Submitted by Jim Quinn via The Burning Platform blog
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The government released their monthly CPI report this week. Even
though it came in at an annualized rate of 3.6%, they and their
mouthpieces in the corporate mainstream media dutifully downplayed
the uptrend.
They can’t let the plebs know the truth.That might
upend their economic recovery storyline and put a crimp into their
artificial free money, zero interest rate, stock market rally. If
they were to admit inflation is rising, the Fed would be forced to
raise rates. That is unacceptable in our rigged .01% economy. There
are banker bonuses, CEO stock options, corporate stock buyback
earnings per share goals and captured politician elections at
stake.
The corporate MSM immediately shifted the focus to the
annual CPI figure of 0.1%. That’s right. Your government keepers
expect you to believe the prices you pay to live your everyday life
have been essentially flat in the last year.Anyone who
lives in the real world, not the BLS Bizarro world of models,
seasonal adjustments, hedonic adjustments, and substitution
adjustments, knows this is a lie. The original concept of CPI was
to measure the true cost of maintaining a constant standard of
living. It should reflect your true inflation of out of pocket
costs to live a daily existence in this country.
Instead, it has become a manipulated statistic using
academic theories as a cover to systematically under-report the
true level of inflation.The purpose has been to cut annual
cost of living adjustments to Social Security and other government
benefits, while over-estimating the true level of GDP. Artificially
low inflation figures allow the mega-corporations who control the
country to keep wage increases to workers low. Under-reporting the
true level of inflation also allows the Federal Reserve to keep
their discount rate far lower than it would be in an honest free
market. The Wall Street banks, who own and control the Federal
Reserve, are free to charge 18% on credit card balances while
paying .25% to savers. The manipulation of the CPI benefits the
vested interests, impoverishes the masses, and slowly but surely
contributes to the destruction of our economic system.
A deep dive into
Table 2from the BLS reveals some truth and
uncovers more lies.
Their weighting of everyday living expenditures is warped
and purposefully misleading.Let’s look at the annual
increases in some food items we might consume in the course of a
month, living in this empire of lies:
Ground Beef – 10.1%
Roast Beef – 11.8%
Steak – 11.1%
Eggs – 21.8%
Chicken – 3.7%
Coffee – 3.4%
Sugar – 4.2%
Candy – 4.6%
Snacks – 3.5%
Salt & Seasonings – 5.3%
Food Away From Home – 3.0%
Despite these documented increases, the BLS says food
inflation only ran at 1.8% in the last year.They show
large decreases in pork, seafood, dairy, and vegetable prices. I
grocery shop every week. I buy milk, fish, and vegetables and the
prices have not fallen. The price of pork products has decreased
from all-time highs, but is still well above prices from a few
years ago. The BLS fraudulently keeps the food price increase lower
by assuming you switch from beef to pork when the price of beef
soars. That assumption does not lower the price of food. The
assumption essentially builds in a lower standard of living for you
in their model of the world. The other ridiculous assumption is the
weighting for food eaten away from home. Giving this a weighting of
5.8% is outrageous when everyone knows obese Americans are chowing
down at Taco Bell and the millions of other purveyors of toxic food
sludge multiple times per day.
If you are like me, you probably need to live
someplace.Food and shelter are the most basic of needs in
a society. But according to the BLS they account for less than 50%
of your expenses. Let’s examine some shelter related costs to see
how badly the BLS is lying in this area:
Rent – 3.5%
Owner’s Equivalent Rent – 3.0%
Insurance – 3.1%
Water, Sewer, Trash – 4.7%
Household Operations – 3.6%
There is so much wrong with the BLS data, I don’t know
where to start.The rental market has been on fire since
2012. Builders are erecting apartments at a breakneck pace.
Independent, non-captured, neutral real estate organizations show
rents surging to all time highs, growing by 5.1% on an annual
basis.
Real rents in the real world have grown by 14%
since 2012. The BLS says they’ve grown by 9%. Who do you
believe?
It’s funny how the mysterious owner’s equivalent rent
calculation spits out a 3% increase in the last year. National home
prices, based on Case Shiller data and NAR data shows prices up
between 5% and 10% in the last year and up by 25% since 2012.
Mortgage rates have risen to 4% from the low 3% range. Property
taxes are soaring across the country as indebted localities rape
taxpayers to pay for their gold plated government benefits and
pensions. Evidently the BLS just ignores prices, mortgage payments,
and real estate taxes when calculating their lies.
The final outrage is the weighting applied by the BLS to
the owners equivalent rent.
It accounts for 24% of the CPI calculation, virtually the same
as it did in 2007. In case you haven’t noticed, the home ownership
rate has plunged to 22 year lows since 2007, as millions of
foreclosures booted people out of homes and millions of millennials
are so loaded with student loan debt and stuck with low paying
Obama jobs that home ownership is a distant dream. How can the BLS
continue to weight home ownership at the same level when the
percentage of rental units has soared?
There is no question the BLS should have dramatically increased
the weighting of rental housing.
In reality, the large increases in rental rates and the
surge of rental households reflects a much higher inflation rate
than is being reported by the government.
The BLS figure is a blatant lie.The recent report
from the
Center for Housing Studiesreveals the falsity
of the government reported propaganda. Over 20.7 million renter
households (49.0%) pay more than 30% of their income on housing.
More than a quarter of all renter households, or 11.2 million,
spend more than 50% of their income on housing. The median US
renter household earned $32,700 in 2013 and spent $900 per month on
housing costs. Renter housing costs are gross rents, which include
contract rents and utilities. If the median renter household spends
33% of their income on housing costs how can the BLS give it only a
7.2% weighting in the CPI calculation?
The
Center for Housing Studies report drives a stake into the
heart of the manipulated, politically massaged, false data put out
by the BLS to keep the masses sedated and their bosses fat, happy
and rich:
Over the span of just 10 years, the share of renters aged 25–34
with cost burdens (paying more than 30 percent of their incomes for
housing) increased from 40 percent to 46 percent, while the share
with severe burdens (paying more than 50 percent of income) rose
from 19 percent to 23 percent. During roughly the same period, the
share of renters aged 25–34 with student loan debt jumped from 30
percent in 2004 to 41 percent in 2013, with the average amount of
debt up 50 percent, to $30,700.
The faux journalists in the dying legacy media act baffled
by the continued real decline in retail sales when the answer is
staring them right in the face.True inflation in essential
living expenses combined with declining real wages and increasing
debt burdens has left the average household with little or no money
to spend.
The next blatantly manipulated false data is related to
healthcare.
Let’s peruse some this detailed inflation data:
Prescription Drugs – 4.8%
Non-Prescription Drugs – Negative 1.6%
Medical Equipment – 0.0%
Medical Care Services – 2.3%
Hospital Services – 3.5%
Health Insurance – 0.7%
Anyone living in the real world knows Obamacare has resulted in
a tremendous increase in demand for drugs, medical services, and
medical equipment. Health insurance companies, drug companies, drug
wholesalers, hospital corporations, and drug stores are reporting
record profits as their stock prices hit all-time highs.
When was the last time you saw prices drop or stay flat in
the healthcare arena?
It is patently outrageous for the BLS to report an annual
health insurance cost increase of a mere 0.7%.The annual
cost of employee sponsored health insurance is 6.3% higher than
last year, with the employee portion skyrocketing by 8.0% based on
real data in the real world. I work for the largest employer in
Philadelphia, with the most negotiating clout against insurers, and
my portion has gone up by 10% to 20% annually for the last five
years. Everyone working for a company has experienced the same or
higher increases.
Even the Obamacare exchanges are seeing double digit
premium increases in many states.
Studies from Price Waterhouse Coopers and
McKinseyfound increases in average premiums between 6% and 10%
across the country.It takes major cajones for the BLS to
report 0.7% health insurance inflation, but their job is not to
report factual information. Their job is to keep the ignorant
masses ignorant of their plight. The bigger the lie, the more
likely it is to be believed. The even more ridiculous aspect to the
BLS data is that health insurance is weighted at .75% in the CPI
calculation. The median household income in this country is
$52,000.
Employees are paying approximately $4,000 in health
insurance per year on average. That is 7.7% of their income.
The BLS weighting is absurd. Using a true inflation rate
and true weighting would add at least 2% to the CPI
figure.
Another area that impacts every American every day is
transportation.
People need to drive or take public transportation in order to
live their lives. Here are some more crucial inflation data points
from the BLS:
New Cars – 1.2%
Used Cars – Negative 0.7%
Gasoline – Negative 23.3%
Vehicle Leasing – Negative 1.1%
Vehicle Insurance – 5.1%
Parking & Tolls – 2.4%
Public Transportation – Negative 3.2%
So we have near record levels of new auto sales, driven by
subprime auto debt and 7 year 0% financing, with
average vehicle prices at all-time highs, and the BLS
reports prices only went up 1.2% in the last year. Edmunds, the
authority in auto data,
says prices went up 2.6% in the last
year.Do you believe the BLS model or real data from
the real world, broken down by automaker and vehicle? The even more
ridiculous contention is that used car prices fell. I’ve bought two
used cars in the last year and I can attest that prices are not
falling. Edmunds reported that
used car prices have risen by 7.1% in the last
year. Leases as a percentage of total auto sales is also at
record levels. Does this really jive with a decrease in leasing
expenses? I think not.
There are 254 million passenger vehicles registered in the
United States. We have a record level of auto loan debt totaling $1
trillion and a record level of auto leases.
According to Edmunds, the average monthly car payment is
$479. That is $5,748 per year. That equals 11% of the median
household income. Why would the BLS only give this category a 5.7%
weighting?Bankrupt states across the country have been
jacking up tolls. The BLS says they went up by 2.4%. My beloved
state of Pennsylvania has increased them by 10% per year for the
last three years. The BLS says the cost of public transportation is
plummeting. Has a Amtrak or any municipal public transportation
system EVER reduced fares? Not a chance. They need more revenue to
fund the government pensions of their union employees.
There are a few other categories that might be of interest
to you:
Banking Fees – 5.9%
College Tuition – 3.4%
Childcare – 4.3%
Sporting Events – 8.8%
Pet Care – 3.5%
Cigarettes – 2.5%
Alcohol Served Away from Home – 4.0%
Isn’t it delightful that your friendly neighborhood Wall
Street bank gets free money from the Fed, charges you 18% on your
credit card balance, pays you nothing for your deposits, and then
jacks up your bank fees?The relentless inflation in
college tuition is being driven by the relentless doling out of
student loans by the Federal Government to people who aren’t
intellectually capable of completing college level material. The
$1.4 trillion of student loans will never be repaid. The taxpayer
will be on the hook for hundreds of billions in write-offs.
To celebrate the near zero inflation reported by your friendly
government drones at the BLS take your family of four to a baseball
game, spending $160 for tickets, $25 to park your car, $20 for two
warm beers, $10 for two sodas, $24 for four hot dogs, and $10 for
an order of cheese fries.
Make sure you toast Greenspan, Bernanke, Yellen and the
rest of the Federal Reserve governors who have purposefully reduced
the purchasing power of your dollar by 96% over the last
century.
You know your true level of inflation.
You know it’s not 0.1%. You know it’s somewhere between 4% and
10%. You know your government is lying to you. You know the
captured corporate media perpetuates the lies. You know those in
control of the government must lie to keep their Ponzi scheme
going. You know they are just following the Edward Bernays
playbook. They want you to believe it’s for your own good.
Do you think it’s for your own good?
“The conscious and intelligent manipulation of the organized
habits and opinions of the masses is an important element in
democratic society. Those who manipulate this unseen mechanism of
society constitute an invisible government which is the true ruling
power of our country. …We are governed, our minds are molded, our
tastes formed, our ideas suggested, largely by men we have never
heard of. This is a logical result of the way in which our
democratic society is organized. Vast numbers of human beings must
cooperate in this manner if they are to live together as a smoothly
functioning society. …In almost every act of our daily lives,
whether in the sphere of politics or business, in our social
conduct or our ethical thinking, we are dominated by the relatively
small number of persons…who understand the mental processes and
social patterns of the masses. It is they who pull the wires which
control the public mind.” –
Edward Bernays – Propaganda – 1928