Source – theburningplatform.com
– “…Yellen and her cronies have been riding the low oil price gravy train for the last 18 months, giving them cover to not raise rates because inflation was below their fake propaganda goal of 2%. The plunge in oil prices from $100 a barrel in August 2014 to below $30 a barrel in February of this year gave the Fed another excuse to delay increasing rates so their Wall Street owners could continue to feed at the trough of national wealth like never satisfied bloated hogs”:
(Inflation About to explode Higher)
“Those who are capable of tyranny are capable of perjury to sustain it.” ― Lysander Spooner
We all know the BLS artificially suppresses the CPI through bullshit substitution adjustments, quality adjustments, and various other incomprehensible hedonic adjustments made by government apparatchiks at the behest of their politician bosses. Some obscure theoretical academic calculation called owners equivalent rent accounts for almost a quarter of the CPI weighting.
It has no relation to reality as it has increased by only 12% since 2012, while the Case Shiller Housing Price Index is up 52% over the same time frame. The median price of existing home sales is up 30% over the same time frame. It also has no relation to rent increases, as they have gone up 22% nationally since 2012. It’s essentially a made up number by goal seeking bureaucrats doing the bidding of their establishment masters.
Prior to Greenspan and his cronies getting their grubby little non-callused academic hands on it in the 1980s, CPI reflected measuring the cost of maintaining a constant standard of living, as measured by a fixed-basket of goods. The purpose of all these adjustments and calculations has been to systematically repress the reported level of inflation as a way to keep the Social Security system solvent, allow the Federal Reserve to keep interest rates falsely lower for their banking cartel owners and the biggest debtor on the planet – the U.S. government, and to conceal from the average American how far their standard of living has fallen. It ain’t working.
The average household might not know real median household income is at the same level it was in 1989, but they know they are treading water on a daily basis – using credit cards to sustain themselves while paying 15% interest to the Wall Street banking cartel.
They know their wages are stagnant and their every day costs relentlessly rise. Real hourly wages, using the fake CPI, are up just 1.4% in the past year. In reality, using an accurate measure of inflation, real wages are falling. The government can tell them inflation is only up 1.5% in the last year, but they know better. Their real everyday inflation is north of 4%, as measured before the 1990 coverup began. Now, even the BLS is starting to lose control of the narrative of no inflation.
Even the suppressed, manipulated, massaged and adjusted CPI has gone up at an annualized 3% rate over the last two months. Core inflation, which the Fed supposedly basis their interest rate decisions upon, has run at 2.2% over the last year, and has exceeded the Fed’s 2% mandate for 11 straight months. As you can see in the chart above, medical care costs are skyrocketing due to the disastrous Obamacare train wreck. Medical-care prices are up 4.9% in the past year, including a 7% jump in prescription-drug prices (a 24-year high). Medical care commodities are up 5.2% and poised to go higher.
Obama declared to the American people his Obamacare plan would cut the annual average household insurance premiums by $2,500. This bald faced lie by the slimy snake is revealed in the chart below showing health insurance CPI is up 29% since Obamacare was rammed down our throats. Of course these fake BLS figures drastically underestimate the true increases, as most hard working families have seen their premiums rise in excess of 100%, with deductibles increasing by 500%. Close enough for government drones. But, at least they got to keep their doctor. Right?
But the fun has just begun. As Obama takes his victory lap, his prized piece of legislation is collapsing under the weight of government incompetence, outrageously high costs, lack of choice, and not enough young fools willing to pay through the nose for the benefit of lazy, obese, free shit army members. If you thought the 5% medical cost inflation was bad, how about 25%? That will be the average increase for Obamacare plans come November, with 9 states having rates growing by 40% or more.
The BLS not only under-reports actual medical cost inflation but under-weights it in their CPI calculation. It’s almost laughable they give it only an 8.5% weighting, when it accounts for at least 15% of the average household’s expenses. Nothing reported by the government or bloviated by a corrupt politician can be believed. I was reminded of an Obama whopper during the debate this week when Hillary declared her ridiculous economic plan wouldn’t add a cent to the national debt.
As he was doing his best snake oil salesman routine in 2009, Obama promised Americans his government controlled health insurance plan wouldn’t add one dime to the national debt. He was right. According to the CBO, it will add 14 trillion dimes ($1.4 trillion) to the national debt over the next ten years. How naive and mathematically inept does one have to be to believe these sleazy power hungry control freaks? Evidently more than half the willfully ignorant populace will believe anything they are told to believe. Dumber Together.
This brings us to rent, which has taken off like an Elon Musk government subsidized rocket ship, due to the Fed and Wall Street’s collusion in turning foreclosures into a windfall of rental income for connected Wall Street hedge funds. The purposeful limiting of foreclosure housing supply has driven prices to such astronomical heights, first time home buyers have been completely priced out of the market. Wall Street scam artists gleefully rent out the vacant houses to the people they kicked out of those houses. This has driven up the demand for rental units, resulting in rents jumping by 4% to 8% annually across the land and especially in major metropolitan centers.
What is again laughable is how the BLS weights rental housing versus owned housing. The U.S. home ownership rate of 62.9% is the lowest rate in over 50 years. So much for Bush’s ownership society. If the percentage of people renting is the highest in 50 years and owning lowest in 50 years, why would the BLS only weight rent at 7.7% of CPI and owners equivalent rent at 24.2%? Again they are purposely under-weighting an expense that is rising at a far greater rate than their beloved 2% goal.
Lastly, we get to the expense which is about to go vertical and give the old CPI calculation a drastic boost upwards. Yellen and her cronies have been riding the low oil price gravy train for the last 18 months, giving them cover to not raise rates because inflation was below their fake propaganda goal of 2%. The plunge in oil prices from $100 a barrel in August 2014 to below $30 a barrel in February of this year gave the Fed another excuse to delay increasing rates so their Wall Street owners could continue to feed at the trough of national wealth like never satisfied bloated hogs.
The year over year oil and gasoline decreases of 6% to 10% which have been suppressing the CPI calculation are about to turn into 10% to 60% year over year increases for the next six months, unless oil prices plunge again. Gasoline prices are already up 30% from the February lows. Transportation costs account for over 15% of the CPI calculation. Household fuel and utilities account for 5% of the calculation. In case you have forgotten, a major cost of food is transporting it to grocery stores. These year over year increases in energy costs will reverberate throughout the economy.
The official manipulated, massaged, seasonally adjusted and suppressed CPI is going to rocket above 2% into the 3% to 4% range. Janet and her cronies are already working on a dozen new excuses about these increases being transitory and not a reason to increase rates. I’m sure some new global crisis will arise, forcing Janet to delay again as instructed by her establishment masters. But they assure us the economy is growing, employment is booming and all is well.
In the real world where the deplorables live, senior citizens are going to get a $4 annual increase in their Social Security payments in 2017 (somehow the government gets away with a 0.3% increase when their own numbers show a 1.5% increase), while Janet allows them to earn .15% in their money market accounts. In addition, their medical cost inflation is exceeding 10%. Two of the largest expenses for a senior citizen are rent and medical costs. Maybe this is the equivalent of the Obamacare death panels. I guess granny will have to decide between her heart medicine and Ramen noodles with a side of Friskies for dinner.
With real wages stagnant below 1.5%, rising energy costs, soaring medical costs due to Obamacare, record high home prices and rent expense due to the Fed, the average new car price at a record $34,000, and food prices rising steadily, the standard of living of the irredeemables continues to plunge. But at least our taxes will be going up if Hillary and the establishment have sufficiently rigged the election to insure her victory. Sit back and enjoy our journey to third world status.