The BLS reported the CPI this morning. They tell me that inflation is well contained and has only risen by 1.2% in the past twelve months. Our beloved Federal Reserve chairman is worried inflation is too low. It is fascinating that the only people worried about inflation being too low are Ivy League educated economists and bankers whose wealth depends upon the middle class sinking further into poverty. As a person who lives in the real world, I can honestly say I like it when the things I need to buy cost less today than they did last year. When did inflation become a good thing for the average American? Our country was somehow able to grow from a fledgling new country to a world power in just over a century while experiencing mild deflation, except during times of war. The fallacy that inflation is beneficial to the common man has been peddled by bankers since 1971 when Nixon and his cronies closed the gold window and unleashed the inflationary boogeyman in the form of feckless politicians, captured Keynesian academics, and greedy soulless bankers.
It is no coincidence inflation accelerated the moment politicians, academics and bankers were unleashed to spend your money at will in order to obtain votes, Nobel prizes in economics, and ill-gotten obscene levels of wealth. David Stockman described Nixon’s dreadful sellout of the American people in his brilliant new book:
“Nixon’s estimable free market advisors who gathered at the Camp David weekend were to an astonishing degree clueless as to the consequences of their recommendation to close the gold window and float the dollar. In their wildest imaginations they did not foresee that this would unhinge the monetary and financial nervous system of capitalism. They had no premonition at all that it would pave the way for a forty-year storm of financialization and a debt-besotted symbiosis between central bankers possessed by delusions of grandeur and private gamblers intoxicated with visions of delirious wealth.” -David Stockman – The Great Deformation: The Corruption of Capitalism in America
The USD has lost 83% of its purchasing power since 1971. The moment Nixon began playing politics with the USD and bullied the Federal Reserve Chairman into pumping up the money supply prior to the 1972 election, the inflation genie got out of the bottle and led to the miserable stagflation of the 1970′s. It took extreme measures by Paul Volcker to get it back under control in the early 1980′s. Since Volcker we’ve had nothing but academics and toadies who have chosen to change the definition of inflation in order to mislead the average American regarding how badly they are getting screwed. Every refinement, tweak, adjustment, or revision to the calculation of CPI has been designed to produce a lower figure. Why control inflation when you can just change the calculation to suit your purposes?
Over the proceeding decades, the BLS has sliced and diced the CPI in such a way that they can make it say whatever TPTB want it to say. They need to keep the mushrooms (you) in the dark regarding your standard of living deteriorating, while the beneficiaries of inflation (bankers, politicians) see their standard of living soaring. They have made hedonistic “adjustments”, quality “adjustments”, substitution “adjustments” and geometric weighting “adjustments”, all with the sole purpose to reduce the level reported to the American people on a monthly basis.




















