Confronting Inflation Denial: The Hidden Truth Behind Rising Prices

Confronting Inflation Denial: The Hidden Truth Behind Rising Prices

Confronting the Inflation Deniers

We are currently in the midst of the most damaging inflation period in 45 years. This inflation could potentially become even more destructive in the long term. Despite this, we are constantly being told that the situation is not as bad as it seems and that it will soon be over. However, these two realities cannot both be true.

Fast Food Prices: A Case Study

A recent image on social media has been drawing attention. It shows the price increases at major fast-food outlets from the end of 2019 to now. According to this image, fast-food prices have doubled in four years, meaning that a dollar is now worth 50 cents or even 25 cents. This is a staggering level of inflation.

This information is easily verifiable and aligns with our personal experiences. It's not just fast food either - all food, whether eaten out or at home, has seen a similar increase. However, government data tells a different story. According to official inflation data, food-away-from-home prices have only increased by about 26 percent, and general prices have gone up by 21 percent. This discrepancy between lived experience and official data is puzzling.

The Problem with Government Statistics

So why is there such a discrepancy between government statistics on inflation and our personal experiences? The answer is complex. In the simplest terms, the government's inflation calculation no longer consists of a basket of goods and services carried over from one period to the next. Instead, since 1996, economists have been advocating for "hedonic" adjustments to the index. This term, derived from the Greek word for pleasure, suggests that consumers derive more pleasure from purchases, so prices need to be adjusted based on that. However, this has led to statisticians manipulating figures in ways that are beyond all plausibility.

Accurate inflation numbers are important for a range of issues, including adjusting tax tables and cost-of-living adjustments. If inflation is not accurately captured, it amounts to a modernized version of coin clipping that benefits the government at the expense of the people.

Alternative Inflation Calculations

The website ShadowStats.com offers an alternative way of calculating inflation, using methods from the 1980s. The results are astounding, with inflation numbers that are generally twice the official data. This seems far more accurate. However, even this method does not account for all the problems.

The consumer price index (CPI) does not include interest rate costs, thus excluding all servicing of debt, including mortgages and credit cards. The CPI also does not accurately represent housing or rent due to a complicated formula called owners' equivalent rent. It also fails to accurately track shrinkflation and does not account for the hidden fees that people pay today on nearly every service or product.

The Impact of Inflation Denial

The denial of the true extent of inflation leads to a sense of bitterness. We are living through a period where the American standard of living is dramatically decreasing. Everyone can sense it. Yet, we are constantly being told by experts that all is well and that the worst is over. This has been the narrative for the past four years.

Wall Street seems to be thrilled by this narrative. Traders are even expecting the Federal Reserve to cut rates in the coming months and are buying more stocks at high prices in anticipation. This could potentially trigger another big wave of inflation in the coming years.

It's one thing to know that the experts are lying. What is frustrating is knowing that and yet being denied the truth at the same time.

What are your thoughts on this matter? Do you agree with the inflation deniers or do you believe that the situation is worse than what is being reported? Share your thoughts and this article with your friends. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.

Some articles will contain credit or partial credit to other authors even if we do not repost the article and are only inspired by the original content.

Some articles will contain credit or partial credit to other authors even if we do not repost the article and are only inspired by the original content.