Did you hear corporate NPR's report on the New Republic reporter that lied in his articles and how it was a disgrace for journalism? Do you remember when all NPR reporters in 2009 were shouting they were being made to report SPIN as journalism and then we had the corporate takeover of public media? SPIN IS LYING. SPIN IS JUST A NICE WORD FOR LYING. So, after the 2010 takeover of public media by corporate interests we hear nothing but SPIN.
So, when we hear the unemployment rate is 6.9% when it is 25%----SPIN. When we are told the FED policy is about lowering unemployment and creating healthy markets as yet another massive crash is coming in the bond market------SPIN. When Basu tells us the inflation rate is 1-2%------SPIN.
If you strip out energy and food from the calculation and you measure inflation year to year rather than several years......YOU GET THE FED'S MEASURE OF INFLATION......IT IS MANIPULATED TO MAKE IT LOOK AS IF IT IS LOW WHEN IN FACT IT IS SKY HIGH JUST AS WITH UNEMPLOYMENT!
This is important for two reasons. First, the FED is deliberately lying about the rate of inflation because we all know high inflation is bad for the economy and since inflation and interest rates are tied to one another------in order for the FED to set the interest rate at 0% as it has for the last few years it has to say that inflation is as low. So, we have a fake inflation rate to give a manipulated interest rate so the FED can give free money to corporations now rolling in profits from this policy. All this has allowed corporations to get rich while not working domestically-----thus the stagnant job growth. Meanwhile mergers and acquisitions are going crazy overseas which is what the stock market shows. It is all based on the rich getting richer by FED policy that all involves fake data and market manipulation------ALL OF WHICH IS ILLEGAL.
THE FEDERAL RESERVE EXISTS TO IMPLEMENT POLICY THAT ENSURES THE BEST EMPLOYMENT RATES AND THE BEST ECONOMIC STABILITY.
So, when US corporate media gives the world all this fake data-----which, by the way the world knows is fake, just as North Koreans know the Great Leader is lying when he says grocery store shelves are full of food-----SAME THING----THEY ARE NOT ACTING AS JOURNALISTS, THEY ARE ACTING AS PROPAGANDISTS!
The lying by the New Republic journalist in today's NPR report seems tame to all of this doesn't it!
'Inflation as measured by the core C.P.I., which strips out volatile prices for energy and food, edged up 0.2 percent in April, making it the third increase of that size in the last four months, the department’s Bureau of Labor Statistics'
'We rarely buy a new house or a car, yet we are very sensitive to prices of ordinary purchases like food, fuel, phone services and personal care products. This new measure, dubbed the "Everyday Price Index," is running at 7.2%'.
'You need to know the CPI for the starting and ending dates. So the CPI index in July 2000 is 172.8 and the CPI index is 219.964 in July 2008. (Note they went to a three decimal place accuracy in between).
The formula is: (end -start)/start
so we have (219.964-172.8)/172.8 =
Now that has to be converted to a percent so we multiply it by 100 to get 27.29% inflation'.
Definition of 'Inflation'
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.
Investopedia explains 'Inflation'
As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year.
Most countries' central banks will try to sustain an inflation rate of 2-3%.
Inflation vs. Consumer Price Index – Do you know the difference?
by Tim McMahon on August 18, 2008 Inflation Data.com
Many people are confused by the difference between Inflation and the Consumer Price Index. The Consumer Price Index is as its name implies an index, or “a number used to measure change”.
The Consumer Price Index (CPI-U)
The government chose an arbitrary date to be the base year and set that equal to 100. Currently that date is 1984. (Or more accurately the average of the years 1982-1984) previously the base year was 1967 (they change the base year every once in a while so you don’t notice that there has been over 2000% inflation since the start). See Cumulative Inflation Since 1913.
Every month the Bureau of Labor Statistics (BLS) surveys prices around the country for a basket of products and publishes the results as a number. Let us assume for the sake of simplicity that the basket consists of one item and that one item cost $1.00 in 1984. Then the BLS published the index in 1984 at 100. If today that same item costs $1.85 the index would stand at 185.0 of course a group of items would work the same way. If you have 100 items each would account for 1% of the total index.
By itself that does not tell us what the current Inflation rate is. We must do some calculations using that index to tell us the Percentage of increase or decrease in the level of prices.
So How does Inflation or Deflation relate to the CPI?
“Price Inflation” is the percentage increase in the price of the basket of products over a specific period of time.
“Price Deflation” is, of course, the percentage decrease in the price of the basket of products over a specific period of time.
For convenience Price Inflation has been shortened in common usage to simply “Inflation” and similarly Price Deflation has been shortened to “Deflation”.
(*Interestingly this is not Webster’s definition of Inflation… More)
In order to calculate the percent of inflation or deflation we have to use the Consumer Price Index as a starting point.
So assuming You wanted to calculate the inflation rate from July 2000 until July 2008.
You need to know the CPI for the starting and ending dates. So the CPI index in July 2000 is 172.8 and the CPI index is 219.964 in July 2008. (Note they went to a three decimal place accuracy in between).
The formula is: (end -start)/start
so we have (219.964-172.8)/172.8 =
Now that has to be converted to a percent so we multiply it by 100 to get 27.29% inflation.
Normally, the inflation rate is calculated on an annual basis for example from July 2007 until July 2008. That will give you the amount of inflation in one year. Which is typically called “The Inflation Rate“.
So from this example we can see how the Consumer Price Index (CPI) is used to calculate the actual inflation rate.
This is a 2012 look at food inflation and as we all know food prices are skyrocketing. You don't need to be a rocket scientist to see a box of cereal shrink as prices rise equal higher costs! Food inflation in 2013 is higher than the 4% below!
Food Inflation May Rise to 3% to 4% in 2013 After Drought
By Alan Bjerga - Jul 25, 2012 10:27 AM ET
U.S. consumers may pay 3 percent to 4 percent more for food next year, as the effects of the country’s worst drought since the 1950s work their way onto supermarket shelves, the Department of Agriculture said in its first forecast for 2013.
Beef may rise as much as 5 percent in response to tight supplies of corn, which is used to feed cattle, the USDA said today in a report on its website. The price of the grain, the country’s biggest crop, has surged more than 50 percent since June 15. Food prices will rise 2.5 percent to 3.5 percent this year, the agency said, leaving its 2012 estimate unchanged.
Raise your hand if you know that inflation in health care has been sky high for the last several years as the FED says inflation is 1-2%-----EVERYONE!
Healthcare costs to rise 7.5 percent in 2013: report
By David Morgan
WASHINGTON Thu May 31, 2012 1:29am EDT
(Reuters) - The cost of healthcare services is expected to rise 7.5 percent in 2013, more than three times the projected rates for inflation and economic growth, according to an industry research report released on Thursday.
Keep in mind that the FED policy of allowing inflation to rise and allowing the markets to normalize right after the crash would have given recession but led towards stabilization and a health economy. What the FED did was take the US economy for one last ride to move more wealth to the top and leave the US economy in what will be a considerably deeper recession/depression.
The FED deliberately gamed the system to enrich a few knowing this crash would kill US citizens for decades.
WE CAN RETURN TO RULE OF LAW AND GET JUSTICE IF PEOPLE WOULD GET BUSY AND RUN FOR OFFICE!
Bernanke on gas prices and growth
3/27/12 4:33 MSN MONEY
Sky-High Oil: Good for Jobs?
1 of 3
So it's decision time. Does Bernanke keep up his efforts to juice the economy? Or does he refocus on inflation and the price of gas -- and allow a good old-fashioned recession?
I fear Bernanke will go the wrong way and ignore the threat of rising prices. Here's why.
Everything hangs on this decision
It's hard to imagine a more critical decision, because right now, so much is riding on pain at the pump. The economy. The recovery. The stock market. The presidential race.
But Bernanke has long been committed to overpowering the business cycle through massive stimulus, pushed by a combination of personal ambition and a determination to prove right the theories he developed over a lifetime in academia. (Those theories got him dubbed "Helicopter Ben," after all.)
The problem is, the free market will eventually win. It's like trying to fight gravity. Recessions are supposed to happen. When they don't, speculative excesses accumulate until the weight of bad loans and overvalued assets collapses into a credit crisis. Frequent downturns keep the free market honest and recessions short and shallow. After all, as Fed historian Allan Meltzer loves to say, "Capitalism without failure is like religion without sin; it doesn't work."
Running out of room
To use another metaphor, Bernanke is running out of runway. He's been trying to get the economy moving with cheap cash before the nasty inflationary side effects kick in. Time's up.
He could ignore the warnings and do QE3, a third round of bond buying to pump cash into the economy. Alternately, he might merely keep interest rates near 0% through 2014 as previously pledged. The titans on Wall Street haven't been interested in the details. As long as what Bernanke does fits with the meme that central banks will support the economy (and therefore the financial markets) at any cost, they're happy.
This might keep stocks rallying for a while. But price pressures would soon have consumers and businesses cutting back. That would leave us in a stagflationary quagmire, with growth slowing and prices rising.
Or he could react by tightening the money supply or simply acknowledging the inflation risks and standing pat. The still-vulnerable recovery would stall. But the cheap-money junkies on Wall Street would be forced into rehab, the natural business cycle would be allowed to work, and gas prices would fall as recession started to bite.
What the FED policy of 0% interest is doing is manipulating interest rates at a time when corporations want to expand overseas in what is called the NEW ECONOMY.....global corporations. So, at a time when most citizens are reeling from the 2008 financial crisis and stolen wealth, these corporations are riding a BEAR TO BULL market fueled by 0% interest or free money. I spoke of QE as simply the same thing for mortgage interest rates manipulated to allow close to 0% interest in mortgage rates as massive movement of foreclosed houses to investment firms saved billions of dollars in interest payments. NOW THAT THIS MANIPULATED BONANZA HAS REACHED ITS PEAK FOR THE .05% THE FED IS NOW FORCED TO STOP THE FAKE INTEREST RATES AS INFLATION IS OUT OF CONTROL!
At the end of this article is REALITY. The FED has played the market as far as it can as REAL INFLATION is so high as to not be contained. Manipulation will no longer work. So, when the market crashes next year it will come with a few decades of fake inflation rates and no ability to manipulate out of what will be a deep recession.
THIS IS WHY YOUR NEO-LIBERAL IS LOADING GOVERNMENT WITH ALL KINDS OF CREDIT BOND DEBT------THE RICHEST WILL WEATHER THIS CRASH BY MOVING YET MORE PUBLIC WEALTH WHEN MUNICIPAL BOND DEFAULTS HAND PUBLIC ASSETS AND PUBLIC EMPLOYEE PENSIONS OVER TO CORPORATE INTERESTS!
WE CAN REVERSE THIS-----EASY PEASY!
NONE OF THIS IS LEGAL. WE CAN AND MUST GET WEALTH BACK TO THE PEOPLE BY SIMPLY REINSTATING RULE OF LAW. WHO RUNS FOR OFFICE MATTERS!!!!!
MR AND MS SMITH NEEDS TO GO TO WASHINGTON, THE STATE HOUSES, AND CITY HALLS!
Rising Inflation, Non Rising Interest Rates: The FOMC Have Their Hands Tied
May 10 2007, 09:54 Seeking Alpha
The FOMC is stuck between a rock and an ''almost hard place'.' The rock is the increasing level of Inflation and the risk of accelerating Inflation. The 'almost hard place' is their inability to raise Interest Rates in the face of it. In it's policy statement on Wednesday the FOMC disclosed that the concerns about accelerating Interest Rates were at the forefront of their agenda. Here's a direct quote from the FOMC's policy statement: "...the Committee's predominant policy concern remains the risk that Inflation will fail to moderate as expected."
I have since taken the liberty of evaluating just how serious this issue may be, and in doing so I have come to some startling conclusions. (These basis can be found in the numerous charts at the bottom of the page here). The conclusions are clear: the FOMC has their hands tied.
The first step is to evaluate Inflation, so I took a sample directly from the Bureau of Labor Statistics in an effort to gauge increases over time. My initial interest was to find the patterns of wage growth over time to determine if wage growth should be a major concern to increasing prices. The concern, I have found, is not necessarily in the growth of wages, but more so in the lack thereof.
My sample encompassed the period of 2000-2007.
Again, from the BLS, I made further evaluations of the prices of food products and energy in major US cities in an effort to understand the relationship between prices and wages. The study included electricity, natural gas, fuel oil, gasoline, bread, ground chuck, chicken, eggs, apples, oranges, tomatoes, bananas, coffee, concentrate, and lettuce. These are not lifestyle choices, these are necessities. Although these are considered the volatile part of the CPI, these are the things that we must spend money on every month in order to survive.
Clearly looking at these components on a monthly basis can distort the findings of the CPI because these prices can be extremely volatile month-month. However, on a longer term basis, like the one used in this study, the change in prices of these components is very important, and should be closely studied.
The comparisons between 2000-2007 showed me that the prices of these goods and services increased at almost twice the rate of wages during the same timeframe. Wages increased by 17.9% between 2000-2007 (weekly wages nationwide according to BLS). During that same timeframe the prices of these components grew by 37.6% (Data source: BLS). These prices outpaced wages by 110%.
How can prices outpace wages?
No one wants to sacrifice the lifestyles that they have been accustomed to if they have the choice, so if their disposable incomes start to deteriorate in relation to their day-day expenses they will first try to find a way to pay for those added costs before accepting a reduced lifestyle. This is human nature; people are reluctant to move backwards or make sacrifices unless there are compelling reasons to do so.
In the last handful of years there has been very little reason to worry. Even in the wake of the internet debacle, and even in the face of a slumping housing market more recently, the economy still looks healthy, so sentiment remains robust. That positive sentiment makes us believe that we don't need to worry about adverse economic conditions.
This has opened the door for increasing levels of debt in US Households. In fact, very recently the savings rate has turned negative for the first time. This means that US Households were actually pulling money out of their savings instead of adding to it (they would never do this if there were economic concerns unless their hands were forced). In this environment, they are doing this to maintain lifestyle.
The best way to explain the severity of this point is in graphical form. I have taken this graph from yardeni.com. It is 1 year old, but it demonstrates the dichotomy between savings and debt very well. The level of debt is escalating exponentially, while net savings is declining. In essence, we have more debt and less equity because we feel that the economy is unlikely to experience adverse conditions.
Yhis leads us to our next obvious question, a question about debt. Children often do what they see their parents doing, and the same might be true for US citizens in relation to the Federal Government. Our Government is spending money at a much faster pace than it should. In the chart below the total amount of US debt is shown to be accelerating at a much faster pace than the level of income. Really, how long can this last? If you ever wondered why the dollar is weakening, this chart can help you understand why.
Consumers are accepting higher levels of debt to afford the increasing costs of living, and they are not afraid to do so because the cost of money is comparatively low to the early 80's, which most people remember. However, Interest Rates are slightly under historically normal levels. The Fed funds rate has averaged 5.7% since 1955, and it is currently at 5.25%. The FOMC has tried to position itself in such a way as to remain flexible, and according to historical measures, it does have room to move in either direction.
But the FOMC is limited.
Money supply is plentiful, this is evident in the Money supply chart below. The abundance of liquidity has made M&A activity robust, and it has allowed the government and institutions to assume higher and higher levels of debt. Initially this could be construed as a positive thing; influencing economic activity is something that we all consider positive. However, in this case, the ability to control Inflation seems sacrificed.
Let's look at both sides of the Interest Rate picture. First, the possibilities of lower Interest Rates: the FOMC could hardly justify lowering Interest Rates in this economic environment. Money is already easy, the economy is healthy, the stock market is at historical highs, and economic activity on a corporate level is robust. Nothing in the current environment, aside from a slump in housing, suggests that the FOMC should or will cut Interest Rates anytime soon.
On the other hand, with the fear that Inflation will not moderate, a bias to increase Interest Rates to control Inflation exists. However, with the extremely high levels of US debt, and with the already slumping housing market, an increase in Interest Rates would devastate the economy.
First of all, the demand for housing is already weak, higher Interest Rates would only further that phenomena, and drive home prices lower. Subprime, in this scenario, would only be the tip of the iceberg. Next, credit card debt, and other non-mortgage related debt: according to the Federal Reserve the percentage of debt burden to income in the US is 25.5% for renters and 18.2% for home owners nationwide on average.
Historically high levels of debt limit the ability of the FOMC to control Interest Rates.
If the FOMC increased Interest Rates by just 50 basis points (to match the historical average) $240 Billion would be taken out of the economy (based on 2006 debt levels). The housing Market would deteriorate even further, the debt/equity levels of US Households would diverge even more than they are now, and the US Economy would face serious economic recession.
The FOMC is caught between a rock and an 'Almost Hard Place,' and that 'Almost Hard Place' if firming up quickly. If Inflation begins to accelerate, the FOMC will face one of the most important decisions in US History: do we let Inflation increase, or raise Interest Rates and face economic recession?
Although new data comes out at the end of this week, the higher than expected level of PPI in the last report could be a sign that eventually prices will begin to rise on the consumer side too. In the face of a slower economy, after all, companies still need to make money; Wall Street is impatient that way. If they need to do it by raising prices, they will if they can.