How The U.S. Government "Covers Up" 72% Inflation Before Your Very Eyes

Tyler Durden's picture

Dear Bureau of Labor Statistics: please pay careful attention to this case study of how your CPI "inflation" gauge, hedonically, seasonally-adjusted or otherwise, is completely inaccurate, and how what you record as 0% inflation is really 72%.

As Consumerist points out, for the latest example of "stealth inflation" we go to Sodastream, where as part of a redesign of its proprietary line of flavoring syrups which "cost the same" the actual bottle contents are now not only smaller but also diluted.

"How much smaller? The old version made 50 servings of flavored drink, and the new versions make only 29. Why 29? Why not 30? Such are the mysteries of the Grocery Shrink Ray."

Consumerist shows that "the new bottles are somehow taller even though they’re smaller. On the positive side, they no longer look like petite laundry detergent bottles."

Furthermore, while the number of servings is down to 2/3 of the original amount, the bottle size isn’t that much smaller. That’s because the measuring cap is now bigger, and each serving uses more syrup. "The worst part is that they just diluted it with more water so the ‘new improved’ ones LOOK like they are the same size," reader Erik complained to us. “They are 440ml instead of the old 500. EVIL! Free the bubbles! Stop this shrink ray occupation of my favorite soda!”

The old versions are still available on SodaStream’s site for now, as "Classics," but readers report that they only find the shrunken version in brick-and-mortar store.

Consumerist' conclusion: "maybe SodaStream made this change because they know that the product still looks reasonably priced next to its new competitor, the Keurig Kold. Maybe."

Actually, why SodeStream did this is irrelevant: we are confident the decision to shrink and dilute the product was the result of simple concerns about maximizing profit margins.

What is far more troubling is that for the Bureau of Labor Statistics, both the "old" and the "new" product costs the same, or $5.99, hence there is no inflation... until one does the actual math.

Presenting the "old", Dr. Pete soda mix, the one which is no longer available in bricks-and-mortar outlets, which costs $5.99 and which makes 50 servings per bottle.

 

And here is the new one: available everywhere for "the same price as the old one" but with one small difference - it makes only 29 servings per bottle.

 

The math:

  • Cost per serving "old" style: $0.1198
  • Cost per serving "new" style: $0.2066

Nominal inflation: 72.4%

Worse, there is not even an attempt to make the "new" product "hedonically" better, or for that matter different in any way - it is just smaller, and massively diluted.

And it just so happens that nobody in the Bureau of Labor Statistics noticed this oldest trick in the book, and why month after month the BLS reports core CPI that is negligible, and why said "lack of inflation" allows the Fed to continue its zero-interest rate policy for 7 consecutive years in a row.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Stevious's picture

Country Crock Margarine

Old: 1.36kg New container: 1.27kg

New formula:  New! Natural ingredients added = Water!

Old content vegetable oil: 52%

New: Vegetable oil content: 39%

Overall though the product looks about the same it's a ~33% increase.

They ought'a call it Crock of **** margarine now.

This is happening everywhere.

Shrimp: "Large shrimp" labeled now is what I call medium or small.

The worst is adding massive amounts of water (~15% to items like Chicken). 

America's consumers are stupid

Normalcy Bias's picture

This reminds me of Ferfal's The Modern Survival Manual: Surviving the Economic Collapse, written by a guy who lived through the collapse in Argentina. There are so many paralells to what's going on in the US, they're hard to count. Highly recommended...

http://www.amazon.com/The-Modern-Survival-Manual-Surviving/dp/9870563457

seek's picture

That's "Ferfal." For what it's worth, he's super accessible via his own website forums and a couple of the larger survival forums (I think the ones on ar15.com and ovet at survivalistsboards.com) He's got a recent posting with information from people in the Ukraine that's especially interesting.

If anyone has any doubts about these adjustments, just buy a roll of TP and compare it to the size of the TP holder in any house older than 10 years, it's quite obvious. I have TP that predates the '08 collapse of the identical brand and product line, and it's at least 1/2" wider and wrapped more densely as well.

There is substantial inflation, and it's covered up, and there's no interest being paid by banks but they're charging the average credit card holder something around 14.9 percent. Meanwhile 51% of workers in the US now make under 30K a year. The financial system is absolutely raping the common people in the US, in part due to greed and in part in a desperate attempt to save itself from collapsed caused by their greed accumulated over the past 100 years.

TBT or not TBT's picture

I am shocked, shocked, to find stealth inflation going on in this establishment!  

TeamDepends's picture

That's like the old 24 pack of sliced cheese is now 20 for for the same price. No, there is no "Now Four Slices Less!" promo on the wrapper.

Jendrzejczyk's picture

Silly Wabbit, it's now healthier with fewer calories.

LowerSlowerDelaware_LSD's picture

The sad thing is that there are so many ignorant dupes out there who blame employers/manufacturers ("Arrrrgggghhh!!!! Big Oiiiiiil!!!!!" for example) for higher prices when it is completely a function of the Central Planning government and Fed.

WELCOME... to gubmint education.

Supernova Born's picture

Every ZH'er should support FerFAL's books (it is the 7.62x51 rifle his "name" is referencing, FAL being an acronym for Fusil Automatique Léger ("Light Automatic Rifle"), and the first three letters are from his first name, Fernando).

Surviving the Economic Collapse is filled with great insights and has proven prophetic.

First thing I think when I see shrinking retail packaging and lowered quality (diluted in the case of SodaStream) was FerFAL said this would happen...

Supernova Born's picture

Hillary will be to the US what Pres. Cristina Kirchner is to Argentina.

 

 

LowerSlowerDelaware_LSD's picture

What Castro is to Cuba.  Dear Leader to North Korea.

rccalhoun's picture

steak for hamburger

then hamburger for hot dogs

imaginalis's picture

The political class finds two things to solve this. A patsy and a vice president.

tenpanhandle's picture

Even my bottled water is watered down.  But on the plus side, the salt I buy now is healthier; it contains less sodium.

Soul Glow's picture

The dollars we use to donate are becoming worthless so donate moar - 

http://www.zerohedge.com/donate

Laowei Gweilo's picture

this is happening with almost every product you can imagine...

 

here in Canada, it's especially been pronounced with food like bacon... prices are still the same but now the packages are all 1/3rd smaller. 

VinceFostersGhost's picture

 

 

I particularly love convex bottom round containers.

 

It looks big....but it's not.

Rubbish's picture

Ah the old switcheroo, if they were really good at marketing they would take 1 more ounce out and drop the price .10 cents and advertise "New Lower Price"

 

Gold bitchez.....I pick up pennies

MontgomeryScott's picture

I'd rather buy pastuerized processed cheese food product over REAL cheese, ANYTIME!

I'm too uncoordinated/weak/lazy to cut slices off of a brick (and knives are DANGEROUS). BESIDES, I can let the clill'en dispense their OWN food product (or have fun in their bedroom having 'spray cheese food fights').

I really don't think GMO stuff and hot dogs are that bad. They taste good, and after all, Soylent Green is better for you (The FEDRES said so).

Dave Thomas's picture

Don't forget the ever vanishing pound. If you do a bunch of cooking, they always reference the pound as sort of like the standard. Well good luck finding a pound of sausage, bacon, or butter anymore. It's more like 14.5 Oz, 12 Oz. Etc. Don't even get me started on coffee.

 

SWRichmond's picture

Bag of sugar is now 4 pounds instead of 5

Took Red Pill's picture

and a half gallon of ice cream is now down to 1.5 quarts

RafterManFMJ's picture

...and my penis is now 4", when it used to be 6".

 

There's sadly no escaping this, for anyone.

Talking about Ferfal one thing he brought up and I found interesting is how farmers in isolated, rural compounds were overwhelmed at night, and their entire families tortured to reveal where they had hidden their goods/valuables.

Many farmers had dug escape tunnels after the attacks became common knowledge so they could escape their house, regroup and flee.

Oh, and the groups doing the attacking, the murder, the torture? Former special forces from the military, and police. Yeah.

So all you dopes who lol at torture used overseas... well you may get to experience it first hand if we collapse that bad. Probably not as funny to experience it yourself.

TruthHunter's picture

steak for hamburger

then hamburger for hot dogs

 

Eventually SOYLENT GREEN?

OceanX's picture

Ya'll slam Castro and what he did was kick out the banksters you profess to hate.  The way I see it,  what happened to Cuba was the retalliation of the banksters.  He was blocked from global trade and financing.

In addition, the conservation of their natural resources have preserved Florida's fishing waters! 

http://www.amazon.com/Deep-Cuba-American-Oceanographic-Expedition/dp/082...

When therre is an offshore oil spill in Cuba, it will be carried by the Gulf Stream all across the Atlantic and destroy a lot of Florida beach.

44magnum's picture

Supernova Born What the fuck does that have to do with zionist soda asshole

Colonel Klink's picture

And he definitely is!  Sodascumbag is just peddling poison that the dupes are willingly consuming.

A Nanny Moose's picture

Yup.

 

inflation is always and everywhere a monetary phenomenon - Uncle Milt.

laomei's picture

it's gluten free, cus they replaced the flour with sawdust

Mentaliusanything's picture

Wait till you get the 24 pack of cheese that is sliced so thin its weight is the same as a 12 slices.

Now go study Square Inches... I swear they are shrinking the cheese in area (or the bread is getting larger)

SafelyGraze's picture

that's one heckuva avatar you got there, mentaliusanything (if that is your Real Name)

by any chance do you happen to clean hotel rooms?

hugs,
DSK 

Gaius Frakkin' Baltar's picture

Yeah, the sliced cheese is so thin now you can't pull the pieces apart without them disintegrating.

The local supermarket drywalled over the windows looking into the meat processing room. I don't want to know what they're putting in the hamburger or doing to the meat now.

Took Red Pill's picture

yes, hamburger has "fillers" added, basically grains. Speaking of grains, cereal boxes are thinner so they look the same size from the front but contain much less cereal.

El Vaquero's picture

Speak for yourself.  I didn't draw for elk this year or last, but because I helped a friend's son whack one a couple of weeks ago, I got first dibs on the elk that was still in their freezer from last year.  It keeps for 2 years.  Because my friend's son got his elk, he said that if he gets a deer this year, I can have the meat if I go on the hunt with him.  I don't even know what hamburger costs these days.  But I do know that a small amount of beef fat is added to the elk and deer just so that the burgers will stick together becuase I know the butcher that he uses. 

nosam's picture

The reduction in product sizes and quality is not so much a measure of inflation as a measure of the declining wealth of the population. People can afford less so the manufacturers change product size/quality to match.

The area I live in now has high inflation but salaries are growing at a faster pace. So I notice a gradual increase in quality and size of products.

That said, if you can afford to pay premium prices, you can get good quality pretty much anywhere.

steveharless's picture

Mentaliusanything - the same with bacon...the corporations slice it so thin.... it sucks.

mkkby's picture

Anybody remember when a case of beer was 24 cans?  Now they are all 20 or 18.  I guess they figured drunks have short memories.

ebworthen's picture

"1/2 gallon" of ice cream now 3 pints instead of 4 pints, canned vegetables going to 14 oz instead of 16 oz, "1 pound" bacon now transforming to 12 oz "healthier" packages with a "great price".

I swear to God they are going to sell a "bakers dozen" of 10 eggs instead of 12 for the same price 'ere long.

TeamDepends's picture

It's nuts, sometime over the summer the cans of tomatoes we buy went from 14.75 oz to 14.0. Are they going to start making the cans thicker? Will the cans shrink to G.I. Joe size? Times is tough, people!

Whodathunkit's picture

Buy the imported brand from Europe. They haven't caught on to the smaller size package same amount of $. YET

Soul Glow's picture

Wait until Draghi gets ahold of 'em.

Escapeclaws's picture

Not true that Yurp doesn't have the same problem. Just look at tuna: smaller can, half-full, higher price. Same with everything. Inflation gets going because of corporate greed, which they "justify" by saying their costs are going up. It's a scam through and through. About time someone does a study to analyze when their costs really go up as opposed to them "claiming" their costs are going up. This inflation is a form of SYSTEMIC PRICE FIXING. Because it is systemic it is not considered price fixing as such from a legal point of view, so they get away with it. Like everything the elite does, they have total control and we are obliged to accept it. Same story with "gotcha capitalism". They pump a bag of potato chips full of air and then use the excuse that the the chips, which are cozily nestled in the bottom quarter of the bag, are being protected that way. Kind of like the mafia killing one of your kids and then offering to protect the others for a small stipend.

The Yurpeans also pay much higher prices due to how things are packaged. I buy dried beans and pressure cook them, but even there, you cannot buy beans in bulk. Instead you must pay an arm and a leg for a small package. It has gotten to the point that if a bean falls to the floor, I search for it like the widow searching for her lost penny. Pretty soon they will be packaging single beans. I figured that out using mathematical induction.

Eventually, we former middle class people will enjoy the same standard of living as the poor in the third world. 

 

 

 

El Vaquero's picture

Not to mention that a lot of the "tuna" that you buy is not actually tuna, it is escolar. 

GMadScientist's picture

Canned tomatoes may have been processed in a facility that also processes horse meat and/or vegemite.

Caught_Fish's picture

G'day, here in Victoria Australia supermarkets are required to show the unit price on the shelf label. It makes it very easy to choose the item based on price. E.G. toilet paper and tissues would show 20 cents per 100ea brand A and 25 cents per 100ea brand B regardles of the carton total.

Bunghole's picture

I can see unit prices here in the states when I shop.

Doesn't mean the reduction in purchasing power isn't real.

We're all getting screwed and taking it like we enjoy it.

I'm afraid it's'gonna take blood to reform this shitshow the FED and their congress critters have spun on the sheeple.

El Vaquero's picture

I bet that most people don't look at unit price. 

Elliott Eldrich's picture

"I swear to God they are going to sell a "bakers dozen" of 10 eggs instead of 12 for the same price 'ere long."

A "bakers dozen" is 13. A "banker's dozen" is 10. Just FYI...

ebworthen's picture

Right, understand, they'll whore the terminology to make a buck.

That is the new normal, like ZIRP being for "prosperity" and to "help the economy".  Fucking wankers, I hope they hang or lose their heads, God willing.