks/bonds etc are not included

    they include real estate but they really cheat,  they use the fair rental  value of a home.  so with the run up of home prices rental prices actually fell so using cpi real estate dropped in value.  and the other fun thing they do is SUBTRACT utilitys like gas elec etc.(or somthing like that)  so high energy prices depress the prices of real estate even more.

    i think using a cpi to gage inflation thru the chain of goods does have a point but when you change the basket of goods it becomes a horrible comparison mechanism. and it is very complicated to do in normal circumstances, for example buggys would be a component of cpi back in the 1800's but cars today are not really comparable in price or complexity to build and that would carry thru to computers etc etc.  so really no one knows how to make a cpi basket where it would be consistent and comparable for any length of time(which in theory would be the whole point).

    It is better to be hated for what you are than to be loved for what you are not. - Andre Gide
  • 12-21-2007 10:38 AM In reply to

    going up

    mr evil:
    everything is diffrent now, no one wants to get into real estate, and stocks are not making the returns that they once were either, so more money is going to start flowing into items that ARE calculated in the CPI and PPI,  raw materials,  goods, services, should start to go up more, including food and energy.
    Indeed:
    Milk prices have risen over 23% this year, to a national average of $3.80 per gallon, the Department of Agriculture reported this morning.
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