Annual Inflation Hits 4%

Tyler Durden's picture

There is the CPI... and then there is the MIT's billion price project which, as the name implies, tracks the prices of a billion products in real time. And according to the latter, annual inflation has hit a multi year high of about 4%. Perhaps someone can advise the talented Mr Evans that the 3% inflation he would so love to achieve... has in fact been eclipsed. At least, according to the real world. So take 4% inflation, add $2.5 trillion in "much more" easing, and what you get is only an economic Ph.D.'s guess. Alas, we are unqualified to have an opinion on the matter.

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Spitzer's picture

Nixon imposed price controls at 4% inflation.

Interest rates would have to be 7% just to be 3% ahead

TruthInSunshine's picture

People are stirring.

Ben Bernanke Confronted by WeAreChange - YouTube


Luke Rudkowski finally is able to get in the face of the master behind all this economy tyranny Ben Bernanke. The short exchange proves how elites are scared to answer their ties to the treason bilderberg group. If you never heard of the bilderberg group please do your own homework and research and not just take our word for it.

cynicalskeptic's picture

'stirring?!'......they're STARVING elsewhere in the world

here  they're debating between watching  'Dancing With The Stars' and the new '2 1/2 Men with Ashton what's his name' next Monday

TruthInSunshine's picture

I realize that.

This was more of a response to someone in another thread who said that The Bernank was inaccessible.

macholatte's picture

What's encouraging is that the author of that piece is apparently under 25, maybe a college kid, and he's not just bitching about not getting free tuition anymore.

A.W.E.S.O.M.-O 4000's picture

Ha! Tyler doesn't have a PhD.


I've got three of 'em! Check it out:

See in the pink's picture

I see it still stands for "Piled higher & Deeper" :p

Vampyroteuthis infernalis's picture

Yes, Ph D, I have one. It means poor horny and desperate.

PaperBugsBurn's picture

look at Rockefuker confronted this year in Chile


the guy goes wild... tells Rockefuker he shoudl kill him right there


i? amazed that pos goes around without a dozen bodyguards and arrives at a civilian airport...  WTF el cheapo

Confused's picture

While I agree, its strange that he travels the way he does, I'm sure 99.99% of the population has no idea who he is (or what he looks like). 


When they hear his name, they just think of Jay-Z and his record label. 

Cursive's picture


The cost of money should be much higher, instead we get ZIRP until 2013.  There will be blood in the grocery aisles.

Spitzer's picture

That's right.

This is really a sad situation. The only positive is that after the bloodshed, Keynes will be put to rest for ever.

Taku's picture

I don't see it beneath The Bernak & Group to oh, drop 50% of what most people buy from the CPI, and then, voila! Inflation falls, Bernank-style.

A.W.E.S.O.M.-O 4000's picture

Dude, Soylent Green is still a steal at $2 New United States Dollars a kilo.


Remember. Tuesday is Soylent Green day. 

See in the pink's picture

You realize we're already halfway there? (and this is only what we know about...)

samseau's picture

Keep dreaming, pal.  Keynes will outlive America.

A.W.E.S.O.M.-O 4000's picture

I love how Keynes has become an extension of Democrat which has become an extension of Socialism which has become an extension of Everyhting Evil In The World.


Get out of the false Left / Right paradigm.


40 years of unabashed free market "Fresh Water" capitalism under Democratic / Republican administrations destroyed the US economy and got us into this mess with no commentary what so ever.


And now 3 years of "Keynes," which ain't even Keynes, (how giving $4 trillion to the Wall Street banks that caused this crisis is "Keynsian" I'll never understand) has the blogosphere all up in a hissy?

Inspector Bird's picture

This is soooo correct.

Keynes would NEVER agree to the way his views have been bastardized.  In fact, if he were to be in the US today, he'd point out it's impossible to run a deficit that "pays for itself" as a "pump primer" simply because the debt load would undermine the effects of any stimulus.


The idea that socialists are Keynesian, or anything like that, is absurd.  Even proponents of the Austria School, such as myself, recognize that Keynes wasn't "wrong" in the sense that what he suggested wouldn't work - its effects are muted, at best - but that he was wrong because he opened the door to abuse by an elite class of individuals who lacked the training to know how to manage the system in any meaningful way, and that it would lead to the abuses we've seen.

krispkritter's picture

"Cleanup on aisle 6...and 7...and 9...and 13...."

boiltherich's picture

And don't mouth off to the meat cutters either or it will be you they are selling at $5.60 a pound.  Hamburger up 60% so far this year and going higher. 

Of course we have to pay it, we can't just starve.  But every dime of increase in food and fuel and utilities and rents is just that much less to spend in the rest of the economy, and since we are in a stagflation recession now I am betting there will be depression by year end.  QExyz and then some but every day costs go up wile the rich get richer and the poor get fucked. 

I am SOOoooo glad I got my Irish passport back in 2002.  A nice neutral island nation with an agricultural economy will come in very hand here soon. 

dolly madison's picture

Yeah, while I've been stocking up on goats, chickens rabbits and seeds, I've thought that it does not have to come to complete hyperinflation for this stuff to come in handy. 

blunderdog's picture

A more vegetarian diet among more Americans would help most folks' health, so there'll be an upside when the Medicare system falls apart.

See in the pink's picture

That's only true if they can avoid filling their bellies with grains and starches (diabetes, anyone??) and get plenty of raw, living phytonutrients, preferably the Southern-grown variety that doesn't cause hair loss and won't give their thyroids mutant superpowers! ;)

Big Ben's picture

Real short term interest rates are negative, in fact more negative than at any time in the 70s. That is just asking for trouble.

Version 7's picture


This means real inflation is going around 12%. Adjust that 7% interest rate to 15%.

tarsubil's picture

What they need to do is break it down by consumables you need like food, transportation, and fuel and things you don't need like plasmas, iPads, and Margaritavilles. This is still biased by deflation due to technological progress with crap we don't need.

Silver Dreamer's picture

Exactly, I'm sure stupid shit like iPads are one of the billion prices they track.  The MIT data is just as much of a lie as the government's CPI.

Ignatius J Reilly's picture

I appologize for highjacking the thread.  I have limited time today to research.


Does anyone know if housing prices are in the billion?  'Cause that makes a big difference if it is.



boiltherich's picture

There was a good description of the BPP when they first introduced it here at ZH.  From the MIT webpage:

The Billion Prices Project is an academic initiative that uses prices collected from hundreds of online retailers around the world on a daily basis to conduct economic research.

Our research uses high-frequency item-level data to study pricing topics in Macroeconomics. These are some of the questions we are currently working on:

  • Pricing Behavior: What drives price stickiness around the world? How much can be explained by current inflation, and inflation histories? How much by competition and industries’ structure? Are prices synchronized?
  • Daily Inflation and Asset Prices: We construct daily inflation indexes across countries and sectors and study their ability to match official statistics. We also study the links between daily inflation, asset prices, and inflation expectations.
  • Pass-Through: How much do prices adjust internally when the exchange rate, or the international price of commodities change?
  • Green Markups: What premium is paid in stores for “green” or “organic” products? Since we have data from multinational retailers, we can compute premium differences -for exactly the same items- in different places.

So, real estate is not in the mix, but I still doubt it is much of a reflection of actual consumer prices in the USA, though it does have applications for a lot of good research.  Since food, rents, utilities, and fuel are a large part of our inelastic budgets, and they are not sold by online retailers for the most part (or at all) these would appear not be getting measured at all. 

For what it is worth here is the link: and when you go to the page you will see near the bottom that there is another link to PriceStats which is a private for profit propriatary data collector of inflation/price data. 

If you want to know what inflation is doing just stay aware of the prices you pay for the things you buy.  Because you are not going to get truth from government, and anecdotes we post about prices might be interesting and fun but not particularly relevent to you.  I prefer to think of it all as a sort of personal index, income in verses prices I must pay = standard of living.  Since I am on a fixed income the income side is pretty easy, it has not changed since BushCo was in office.  The outgo part according to the CPI-W is about 2% less than it was in 2008, but since that measurement dictated my last raise I find in my real world I have lost about 30% of my standard of living.  I have only been able to keep going and stay out of bankruptcy court by ditching my mortgage in favor of cheaper rent.  But that will not last either, rent will go up by a good 15% at least when my lease is up next April. 

William Wallace's picture

No QE3.  They can't let inflation get away from them.  If they had to really jack up interest rates to stop inflation, it would lead to total scroomage.

Global Hunter's picture

Scroomage?  Is that a scottish word?  No worries I get the jist, and I will go out on a limb and say we'll get to witness this scroomage first hand in the near future.

TapperIsTicked's picture

Scroomage v: [Fr] sound the blade makes just prior to its abrupt stop.

Spitzer's picture

Inflation got away a long time ago.

rocker's picture

Anybody who believes inflation is just 4% watches too much TV. And as a act of kindness,

Needs to pay the difference over 4% on my electric bill, my perscriptions, my land taxes, my food bill and the beef.

It's the beef I got a beef with. Meats have doubled. I don't what others eat, but hamburgers and hotdogs never work for me.

cynicalskeptic's picture

Used to live on 99 cent packages of hot dogs in college.  Now they're overe $4.  A pound of bacon is over $7.   Saw a rib roast at $52 the other day.... gagged. WTF?  

Heating oil was under $1 when we bought 17 years back.  Now?  Can't imagine the price this winter......

My house is still worth 3 times what I paid (IF I could sell it) but the taxes have gone up OVER 3 times.....  taxes are forever.  Even when you own a house you can lose it.  Local property taxes here are more than my refied fixed 5%  15 year mortgage payment.

dolly madison's picture

Yeah they doubled my property taxes this year.  Such a bitch.  One of the great things about where I lived had been the fairly low property taxes since the property doesn't cost much here.  It is a real struggle for us to pay it too.  It's made us feel much poorer.

I'm sure the renters voted it in, not understanding most landlords will just pass it on to them.

The food prices are a real issue for us too.

We are pretty much on a fixed income.  We have an RV park, but I have not raised rates yet on the people because I have a devotion to low prices, but I will not be able to keep it up forever probably with the way things are going.  So many of our expenses are up.

Henry Chinaski's picture

It's enough to make you a libertarian.

Conchy Joe's picture

In our area 30-35% of our population is on welfare, living in subsidized housing or receives some other type of taxpayer funded assistance. Add in the college students and professors and you have closer to 50% of the population that will always vote for any type of property tax increase to fund whatever the need for the day here is.

My appraised (taxable) property value is back to almost what it is actually worth but the percentage I pay has increased every year.

boiltherich's picture

William:  That boat sailed where have you been?  Just because they do not report inflation does not mean it is not out there. 

spankfish's picture

Screw inflation... full steam ahead.  Oh, I forgot to say bitchez.

total nonsense's picture

I think you better speak with Roubini, he knows better. He agree's with bernanke, there is no inflation and Gold is not money, so stop with the nonsense, he is right,because he said so

Sudden Debt's picture

If Gold isn't money, it's a commodity and INFLATION on the commodity Gold IS 28% THIS YEAR!


TruthInSunshine's picture



QE3 is DOA, bitchez. Fade Goldman. They're fading their own (free) advice and prognostications. 

QE3 is dead. Political suicide for the 'non-political' Federal Reserve. Fukushima glow-in-the-dark hot potato...


  • Fed Divisions Led to a Compromise on Interest Rates
New York Times By Published: August 30, 2011


Staff members slightly raised their forecasts for inflation for the rest of this year, indicating that the central bank might be especially unlikely to engage in another round of major asset purchases. These purchases generally raise prices, and the Fed has previously engaged in such quantitative easing in part because policy makers worried that prices might otherwise start falling.

Mactheknife's picture

Even if they do something, of the options that the FOMC has left, none of them will be beneficial to the S&P in the manner that QE2 was.  Apparently, Mr. Market hasn't thought through these options as none of them will involve Brian doing his weekly POMO ES buys.

barliman's picture


I have to agree there is growing political risk. MIT's increase through the end of August would be 4% for the past 12 months but the public's feel for that same period would probably be higher.

Since that same public needs a calculator to do addition & subtraction, a simple extrapolation for the YTD trend (with no QE3 for July & August) suggests an overall relative number for the year of 6%

BUT ... add QE3 in for the final quarter ... I am going to do some fuzzy math in my head ... overall 9% for the MIT BPP for year end 12/31/11 and gold will have hit the $ 2,500/troy oz price point in December.

At which point, at least one major Democrat will announce their candidacy (cough: Hillary) for the Demcratic nomination (sotto voce: Clinton) and the odds go to 5-4 on Mr. Bernanke announcing his resignation for "health reasons".


boiltherich's picture

I do not need a calculator to know that my electric utilities have gone up 21% in two years in spite of the fact that the Bonneville Power Authority has such a surplus that they have had to shut down hundreds of windmills in the Columbia Gorge. 

I need no abacus to figure out that cable has gone from $119 to 140 for a neat 17.6%.

Bread has gone up 50%, beer up 25%, produce, more than double for most of it in a year.  Avocadoes alone from 50 cents to $1.89, well over 300%.  Gasoline, started to go back down from the May/June peak but is now rising again, up 12 cents this week to $3.79, but of course I have to use premium which never went below $4. 

Inflation scares the public even worse than unemployment does I think, because unemployment makes life hard for 10% of the people but inflation gets us all.  And I am pretty shocked that you hear almost no bitching about it, this round of economic nightmares seems to be getting met with such apathy that our congresswhores think they are getting away with it. 

dolly madison's picture

Yes, when will we see anything but apathy here?