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Federal Reserve Admits Truth In Internal Memo: "Prices Continue To Rise Between 3% And 33%"
We are confused: on one hand the Fed is injecting hundreds of billions of liquidity into the market, boosting the S&P to all time highs and making the rich richer (Piketty taking Excel lessons from Rogoff notwithstanding) while the economy remains stagnant because, according to the BLS, inflation is too low, and as everyone knows the biggest lament of the impoverished middle class is that "the value of my dollar isn't being destroyed fast enough for me to feel confident about the future." On the other hand, the very same Federal Reserve Bank (of Chicago), just announced that as a result of "prices continuing to increase between 3% and 33%" (!), beginning May 27 it is hiking the prices in its cafeteria. So, clearly prices are rising at a 33% clip due to, how does the IMF put it, lowflation, right? Oh, and harsh weather.
From the Chicago Fed, highlights ours
Subject: Reserve Center Cafe changes coming
Reserve CenterTM Tenants,
Due to rising product prices in the past several years, The Reserve Center will increase its prices in the cafeteria effective May 27.
Over the past five years, many of you may have experience product price increases in grocery stores. Prices continue to rise between 3% – 33%. For the past eight years, The Reserve Center has been absorbing these increases. The last overall price increase in The Reserve Center cafeteria took place in 2006, followed by a limited increase on sugar-based products in 2012.
For the upcoming price increase, a thorough review of café items was conducted and, while some prices will remain flat, others will increase to recognize these market increases. The price increase will help The Reserve Center cafeteria continue to maintain high standards and service levels by providing quality products.
Another change includes the introduction of new menu program changes to provide greater variety as we continue to refresh the cafeteria menu offerings. In the following months, we will be distributing a survey to obtain feedback on these new menu changes, as well as your food preferences so that we can continue to tailor menu offerings based on input we receive from our customers.
Lastly, we've reviewed feedback and in response The Reserve Center cafeteria will now close at 1:30 p.m. on Fridays. However, July 11 tahrough Aug. 29 we will close at 1 p.m. as the traffic is lighter due to vacations.
Thank you for your continued support of The Reserve Center cafeteria.
Federal Reserve Bank of Chicago
* * *
The good news (for Fed employees): as we reported last year, the average annual increase in the salaries of Federal Reserve workers over the past year has been around 13%, so a price hike should be bearable.
Everyone else? As we showed in "Real Hourly Wages Decline For The First Time Since 2012" better luck next time.
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Mindless... I am sure drugs have a lot to do with crimes in America involving psychoes.
Food Prices (and other prices) are not rising because of inflation. We do not have inflation in the U.S. and most other countries. Rather, we are in a deflationary economy. The reason that these prices are rising is because of various impoverishing events: oil is harder to get out of the ground. Fertilizer is harder to get because it takes more effort to mine potash. Soil exhaustion from modern farming practices is a major problem. Irrigation destroys farmland due to salinization and destruction of soil microbes. Also, water is becoming harder to get. Monoculture farming leads to explosions of insect and fungus populations. Etc.....
Things are getting more expensive because we are getting poorer. Inflation has nothing to do with it.
Then stop printing.
Um, your argument that things are getting more expensive because the real world costs, rather than the nominal costs, is going up has some merit, however:
http://research.stlouisfed.org/fred2/graph/?id=M2NS,
We just need to wait until this one starts going back up:
http://research.stlouisfed.org/fred2/graph/?id=M2V,
Deflationary economy? Not with the Fed. You can pile monitary inflation on top of all of the resource issues that we are starting to experience. It's a perfect storm, and it's going to get ugly.
But the velocity of money is not going to increase, because we are in deflation mode. Everybody is hording cash, because of 1)Fear and 2) the opportunity for profitable invetment is shrinking. Because we are getting poorer.
When the finical colapse comes, trilions of dolars in paper assets will simply disappear. The resulting deflation will be unprecidented, far worse that the Great Depression of the 1930's. This time there will be no recovery.
What, are you suggesting TBTF banks will go bankrupt? That the US gov't will NOT PAY ITS DEBTS?
You are half right. Its the deflation that will trigger the currency death/hyperinflation. Ka-Poom Theory.
Technically I guess you are right D. But increasing prices are perceived as inflation by most people and for good reason. I think you will have to make a distinction between 'inflation' (price increases) and inflation (supply of money) for your argument to be understood. I agree that we are seeing prices go up based on increases in the cost of energy and fertiliser (among other things). This has already resulted in strikes at McDo and other places by people asking for higher wages. This is an 'inflationary pressure' that will increase. Also I think that the increase in equities is highly inflationary - there are many tales of people spending their earnings from last year's huge increase on new cars, etc. In general the average person is getting poorer and should fight for higher wages if they are employed. This is leads to higher prices and 'inflation'. Technically this all leads to higher prices. The supply of money is set to go up via QE there so I guess we can also say that the currency wars will lead to real inflation. Where is the deflation in all of this?
Seeking,
I wrote the post because I get irritated when I see people using the term inflation to mean price increase. “Inflation is always and everywhere a monetary phenomenon”. Inflation can cause price increases, but price increases cannot cause inflation. The hallmark of inflation is that the resulting price increases occur across the board, not just in one market. At this time, wages are not increasing. That pretty much excludes inflation as the cause of any price increases we may see. Of course that could change in the future.
The problem with confounding “price increase” with “inflation” is that it leads to the false conclusion that monetary policy is to blame to an increase in the price of bananas, not the banana blight.
Of this I am quite sure: the economies are not growing because we are running up against fundamental limits on the ability of the planet to provide more wealth. No amount of QE, redistribution, entrepreneurialism, innovation, free market policies, social justice or technological progress is likely to change that.
Seeking, with all due respect, don't tell him to make a distinction between two uses of the word inflation, one of which is wrong! It would be much better if you start using the word inflation correctly. Or don't use it at all....that works, too. :)
Call an increase/decrease in the money supply just that.
Call an increase/decrease in prices just that.
Don't even use the word inflation if you can't use it correctly. If you call things what they really are, you can achieve economic clarity and make better decisions.
Try it. There are currently about 4 or 5 people on ZH who know this. I would love for you to join that group. :)
doofenshmirtz,
Wow, I think we're up to five people who understand that price increases are not the same as inflation! There may be hope yet. Of course, you got a lot of down arrows, so there may not be hope.
Inflation = Increase in money supply
Price increase = Price increase
If you use these terms correctly, you can get closer to economic clarity.
We are in a deflationary environment because money that was created out of thin air is disappearing back into thin air FASTER than the Fed is printing and FASTER than new credit can be created. It's over, people.
Yes, prices of food are going up. When you slaughter all the cattle due to drought, then prices are going to rise. That has nothing to do with the money supply increasing, unless you mean food stamps. Since they spend like real money, they drive up demand, which drives up prices. THAT IS HOW INFLATION WORKS.
Meanwhile, every credit card default, every mortgage walk-away, every student loan default, is money in the system going POOF. And on the other side of those loans were somebody else's assets. POOF. POOF. POOF. Pensions. Banks. Insurance companies. Governments.
Deflation.
It's absolutely amazing how much pain and suffering these few bastards are distributing in America right now. Tic toc.
Some food prices are going up due to drought, etc. But most prices are increasing, despite declining demand, due to finance carrying costs. When every single transaction carries a fee or a percentage cost, and there's interest compounding, there will be inflation. It doesn't just have to be "too many dollars chasing too few goods." That's why the Fed has historically sought 2%-3% annual inflation. Why would anybody take out a loan at interest today if they didn't think their income would be higher in the future?
The Fed's problem is that the finance system broke irretrievably a few years back, but they decided to fix it on the sly. With the trillions they've printed out of thin air we should have raging inflation. But that money has been in a closed loop, like the dead guy in the field hospital in "Catch-22"; they run one bag of fluid into the patient, and another catches what comes out of the patient, and a couple of times a day they switch the bags. This money runs through the banks in exchange for the worthless derivatives, then the money runs through Treasury bonds. The interest rates have to be held low to keep the swaps from blowing up, and to keep the government form obviously going broke paying on the Treasury bonds.
Meanwhile, the debt that blew up 6 years ago is still on the books, accruing interest, which has to be paid out of the shrinking revenue available to the rest of us. That's why, outside of droughts or blights or what-have-you, the cost of food has to go up, whether it's the same price on a shrinking container, or reduced quality for the same price, or outright price hikes.
Federal Reserve workers' wages must not show up in official statistics. If they did, they sure wouldn't be going up 13% over the past year. Only people whose wages aren't derived from hourly employment see raises like that.
And the Fed will keep buying because increasingly the foreigners are not buying.
Through the years of confusion, whereby the Fed has created with a kind of cover up concerning “fractional reserve banking” and lies on inflation, deflation and monetary controls, clear understanding is now emerging on the tragedy of central banking.
No clearer evaluation of this danger exists than the 1999 statement of Lord Sudeley in the House of Lords:
The only way in particular to stop inflation is to stop banks from creating credit. The supply of money should be removed from banks and should be assumed by governments, who should issue it on a debt-free basis. Such a view is supported by five disparate quarters: the noble Lord, Lord Beswick, in the debate which he introduced to this House in 1985, Disraeli, the Vatican under Pope Pius XI in his Encyclical Quadragesimo Anno in 1931, the Tsars of Russia in the last century, who prevented the setting up of a privately owned central bank, and, above all, Abraham Lincoln, who said that governments should create, issue, and circulate all currency and credits needed to satisfy the spending power of governments and the buying power of consumers.
By adopting those principles, the taxpayer would be saved immense sums of interest. Lincoln’s greenbacks were generally popular, and their existence let the genie out of the bottle with the public becoming accustomed to government-issued, debt-free money. The year after Lincoln’s assassination, Congress set to work at the bidding of the European central banking interests to retire the greenbacks from circulation and to ensure the reinstitution of a privately owned central bank under the usurers’ control.
During the history of the United States, the money power has gone back and forth between Congress and some privately owned central bank. The American people fought off four privately owned central banks before succumbing to a fifth privately owned central bank, at that time essential, owing to the period of weakness during the Civil War.
The founding fathers of the United States knew the evils of a privately owned central bank. They had seen how the Bank of England ran up the British national debt to such an extent that Parliament was forced to place unfair taxes on the American colonies, leading to their loss following, the American Revolution.
I now conclude. Once the fundamental decision is taken to prevent sterling from being debt-based, the Commonwealth could act as the right monetary union to use sterling debt-free as a genuine alternative to the dollar and the euro.
http://wiki.mises.org/wiki/Criticism_of_fractional_reserve_banking
Tsar Nicolas, Abraham Lincoln, and could we add John Kennedy, Muammar al-Gaddafi and Saddam Hussein, while discussing opponents to non-government currencies…could there be a pattern here? Assassination.
And with the world’s central bankers now pushing hard against the boundaries of the Russian Federation with its new partners for a possible competing reserve currency would Putin be advised to double his personal body guard detail?
Redstone
I think there was another one, McKinley if I am not mistaken who was also shot. Andrew Jackson actually did print gold backed currency for awhile and told the bankers he would rout them. Both guns failed to go off during his assassination attempt. He was buried as he wished, his tombstone read "I killed the bank". Soon after his death the bankers began printing fiat currency once again. His vice president actually shot Alexander Hamilton, Rothschild's son in law. I think that is correct if I remember right.
The USA you grew up in is no longer! Hedge accordingly.
This is not inflation, it’s price increases. – Ben Bernanke
Inflation is less than 2%; price increases are 33%.
Economics professors from the Ivy league are also taught to include humour in their skill set. Who knows one day you may become the Fed chief.
Priceless!
Mislabelling inflation: it's tradition!
How bad is it?! When they have to acknowledge the truth, at least partially, things are really bad.
"Cost of guillotine blade oil has gone up 8% in the past year."
Crimes of high treason...
no no no ...it is "low treason", this is high treason
http://news.yahoo.com/iran-billionaire-executed-over-2-6b-bank-fraud-104...
A total of 39 defendants were convicted in the case. Four received death sentences, two got life sentences and the rest received sentences of up to 25 years in prison.
:)
This is the real reason the US wants to blow Iran off the map. Doesn't look like he could buy his way out there - so who is really the more corrupt country?
"A billionaire businessman at the heart of a $2.6 billion state bank scam in Iran, the largest fraud case since the country's 1979 Islamic Revolution, was executed Saturday, state television reported"
"The fraud involved using forged documents to get credit at one of Iran's top financial institutions, Bank Saderat, to purchase assets including state-owned companies like major steel producer Khuzestan Steel Co"
http://abcnews.go.com/International/wireStory/report-iran-billionaire-ex...
Sadly, we must look to Iran, of all places, to find a glimmer of proportionate justice.
Criminals are running our democracy and relabeling blatant fraud as merely being a financial service product.
It's like a roller-coaster for quadrillionaire thieves!
To get the big big bonus you must be 'this tall to ride' as in 'you must steal at least the GDP of 3 small countries' in one fell swoop.
Only this time 'big bonus' is following the proper path it should in Iran.
Yeah, the treason is kinda paralleling the stock market these days...a new high every week. Eeek!
I'm going to enjoy watching them be relieved of their ill gotten gains.
;-D
And the Federal Reserve subsidizes part of the cost of cafeteria meals in its facilities.
There'll be 7 billion people plus the military coming for you Bernanke M'fer when the SHTF. Smile while you can.
Rome was able to control it's citizens as long as it could buy wheat to give them. Then more powerful enemies arose to disrupt supplies, and when Rome devalued its currency into bronze fiat it could no longer afford to give its population free food handouts nor pay its armies to defend itself. Hmmm, this sounds familiar to a certain country today...
Bread and Circuses... Huh! I can't imagine who you are talking about ;-D
The Federal Reserve Cafeteria can lower costs for all of it's employee's by accepting bitcoin as payment therefore lowering transaction fees charged by Visa, Mastercard, American Express, etc. Those savings can be passed to their diners ensuring a convienient and cost effective way of paying for their meals.
And if, for example, a Fed employee had purchased bitcoin 1 week ago and enjoyed the 30% increase in value he actually would be paying 30% less for his lunch rather than 30% more. When goods are cheaper people have the ability to buy more and that stimulates the economy!
I'm a cashier in a major retail chain, and can't believe what customers are paying, two Russet potatoes for $2.20. Almost two dollars for a big orange. Well over a dollar for an onion. Could go on and on. To see the Fed promoting inflation as their QE's keep piling ever more massive debt on our backs, what an outrage! What utter treason! Their policies show they don't care one bit about those strugging every day to make ends meet!!
The worst thing of all about the demon of fiscal insanity possessing president Obama and Congress is that they keep right on doing the very same thing that brought us to this point!!! Damn the torpedos! Their actions and policies loudly proclaim to the entire world, "Economic collapse?? Bring it on!!"
A bit off point here: In my local grocery store they have started asking for ID to buy alcohol. I'm in my obvious mid 50s...and they want my ID? Not a birthdate, mind you but actual picture ID to buy beer. I see an Obamacare connection. You drink too much, so your insurance rates must go up due to your "unhealthy lifestyle". Wonder when this will begin for tobacco products?
I've considered refusing ID requirements. I'm young looking, but sick of gross incompetence/mindless drones. Not under 21 looking....
Those are luxury-level prices. How can your outlet sell at those prices? I pay less than half that price anywhere I go.
Calm down, disconnect between statistics and reality is a completely nomal symptom in central planning.
yellen and bernanke don't eat in that cafeteria, they go to 250K lunch with their masters.
If you think food prices aren't manipulated, guess again.
So, now we have to pay higher prices to the very companies that get corporate welfare in every state in the union.
The following New York Times article from 2012 shows that companies across America have been getting huge tax breaks but doing little or nothing in return:
As Companies Seek Tax Deals, Governments Pay High Price
http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corpor...
The New York Times also put together a huge database showing business incentives that are given out in hundreds of American cities: http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html
It takes very little thought to come to the conclusion that these business incentives are part of an elaborate kickback scheme in which businesses give campaign contributions in return for tax breaks and loans.
The average person can only conclude that companies are running fake job ads as part of agreements from various states that have given them tax breaks and other incentives. After all, big business has to help state governments and the federal government make the unempoyment rate appear to be low.
'unending wars are the, 'cause and effect' of unimpeded inflation obscured by the printing-press where deflation is characterized by government's nonsequitur 'tilting`at`windmills'... ,hence, OBi1 plays Quixote's role of an intoxicated machiavellian protege de`jour... a feudalistic ormolu of subsidiy on a prerequisite, 'raison'd`etre permanent basis, whence only the peasantry/proliteriat feel its wanton`hunger for yesteryears...'hue`ing and cry`ptography' lost civilization?'
this is why japan entered ww2, and why china's democratic party lost out to the communist?
"What difference does it make?"... when all it takes is 'hope and change'... and a 'yes we can' altitude, with a topping of 'It takes a Village?" from hillarious
jmo
Why doesn't the fed just do the "substitution" thing.
Greenspan often said replace beef with chicken if beef got too high.
Replace beef with say.....cardboard.
oops....I think that has inflated too.
Any other ideas?
Hamburger Chia Pets, cheese xtra.
This sort of tongue-in-cheek exposing contraditions between what they say and what they do is getting old. We know they always say one thing and do something else. Lies upon lies. Nothing but lies.
We know this govt has degenerated into a criminal syndicate stealing all our wealth and turning us into sharecroppers on govt controlled land with no rights at all, totally at their mercy. We don't need article after article giving every little detail of this slide into communism.
Nor do I believe Americans will do anything to counter it. Just stand by watching it happen, including all those so-called "patriots" out there.
Communism is the future of America. Communists in suits and ties, not red uniforms. Constitution will be a historical relic. It pretty much is now.
Americans don't even know what these 'ism' words mean.
COMMUNISM is where all are forced EQUAL, no matter what else must be broken to do so.
That's not America now or trending that way.
SOCIALISM requires OWNERSHIP of the MEANS OF PRODUCTION by the HUMAN, NON-CORPORATE people.
That's not happening either.
FASCISM is the merger of corporations into the government. THAT is what you have.
What is Fascism - John T Flynn - Von Mises - youtube
http://youtu.be/4Ml7-aDXrgQ
Look, as long as all the counterfeit printing ends up only in the hands of the less than one percent--->the value of that currency(especially if its the defacto currency used in trade) is not affected. Last I looked people are still poor, 100 people made more than $400 billion in profits last year (up from $250 bln in 2012) so no need to worry about inflation. Now if these people did what Oxfam suggested they do, solve global poverty, then all of a sudden we would have an inflation problem. But as of now, no velocity, no need to worry
and what sort of Swiftian fare would the Maestro like today? some boiled appalchian urchin? or perhaps a smoky self immolated college student, bathed in a sauce made of student loans, on a bed of no job prospects, and plucked from the basement of his parents home. bon apetit!!
"prices continuing to increase between 3% and 33%"
What difference does it make? Everybody knows the cost of food doesn't contrubute to inflation because it isn't counted in the offical numbers.
Damn!
I'm gonna go out and get me a guverment job. Sit on my ass all day, do virtually nuthin'. Can't get fired unless I become a whistleblower. Guaranteed fat ass retirement. Livin' off those STUPID, clueless taxpayers. What was I thinkin' by working so hard in the private sector for 45 years (I'm 61 now) and NEVER, EVEN ONCE taking unemployment or welfare??????
Juss gimme a guverment tit and I'll suck it dry!
AND! If you work for the Detroit water & power you can sleep in at your desk until the overtime hours kick in and then 'work' and get a fat pension with fat benefits!
Taxpayerz be suckaz
I "vote" anarchy. Get it? "Vote" ha-fucking ha!
FED should be dead....but no, it keeps on giving.
Inflation is too low? Are these kite flyers walking on the ceiling? HAve you gone to the supermarket for the past 5 years? Bastards!
Inflation is too low? Are these kite flyers walking on the ceiling? HAve you gone to the supermarket for the past 5 years? Bastards!
Inflation is too low? Are these kite flyers walking on the ceiling? HAve you gone to the supermarket for the past 5 years? Bastards!
The author should have given credit to David Stockman for the graphs. Unless of course the author is Mr. Stockman.
http://davidstockmanscontracorner.com/these-charts-should-tick-you-off-federal-reserve-salaries-up-13-annually-everybody-else-on-the-flat-line/
speaking of all this shit, political science,
derived from religion and mastiffs, kingdoms,
nations, governance, economics, science and
all the self-isms. the individual person is the instrument
and the target of some mind, the bulls-eye and the arrow, to be
owned as a property, contract collateral or destroyed
as so much raw materials, recyclable as just matter itself.
.
here the dead story of dead, gone in the shadow.
.
(Full) In the Shadow of Hermes by Jüri Lina (2009)
https://www.youtube.com/watch?v=oIuW-vNQsQI&feature=kp
.
who needs all this? i, almost, give up
Put the cafe chef in charge of the economy, he understands whats going on much better!
The art of government is to make you believe that's it just YOU that isn't doing well.
After much thought I have come to the conclusion that while inflation appears tame and is not showing up in a big way the seeds have been planted, and the number of them is somewhat shocking. Inflation lurks beneath the surface and is hidden away in the dark corners of our future.
Want to know where the real cost of things is going, just look at the replacement cost from recent storms and natural disasters. Several things to consider when trying to understand inflation come to mind, first competition tends to keep price increases in check, and our slow growth economy is helping the consumer in many areas, but the monster when unleashed will take a very large toll! More on this subject in the article below.
http://brucewilds.blogspot.com/2013/06/inflation-lurks-beneath-and-hidde...
what does an obese govt worker do if he can't afford the canteen?
get diagnosed with ADHD so he can get a prescription for Adderall or the generic : Amphetamine Salts
No, they go on disability, and do very nicely indeed.
http://www.breitbart.com/Big-Government/2013/08/15/Convicted-Jackson-Jr-...
oh no! I'm suffering from fattopiggius eatonormous, I need disability!