Paper Is Vapor

Sticky inflation and the government's statistical lies to prop up the U.S. dollar.

I desire to help my readers by giving biblical principles that ground us in a world gone amock.

For about three years, I’ve had this growing sense that Americans don’t comprehend our country's imminent economic and financial collapse.

The shock - whenever it occurs - will be severe.

The Bible clearly tells us that excessive debt is a symptom of flawed character.

Greed, envy, slothfulness, pride, and the other seven deadly sins always source the sore of debt.

“The wicked borrow and do not pay back…” - Psalm 37:21

“Alas…it was borrowed” - II Kings 6:5

“The borrower is the slave to the lender” - Proverbs 22:7

The United States Founding Fathers despised debt and warned future generations against it.

Yet, here we are.

The CPI

The Consumer Price Index is supposed to be the government’s official measurement of price inflation for United States consumers.

The CPI is released once a month by the U.S. Bureau of Labor Statistics.

The CPI was initially designed to help the average American citizen manage their finances by providing truthful information about how much the prices of necessary goods and services increased during the previous month.

Since the 1980s, government statisticians have conspired to understate inflation versus the common experience of the average U.S. citizen.

The CPI no longer measures the cost of maintaining a constant standard of living in terms of your “out-of-pocket” daily expenses.

Government statisticians are constantly manipulating the CPI statistics.

Here is one simple example from the PRICE OF BEEF.

Government statisticians will measure the price of a filet mignon (FM) and a t-bone steak (TS). Historically, the government would measure the price of FM from one month to the next and the price of TS from one month to the next.

After measuring, if the price of FM had increased by 10%, the CPI for FM would be 10%. Inflation. If the price of TS had remained the same, the CPI for TS would be 0%.

That makes sense.

However, since the 1980s, government statisticians have manipulated CPI numbers.

Government statisticians now consider estimated changes in consumer purchasing preferences. In our beef example, if U.S. consumers changed their purchasing behaviors from one month to the next and fully substituted TS for FM, the CPI would be 0%. If consumers reduce their purchase of FM by 50% and purchase TS instead, the BLS calculated CPI will be 5%.

Liars will figure.

The problem is that your total cost at the grocery stores GOES UP, but the government tells you the prices have decreased or remained the same.

You leave the store scratching your head.

Lies, Lies, and More Lies

Politicians and unelected government statisticians significantly underreport official inflation to cut annual cost-of-living adjustments to Social Security in an attempt

Understated inflation used in estimating inflation-adjusted growth has created the illusion of recovery in reported GDP and a stronger economy.

But “liars are figuring” for a theory they wish to establish.

In a stunning (and prescient) news article this week, Jim Grant shows why “inflation isn’t going away but is here to stay.”

I am not a financial advisor, nor should you take anything I write as investment advice. I am an educator.

Here’s my advice.