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发帖数: 29846 | 1 Lies, Damned Lies & The BLS Inflation Statistics
by Jim Quinn • July 20, 2015
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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 2 from 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 Studies reveals 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 McKinsey found
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 |
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