The Schrodinger Inflation: Ignore All Time High March Gas Prices, BLS Tells You Inflation Is Lower Than Expected

Tyler Durden's picture

Just spent a record high amount at the gas pump for this time of year? The BLS says you didn't, and after all when it comes to reality, the BLS has a right of first refusal. The just printed headline CPI came at 0.4%, just in line with expectations of 0.4%, while core CPI of 0.2%, missed expectations of 0.3%. That's right: not only is inflation meaningless, it is less than expected, leading to surge higher in stocks, bonds and the EURUSD. As for those items which are once again soaring in prices such as food and gas? Luckily, those can be hedonically adjusted by everyone to virtually zero. (wait? You still pay your mortgage or rent? Sucker!) Remember: the iPad is deflationary.

From the report:

The gasoline index rose sharply in February, accounting for over 80 percent of the change in the all items index. The gasoline increase led to a 3.2 percent rise in the energy index despite a decline in the index for natural gas. The food index was unchanged in February, with the food at home index unchanged for the second month in a row as major grocery store food indexes were mixed.


The index for all items less food and energy rose 0.1 percent in February after increasing 0.2 percent in January. Indexes for shelter, new vehicles, medical care, and household furnishings and operations all advanced, while indexes for apparel, recreation, used cars and trucks, and tobacco all declined.


The all items index has risen 2.9 percent over the last 12 months, the same figure as last month. The index for all items less food and energy was up 2.2 percent, a slight decline from last month’s 2.3 percent figure, while the 12-month change in the food index fell to 3.9 percent in February, its lowest level since last June. In contrast, the 12-month change in the energy index was 7.0 percent in February compared to 6.1 percent in January.

So much for myth. As for reality, here is the Schrodinger Inflation courtesy of the MIT Billion Price Project:

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GeneMarchbanks's picture

You can't eat food & gas...

Badabing's picture


Ron Paul asks big Ben “ have you gone shopping lately?”

Nuff said!

clones2's picture

Gas has never been higher this time of the year...  Consumer prices rose the most in 10 months...

And I see numerous articles by the MSM today stating that "inflation isn't a concern"...

Are you kidding me?  They point to inflation and highlight inflation.... then say it isn't occuring.

economics1996's picture

Jiffy 40 oz beanut butter, two pack was $7.68, now $10.49, 37% increase in price.

economics1996's picture

Showboat pork and beans 7 pound can was 2.98 now $3.78, 27% increase.

economics1996's picture

6000 watt generator was $659 now $868, 32% increase.

caconhma's picture

Dear Mr. President and members of the Congress,

You are all corrupt POS and pathological liars. Thank you for your bogus & fraudulent statistical data.

The case and point:

·         My medical insurance premium in 2012 is the same as in 2011 but all my deductibles went 50% up.

·         The meat I was buying went up 15-20% in the last 12 month

·         Labor rates at my car dealership service department went 15%

·         Shall I continue?


Carl Spackler's picture

In other words...

just listen to what we say and DO NOT watch the hand !

Stuck on Zero's picture

There's no inflation in net gasoline purchases because the newly unemployed don't need to drive to work anymore. 

czarangelus's picture

It's interesting that they have to do so. They have to include the skeptical argument in order to specifically deny it, which instead of raising awareness just appears to cause the sheeple to dismiss the next bit of skeptical evidence they hear out of hand.


In black magic, there are very specific rules that have to be followed or the spell won't work. You actually have to warn the victim, and explain to the victim what you're doing. You can couch it in any terms you want, including denial, but no injurious spell will function unless the victim is in on it.

tabasco71's picture

You can apparently eat ipad's though.

They just did this in the UK... tossers inserted the highest value, quickest obsolescing item imaginable into the 'basket of goods' that measures the inflation rate, so next year bread can cost £50 and it will still look like inflation is 'under control'. 

RollinsArline3's picture

my roomate's mom makes $83/hr on the computer. She has been fired from work for 9 months but last month her pay check was $18339 just working on the computer for a few hours. Read more on this web site .....

akak's picture

And MY roommate fucked your mother in the ass for $8 --- and said she wasn't worth it.

Read more on this web site:

fonzannoon's picture

Algo's just read headlines.

Jefferson's picture

This number makes QE3 less likely anytime soon.

adr's picture

No it makes it more likely. If inflation is "moderating" then more QE can be "handled" by the economy.

fonzannoon's picture

Bingo ADR. Oil is transitory (obviously) and everything else is tame. Proceed with WE whenever

Carl Spackler's picture

True, but... 

The bankers will want the QE, but the political problem for the Washington types currently in power (e.g., Barry Obama) is that more QE will also drive the price of petroleum higher (oh, what it is, what it was, what it shall be to hold and operate with the world's reserve currency) and put more upward pressure on gas pump prices... further intensifying such as a 2012 campaign issue, regardless of what Israel does to Iran.

Jefferson's picture

Only problem is that increasing gas prices means additional QE will lead to further overall deflation and a decline in overall economic "growth" and unemployment. Not really a good setup for electoral victory.

Better to crash the financial markets and blame it on the evil Wall Street bankers not to mention greedy hedge funds.




combatsnoopy's picture

Technically speaking, it wouldn't be "deflation", but rather a CORRECTION

The trouble with corrections is that they come at the end of a bubble which is literally a transfer of wealth between those who know and the gullible who don't want to admit they lost their shirts in the game. 

All Rise's picture

Crude is up close to 50% since last October. It takes somewhere between 3 and 6 months to bite. 

LawsofPhysics's picture

ZIRP is fucking QE!  That is unless of course you really don't think that there is a cost associated with creating capital and then adding no real value to the system.

trembo slice's picture

and how are interest rates kept near zero?  it isn't a fucking magic button.  to keep interest rates low, new liquidity (or loanable funds) must constantly be available.  Inflationism is a policy that requires more inflation to keep the charade going.  Until interest rates rise, we HAVE QE. 

SheepDog-One's picture

Sure ADR go ahead and unleash QE and give us $6 gas lets see how that works out. 

Mongo's picture

When is BPP going to update it's european data any time soon. It's been on "collecting data"-status forever.

Dermasolarapaterraphatrima's picture

Does the soaring Dow really refelct the "summer of recovery" ?


Sears to close 62 more stores


Sears Holdings (SHLD +2.13%) already said it would close as many as 120 Sears and Kmart stores this year in an effort to turn the business around. But that wasn't enough.

The struggling retailer said Thursday it will have to tighten its belt even more. Sears is now planning to close 43 Hometown stores, 10 Sears Hardware stores and all nine stores in the Great Indoors chain. Hometown stores are independently operated, and sell hardware in mostly rural areas.



the not so mighty maximiza's picture

They will still have to do QE just to buy US debt IMHO, gas will be 10 dollars not even considering Iran Syria war.

LongSoupLine's picture

Gas already $10/gal (EUR2 per liter) in France...

j0nx's picture

But, but I thought Sarkozy saved the French people? That's what he said anyway.

LongSoupLine's picture

Bama's Lead Shills...BLS

LawsofPhysics's picture

The divergence is spreading and it is more clear than ever that the banking sector owns the government and is using academic trolls to "re-educate" everyone when it comes to precisely what things like "ownerhip", "liberty", and "fair share" really mean.  The system of theft is no longer sustainable, especially considering over 100 years of contract law surrounding title ownership, and in order to stay in power and allow the fraud to continue the "laws" must be re-written and the people must be "re-educated".

Will this be a bridge too far for the banking class?  Judging by the recent behavior of the likes of JPM and Bank of America it would seem that it will be even less of a problem than is was back in the 80's.

Fucking pussies, all of us.

fonzannoon's picture

Very true LOP but even if the public sits back and ignores reality the system ends up breaking from it's own weight anyway. The question this is who was ready and who was not/

mendigo's picture

Bull trap being set.
Market is due for a run - maybe.
Pays to go with the herd at times.
Reality has little to do with it.
Place underware on head as protection from shit-rain and join forces with robo-tard. No?

j0nx's picture

And there, dear friend, lies the REAL problem: the reflection in the mirror. The people are only concerned with matters such as snooki's baby and whether they can marry their gay lover. I don't blame the banks or the politicians per se because they are just sociopaths doing what sociopaths do. I blame the people for allowing it to get this far. The sociopaths serve at OUR leisure but somehow the people never seem to grasp that fact.

BLOTTO's picture

The thing is - the illuminati controlled main stream media is pumping this out to the masses to follow - Snooki, Kardashians, Rihanna, all that useless/mindless shit... all for a reason.

To distract the masses off the real issues at hand.

However, you are right - we(people) let this happen too... this did not happen over night.

krispkritter's picture

I am what I eat, just sayin'...

Meanwhile, don't fret the lack of cash to buy trivial things like food! Obammy's re-election campaign now takes credit cards! Yes, you can help finance the career of a guy who's helped put you even deeper in the hole by....going even deeper into the hole!  Because if you're in a hole why stop digging or lie down? Keep digging!

Shizzmoney's picture


Makes me wonder, if the BLS/CPI number is saying to us that inflation hasn't affected as expected, wouldn't that mean a sharp progression to the mean in the future?

QE3 could actually be the trigger, with the market bloating on its impending flooding of cash into the market via rumor. 

But instead of being a nice warm cup of soup when it happens (and it will), when investors and pensioners and workers open up the can, it actually ends up being one big pile of shit.

Silverhog's picture

If your planning a shitty outcome, then were on the right path.

Racer's picture

Petrol in the UK is now 140p/L!!!!!!

DavidC's picture

I paid £1.428 per litre the other evening.
4.54609 litres to the gallon = £6.49 per gallon.
GBP/USD = 1.5810.
$10.26 per gallon.


unknownknowns's picture

'should be noted that a US gallon is about 0.833 the size of a UK gallon so price per gallon will be proportionally lower in US gallons.

jover's picture

Allright, i live in west-vlaanderen, belgium

1.77 euro/litre

8.04 euro/gallon

Wooop-wooop 1.3 EUR/USD

10.46 USD/Gallon



This was calculated from my Ipad

Agent P's picture

Hey Dave, looks like they're using the metric system to screw you!

blueridgeviews's picture

Ouch! How many times a month do you fill up?

j0nx's picture

In American English please Racer?

akak's picture

Seabirds in the UK now cost 140 parsnips per Lamprey.

Cursive's picture

I'm thinking the US is going to see food riot with an appearance of the Egyptian guy wearing a bread helmet.