Fed Officials Frantically Play Dumb to the Coming Inflationary Storm

Phoenix Capital Research's picture

The Fed is baffled as to why inflation remains so low.

It’s a clever move, given that the reason inflation is believed to be “low” is because the Fed has been purposefully understating inflation for years.

Perhaps the biggest fraud ever committed in financial history concerns the understating of inflation in the Unites States post-1971. 

By the Fed’s own admission, the US Dollar has lost some 84% of its purchasing power since 1971, and yet the Fed has routinely claimed that inflation has been “subdued” or “under control” throughout that time period (with the brief exception of the inflationary spikes of the ‘70s).

With this level of currency depreciation, incomes would have to rise exponentially to compensate for Americans’ higher cost of living. They haven’t. As a result of this, Americans have increasingly relied on two parents working instead of one, while supplementing their incomes with credit cards and other debt instruments.

The below chart is possibly the single best argument against any claim by the Fed or others than the official inflation numbers are accurate. If income growth was indeed greater than the rise in inflation post-1971 as the below chart suggests, most families would currently have only one parent working and STILL be saving money. Instead, today the norm is for both parents to work and the average US household to be sitting on over $137,000 in debt.

Put simply, the official inflation numbers are garbage.

The Fed purposely wants it this way because understating inflation allows the Fed to

1)   Overstate GDP growth

And…

2)   Paper over the fact that incomes have been on the decline relative to cost of living since the early ‘70s.

So don’t let the Fed fool you with its “gosh, where is the inflation?!? We don’t understand!” act. The Fed KNOWS inflation is rising rapidly. Heck, the $USD has already dropped 10% in the last 12 months that’s DESPITE the Fed hiking rates THREE TIMES.

Put simply, BIG INFLATION is the THE BIG MONEY trend today. And smart investors will use it to generate literal fortunes.

We just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We are making just 100 copies available to the public.

To pick up yours, swing by:

https://www.phoenixcapitalmarketing.com/inflationstorm.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

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Collectivism Killz's picture

Never get in the way of your enemy when they are making mistakes........

VWAndy's picture

 Its a crackhead thing.

silverer's picture

Here's your real inflation numbers:

www.chapwoodindex.org

Herdee's picture

The federal government is monetizing the debt at the same time as their spending is out of control and people are not spending. The economy is in the shitter but don't believe me though, if inflation was a problem you wouldn't have Velocity of M2 Money Stock at record lows. They need to print on a new massive scale to get out of it, it is their only choice except to allow all the bad debt to wash out. They'll take the easy way so hang on while markets hit new highs and the real printing just gets started. Just gets started because $30 trillion of debt will seem very small soon. Believe me, they need to emarass Japan on a grand scale or the war machine is fucked.

https://fred.stlouisfed.org/series/M2V

 

 

backwaterdogs's picture

it occurred to me that i bought a beretta 92fs in 1992 for about $530....I can buty them all day long for the same price.  ammo, on the hand....i still have  box of high 9mm with a 9.95 price tag still on it...that same high-end load now is well over double.

Conax's picture

Right you are, BWD. I think ammo prices went nuts when the gov told how they were buying a billion rounds of this and two billion rounds of that.. Then there was a real or perceived or deliberate shortage of all the popular stuff like .22 LR and 5.56. Bronco 'bama and the hatred of him caused a lot of shooters to stock up heavily, too.

Even after supplies came back, even after the panic faded, the prices never came back down.  Also, the US no longer has a lead smelting facility on its soil. That ain't cool.  I'm stunned that .44 mag is going for a buck apiece. There are deals on the 9mm, I've seen it for $10 but not the fancy defense bullets. Just the plain hardball.

AgAuSkeptic's picture

They also continue to play dumb to huge price hikes in medication. Here's a uselss cancer medication (ranked 20/28) but price ~13K per month, https://www.rxrankings.com/datatable/default/chart/zzzJHH#

tecno242's picture

By every imaginable piece of logic and even in the charts (shown) you would think there would be massive inflation.  Yet, I look around in the real world and where is it?  Gas/Oil is very low.  I still remember 4.25$ a gallong gas in 2006.  My grocery bill has increased, but not by a lot over the last 5-7 years.  Price of a soda in the vending machine in my office has been 1.50$ for at least 5 years.  

Only places I see obvious inflation is rent/housing... and somewhat in new car prices.  

That said.. it looked that way in Weinmar Germany too and inflation suddenly kicked in and went pshyco in the span of 1 year, so who knows.

sparksmass's picture

Check out the prices of tuition, textbooks, fees, healthcare, insurance of all types, recreation and leisure, taxes, services, food other than low quality junk food, repairs, transportation, etc, as well as shrinkflation, lower quality, less durability

Ajax-1's picture

It's easy to cherry pick. Yes, gas is lower. However, have you seen the price of new cars? If you have gone to the grocery store lately you will see that the price of beef, produce etc has sky-rocketed. In an effort to disguise this, have you noticed that many food manufacturers are reducing the size of their packages? Forget about the official government bullshit numbers from the Bureau of Lying Statistics (BLS) etc. Go to "Shadowstats" for the unvarnished truth.

rex-lacrymarum's picture

First of all, it is not the Fed that is calculating US inflation statistics, it is the BLS (Bureau of Labor Statistics); GDP is estimated by the BEA (Bureau of Economic Analysis).  Secondly, apart from the statistical tricks (hedonic indexing, geometric weighting, etc.) used to make inflation look as low as possible, it is actually not possible to "calculate" price inflation.

First of all, while money does have purchasing power and that purchasing power certainly changes over time - particularly under a fiat money system in which the money supply is incessantly expanded - the mythical "general level of prices" doesn't exist.  

Just think about it: what does it mean to add up a bag of potatoes, two movie tickets, 1/20000 of a car, 1/2 of a haircut, etc. and then make an "average" out of that? It is a logical fallacy from the outset - adding up fractions of heterogeneous goods is a mindboggingly absurd exercise. 

But the biggest problem is the act of "measurement" as such. Not only does the composition of goods the average household spends money on change constantly (e.g. before 1982, there was no price of a PC, because there was no PC), but what the relevant basket of goods looks like is different from household to household. This makes the composition and weightings in the basket a highly subjective exercise. Rent or mortgage payments may represent 40% of the expenses of people with a low income, food another 30% -  while for a rich person, they are not even a footnote. 

But wait -  it gets worse. Both the output of goods produced in the ecomomy is changing constantly - it is in fact growing most of the time, as long as the economy is progressing - but so does the supply of money in the fiat money system. Not only does the supply of both goods and money change all the time, but so does the demand for them.  Given that both the goods side and the money side of the calculation are not "fixed", it is in fact a logical impossibility to "measure" anything, since there exists no yardstick with which to effect such a measurement.

You can measure the length of something with a meter stick, since the meter stick will always be of the same length (we can safely exclude relativistic effects as long as none of the objects concerned are moving close to light speed). But you cannot measure a "general level of prices" of goods with a continually changing supply and demand with a monetary unit that is likewise subject to a continually changing supply and demand - this is akin to measuring length with a meter stick the actual length of which is incessantly fluctuating. It simply makes no freaking sense, the number you calculate will always be complete nonsense. 

But we do of course know that the purchasing power of the scrip issued by the State constantly declines - so how can we ascertain how bad the Fed's debasement of money actually is? Simple: stay away from the State's statistics minions, definitely don't ask any economists or econometricians. Just go out there and ask the next housewife you come across in a supermarket. She knows. 

Ajax-1's picture

I find it absurd that Fed policy creates inflation and they call it "growth" as if to suggest the standard of living for all is improving. Real economic growth is created by efficiencies and economies of scale, not money printing.

CRM114's picture

..and real productivity is thru the floor

Easyp's picture

How much borrowed money drives US GDP?  There was an article here not long ago pointing out that once GDP has borrowed money stripped out we are in a depression.

The news is certainly depressing!

Ned Zeppelin's picture

Inflation is great, if you are a debtor. Repaying borrowed dollars with devalued dollars.

Ajax-1's picture

I agree with the basic premise of your argument. However, debtors are also consumers. Assuming the debtor has a job, is his or her wages/income keeping pace with the increased cost of goods and services? If not, the debtor is no better off than the one loaning the money. During the Great Depression, my grandfather worked in a coal mine. The mine owner would often pay it's emplyees with tokens that could be redeemed for merchandise in the company store at tremendously inflated prices. The Fed has essentially created the same scenario on a much bigger scale. Unfortunately, 99% of us are still slaves to the system.

JibjeResearch's picture

You both are correct.  Which correct answer is the best with positive outcome for the person depends on the ratio of the debt vs the income for spending.

If you can spend on the inflation and still have enough money for investment... and if the investing money outweighs the debt/inflation, then the person is better off because the debt decreases when the investment is used to pay off the debt....

The balance of debt and spending/investment is the key to get ahead in high and/or low economic time.

A thinking person is always better than a non-thinker....

Easyp's picture

Until the Chinese figure that out and sell your paper?

Silver Savior's picture

My silver and gold is looking quite shiny. The hue gives off a very comforting feeling. The dividends from owning physical precious metals are everywhere. 

Stack more and more fiat currency that keeps losing purchasing power? No thanks. On a long enough timeline I am right!

ali-ali-al-qomfri's picture

Play dumb with play dough.

grasha87's picture

I have begun reviewing books on Austrian Economics and there are many more to come. Here is my latest book review:

 

https://www.youtube.com/watch?v=cmIvPa02Oxg

Ajax-1's picture

I think you would also enjoy reading "The Road to Serfdom"by F.A. Hayek and "The Creature from Jekyll Island" by Edward Griffin.

MGA_1's picture

Ah... Phoenix... surely this is a sign that inflation is not a problem.  Still waiting for Phoenix to go long the market....

Anon2017's picture

For hundreds of thousands of Seniors on Medicare, Part B will be going up in price by about 30% in 2018 because of changes to premium surcharges that go into effect next year. And if you have a decent size IRA expect another big jump in your premiums in the year after you report your first Required Minimum Distribution. The surcharge brackets have not been adjusted for inflation since they went into effect in 2007(?) and starting in 2018 more seniors will be pushed into a higher cost category.  

Silver Savior's picture

They should keep all wealth out of the system and let the goobermint pick up every cost for healthcare. 

JamesBond's picture

The Carter Years

Double digit inflation, interest rates, and unemployment. If you lived through that then you might survive what’s coming....

jb

Dwain Dibley's picture

I lived through it, barely noticed it.  What's coming is going to be far, far worse than that.

Just imagine 97% of what people believe to be the "money supply" !POOF!ing out of existence.

That is how bad it could get.

Maestro Maestro's picture

There cannot be either deflation nor inflation in the ABSENCE of money, for both deflation and inflation are MONETARY events.

Dollars, euros, yens, yuans, shekels, rials, or roubles are not money.

Present-day US dollars are a CRIME according to Article 1, Section 10 of the Constitution of the United States of America. The country that issues the reserve currency of the world! How can we take anyone seriously, including idiots known as the Chinese and the Russians, when this the case?

Euros, yens, yuans, shekels, rials, or roubles are only accessoires to the aforementioned crime, as they are only different names for the same shit: the unlawful Federal Reserve Notes [which they are not either as they don't promise to redeem ANYTHING] also known as dollars.

Ajax-1's picture

Bingo +100. Fiat is currency and not to be confused with money. Real money is scarce, portable and has intrinsic value that can withstand the test of time.

Maestro Maestro's picture

Yes indeed. Gold and silver are money. I prefer silver. And platinum is my favorite investment.

JibjeResearch's picture

I disagree with you guys.  Money is a vague term.  If you exclude currency from money, then all form of exchange is not money.  

And what is left is value and people's desire for shit.  What do you call this desire/want/value?  And how do you intend to get it?  Barter? Shell? Ledger? Coin? Commondity? Paper? Crypto?

Or... "I'll pay you anything you want tomorrow?" lolz 

 

grasha87's picture

I have begun reviewing books on Austrian Economics and there are many more to come. Here is my latest book review:

 

https://www.youtube.com/watch?v=cmIvPa02Oxg

flea's picture

John Allison (former Chairman BB&T) has been in the mix since the beginning of Cabinet selections:

'If he had a “magic wand,” Allison said he would get rid of the Fed, but he knows that’s not likely in his lifetime. “It’s just too powerful of an organization,” he said.'

But, maybe Warsh is the man:

'Former Federal Reserve Governor Kevin Warsh “would do a really good job” as Federal Reserve chairman but that also depends on the political environment, according to former BB&T Corp. CEO John Allison.

Allison, who has also been considered by the Trump administration as a potential contender for the top Fed position, told Bloomberg Television Wednesday that he personally doesn’t want the job but he wouldn’t rule out a nomination to the Fed board.

"No, I really wouldn’t in all honesty," Allison said when asked about the chairmanship. “I really would like to get rid of the Fed. I’ve been very vocal about that. I think their job is impossible.”'

“We all know that price fixing doesn’t work,” said Allison, who also once headed the free-market focused Cato Institute in Washington. “What does the Fed try to do? They try to fix the price of the world’s reserve currency, which is the most complicated price that can possibly be. So you almost always know that they’re doing it wrong."

Allison said he would “not necessarily" rule out an appointment to the Fed board. "It would depend on the whole circumstances and whether you could believe you could impact policy.”

Warsh served as Fed governor from 2006 until 2011 and is now a fellow at the Hoover Institution.'

Bloomberg.

JailBanksters's picture

They're NOT playing

Conax's picture

A can of stew went from $2.49 to $2.99 in six months. A pound of the cheapest ass bacon (probably the remains of chinese political prisoners anyway) went from $3.49 to $4.99 in a year.  Haircut that was $14 is now $18.

Inflation is roaring, but it hasn't gone hyper yet. The well-off ignore inflation, as long as they don't need a rucksack full of paper to buy chewing gum.  Poor people are well aware that they are being boiled slowly and things are getting worse by the week.

The banks would never admit it else they would have to raise the rates. Doing so would help the frugal, the savers, those that reject the heavy debt way of life. They hate those people.

11b40's picture

Just last night, the wife & I were commenting on or dinner bill at Outback Steakhouse.  We have been eating there for many years, and generally get the a similar meal to this one, but what not long ago was about $30 was over $42, plus tip.

2 appetizers, 2 side salads, 1 premium Margarita & 1 glass of mediocre wine - so almost $50 with the tip.  We are seniors, and don't eat much in one sitting.  I guess if we had a steak each and 2 drinks, it would be closer to $100......in a mid-priced chain restaurant.  Inflation is ripping.

HRH Feant2's picture

Which is the reason I cook at home. Getting ready to make fresh pesto for dinner tonight. It only has five ingredients. I don't like raw garlic so I add a step and blanche the garlic first.

Gatto's picture

The real issue is that inflation has a LAG of 5 to 12 YEARS after the money is printed!  Example, the overspending in the late 60's in Vietnam caused massive inflation in the early 80's, and when they begin the realize that the massive spending from 2007 to just recently is beginning to cause massive inflation, it will be too late to do anything about it!  There will already be inflation in the pipeline that can't be slowed!   It is coming!

All Risk No Reward's picture

Hi Gatto, I hope the name is in reference to one John Taylor Gatto (Youtube him) - a true American hero.

Almost everyone is confused about the nature of money.

The private cabal of people who control the money promote this ignorance by financing main stream ignorance, as well as various "controlled opposition" false narrative about money.

The reality is actually pretty simple, but it relies on reality, NOT false narratives.

Foundational Points:

1. The sovereign in a society controls the money in a society. There is no reason why a sovereign would ever allow anyone else to control the money (and if they did, they instantaneously lose their sovereignty).

2. Following from #1, Western governments are NOT sovereign. Neither are their peoples. A small coderie of people who privately control the money system ARE THE SOVEREIGNS.

If you think Nancy Pelose, Obama, Ryan, et al. actually controlled government then you've been punked by a Money Power psy-op engineered to deceive you.

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”
~Napoleon Bonaparte

I can't say it any better. Whatever his tyrannical faults, Napolean wasn't a dummy, he just ran up against a group that controlled more money than he did.

I repeat, Money Power Monopolists are the REAL DECISION MAKERS. They control government. They control the military. They control the major press. They control every major corporation through leverage. They control the intelligence agencies. They control the major mobs. They control the major drug running (and their mega-bank fronts always get caught and protected... Opium Wars 2.0). They control terrorist funding in order to overthrow governments outside their monetary purview to put them under their monetary purview (Afghanistan, Iraq, Libya, Ukraine; even Vietnam, Japan, and Germany). War's main purpose is to extend the Money Power Monopolists power over more nations. It is what simply EXISTS. No, they won't tell you, you neo-helot. You are supposed to be a schmuck that can't connect dots right in front of you.

So, if you hold trillions in monetary wealth and trillions in debt paper, and the debt-money paupers are up to the top of the "One World Trade Center" in inextinguishable debt, would you hyperinflate to bail out the monetary system illiterate masses at your own expense?

No, you wouldn't.

And neither will they. We are schmucks compared to the people who literally run the vast majority of the planet like some kind of monetary "Oz" hiding behind the "money curtain."

Now, I'm not saying a hyperinflation won't eventually come. What I'm saying is that it will be orchestrated WHEN IT BENEFITS THE SITH LORDS WHO RUN THE MONEY SYSTEM.

So, what is their incentive when they hold trillions in monetary assets and trillions in debt-paper?

A debt-money depression. They will crash the economy, wipe out the debtors (meaning transfer the material wealth of the masses to their corporate fronts), and effectively rule the world.

Once the planet has been busted (they are long hard assets and light on money and debt-paper), THEN, AND ONLY THEN, DO THE SITH LORDS RUNNING THE MONETARY SYSTEM HAVE AN INCENTIVE TO HYPERINFLATE (balance their books, call it even). They could use this hyperinflation to create a new crooked money system to financially and economically rip faces of the monetarily illiterate ordinary people.

That's it. It isn't rocket science. Nobody will be able to counter this argument with a rational argument. At least they haven't in 10 years - and I've been looking.

All they can do is viscerally down-vote under the delusion that their feelings define reality.

"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."
~Lord Acton

"Power corrupts. Absolute power corrupts absolutely."
~Lord Acton

"Let the American people go into their debt-funding schemes and banking systems, and from that hour their boasted independence will be a mere phantom."
~William Pitt, (referring to the inauguration of the first National Bank in the United States under Alexander Hamilton).

How To Be a Crook
https://www.youtube.com/watch?v=2oHbwdNcHbc

Poverty - Debt Is Not a Choice
https://www.youtube.com/watch?v=t7BTTB4tiEU

Renaissance 2.0 The Rise of [Debt-Money Monopolist] Financial Empire
https://www.youtube.com/watch?v=96c2wXcNA7A

Debunking Money
https://www.youtube.com/watch?v=5iBSBVew-3Y

Krugman (and each MIT economist professor - THEY KNOW AND THEY OCCULT!) is a Goebbelsian propagandist as he covers the crimes of wolves with his fake sheep suit and lisp.

Krugman to Lietaer: "Never touch the money system!"
https://www.youtube.com/watch?v=Q6nL9elK0EY

Dwain Dibley's picture

Most of your assertions, and linked videos, are factless, hyperbolic, bullshit.

JibjeResearch's picture

It's true that you know reality, it does you no good if you can't make the public understand your wisdom.  This is the reason why America will fall....  It's a shame...

grasha87's picture

I have begun reviewing books on Austrian Economics and there are many more to come. Here is my latest book review:

 

https://www.youtube.com/watch?v=cmIvPa02Oxg

All Risk No Reward's picture

Weimar, Argentina... I know, but do you know?

Do you know those were DEFLATIONS from the standpoint of the Sith Lords operating the money system OUTSIDE of those nations?

Banksters bought up German and Argentinian assets FOR PENNIES ON THE DOLLAR, BECAUSE THAT'S HOW THEY ROLL.

AND BUYING UP YOUR COMMUNITY FOR PENNIES ON THE DOLLAR WILL BE HOW THEY ROLL OVER YOUR COMMUNITY, TOO.

JUST LIKE THEY DID DURING THE GREAT DEPRESSION FOLLOWING THEIR DEBT-MONEY BUBBLE BLOWING DURING THE "ROARING 20'S"

Oh, that's not part of the programming.

You aren't dealing with "cowboy" nation states here, you are dealing with the...

Supranational Debt-Money Monopolist Mega-Corporate Fascist Global Empire...

bitchezzzzzzzz

Parroting decontextualized narratives isn't going to work here.

All Risk No Reward's picture

BTW, the key controlling inflation is to concentrate the debt-money wealth in the hands of a few so they can keep the money sidelined.

Since outstanding debts require their debt-money to pay down, they can't pay it down and will go bust. The Banksters then use government as their police force to asset strip ordinary citizens.

They are doing it now in Greece. They will do it in your community, too.

It is the absolute height of gullibility and ignorance to believe that those who fraudulently enslaved society to inextinguishable debt will now bail society out of said fraudulent inextinguishable debt.

“We live surrounded by a systematic appeal to a dream world which all mature, scientific reality would reject. We, quite literally, advertise our commitment to immaturity, mendacity and profound gullibility. It is as the hallmark of the culture. And it is justified as being economically indispensable.”
~John Kenneth Galbraith

“In our time, the curse is monetary illiteracy, just as inability to read plain print was the curse of earlier centuries.”
~Ezra Pound

Dwain Dibley's picture

“In our time, the curse is monetary illiteracy, just as inability to read plain print was the curse of earlier centuries.”
~Ezra Pound

Great quote.  Too bad you remain monetarily illiterate.

The U.S.G. owns the U.S. legal tender FRN and people (deposit account holders) control its issue.

MONEY

 

.

JibjeResearch's picture

Fool..., the US Gov (Ex Branch) is a contractor to do things for the American people.... the US Gov has no obligation to serves the American people.  It only serve American people when Congress gives them money...

Dwain Dibley's picture

OK head up ass,

Please explain how what you are incoherently ranting about is even remotely relevant to what I stated.

Gatto's picture

Interesting conjecture, but they are doing that now, and did it in 2008.  Insiders are off loading stocks now in order to scoop them back up at a deep discount in a couple of years, drive the prices sky high until the retail invester feels comfortable and buys back in and then rinse, and repeat!   ( So am I, and you should be too!)

illuminatus's picture

Thank you so much All Risk!! I wish I could give you more upvotes. I wish more people would get this. It seems simple enough, yet I can't even get my own children to believe me. It's as if people are under a spell. What is going on is too incredible I suppose and most minds just won't believe the audacity of what is being perpetrated. The old saying " No one so blind as he who just won't see" applies. It grieves me to know and see how powerless we really are to stop this grand crime and tragedy.