The big lie about Inflation

For those of you still wondering why there is so much talk about
  • - inequality, and everybody blaming the rich, the bankers, and the top 1% overall (and of course hedge funds),
  • - low growth despite the largest central banks now running balance sheets in excess of USD 20 TRILLION,
    used to bail out a fundamentally broken system in 2008 - yet low official inflation, US tax revenues 40% higher than in 2008 and still 40mln Americans on food stamps, and disposable income only growing 1% per annum
  • - Central Bank hesitation to get off QE

 

Well, the official data will keep people guessing and pointing fingers at "fellow cellmates in the global economic prison", leading to societal riots and the rise of right wing populist movements. Pointed fingers would very quickly point in another direction, if data would be calculated correctly and in a transparent manner, instead of making statistics benefit government balance sheets by having to pay out less in social security (linked to inflation), inflate away record debts and keep the public mind at peace. But the establishment would be far away from where it is today then, so we will continue in utopia.

What our charts (available upon request) make clear:

  • • Still in recession, since pretty much 2006
  •  
  • • Inflation actually at 10% not 2% which now also makes house price appreciation so much more logical
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  • • Unemployment at least 4 times as high as proclaimed, explaining inequality far better than excessive bonuses, record suicide rates (4 times as many as killed by firearms, so how about suicide-control vs. gun-control) and indebted millennials with a negative savings rate and retirees going back to work.
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  • • The way inflation is calculated is erroneous in so many respects and far from reality that it is not even funny, especially given the global attention. Or would you for example think that it makes sense to ask only 7000 households out of 300mln in the US to share their expenditure details. Or that creative concepts to get a reliable figure for housing costs - like the "homeowners equivalent rent" which estimates the cost of housing based on what homeowners theoretically would pay to themselves in order to rent their own homes from themselves - will be a true reflection of increased housing expenses for individuals? Guess what this construct`s weight is in the CPI-U for example? 24%!
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  • • Fake News at a different level...trade accordingly!

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