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The real rate of US inflation

I've just gathered some data from the US bureau of labor statistics.

They track prices for different commodities. I've just done a quick comparison on 14 of the most widely tracked items. Things like a gallon of milk, gallon of gas, loaf of bread, 1 lb of ground beef, 1 lb of chicken, 1 lb of coffee, ETC....

When charted out, those 14 common household goods have shown an average inflation rate of 50% over the last 10 yrs.

This is a far more accurate measurement of actual inflation than the crap their trying to sell us via the CPI, or any of their other under estimated figures as of late.

1 gal Fuel oil 148.95%
1 Gal of gas 128.2%
Loaf of bread 49.37%
1 lb of ground beef 51.53%
1 lb of chicken 40.77%
1 doz eggs 24%
1 gal of milk 26.6%
1 lb apples 36.5%
1 lb oranges 75.28%
1 lb bananas 18.36%
1 lb of tomatoes 10.94%
12 oz orange juice 30.15%
1 lb of coffee 76.31%
1 KW electricity 57.14%
Piped gas per therm 6.22%

check it out for yourselves.

http://data.bls.gov/cgi-bin/surveymost



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You do realize that

what you are stating is the result of, but not inflation. Inflation is an increases in the medium of change (both printing and credit creation).

The Fed actually states that:

inflation in the U.S. should have been about 31 percent per year between 2008 and 2013, when the money supply grew at an average pace of 33 percent per year and output grew at an average pace just below 2 percent.

The money supply doesn't

The money supply doesn't determine inflation.

Right on.

Right on.

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Try and convince the people of zimbabwe

LOL!

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Todays brainwashing: GMO's are safe

Inflation is the general increase in money supply

Goldspan is right, I just learned this last week actually. Govt redefined inflation, they want us to think of it as increase in prices, then they can blame other factors, such as greedy businesses.

This link explains it real well:
http://wiki.mises.org/wiki/Inflation

:) I loved the downvotes on

:) I loved the downvotes on my post. A lot of people here that truly don't understand the cause of inflation. Inflation is NOT just the increase in money supply. Sure, increasing the money supply is not a good idea, but it is not what actually causes inflation.

Monetarist Milton Friedman would obviously disagree with this, as he was a huge proponent of the Quantity Theory. Except, Ludwig von Mises obliterated the Quantity Theory decades earlier in his book Theory of Money and Credit. In it he explains how the money supply could double, yet you won't see double the inflation and you could even see no inflation! It's a great book, and I won't give away any spoilers. Although be warned, it's long and it took me a couple months to get through.

thanks doin

But remember inflation by definition is an increase in the money supply. The result is the loss of purchasing power of the medium of exchange. It's no more complicated than good old supply and demand.

You're not worng .....if you trust the Fed

They can't tell the truth.....they can't say "inflation is an increase in the medium of exchange".....if they did they would be admitting that.....1)they are doing it and.....2) an increases in one decreases the other. They can't say we are providing more money to the system....but don't worry you won't be able to purchase as much.

They would rather try and sell you this " inflation is a general increase in the overall price level of the goods and services in the economy".

To believe that you would have to believe that the Fed is so powerful over the entire economy that they can raise the prices of goods and services by an specific amount whenever they want. Just the experience right now would tell you they can't. They want a 2% inflation rate. The only power they have is to dilute the purchasing power of the dollars in existence ......by increasing the number of dollars...by "inflating" the number of dollars....anything after that is the "result" of that action.

You may think I am splitting hairs....but this is a very important distinction.....because when the SHTF the Fed will be looking for scapegoats... but they won't look in the mirror. One of the cornerstones of Libertarian/Austrian thought is "Sound Money".

So the hair I am splitting is actually the difference between Austrian and Keynesian Economics.

This is a HUGE DEAL!

http://www.youtube.com/watch?v=d0nERTFo-Sk

I was joking :)

Thanks Goldspan for being passionate about the subject. I am too. My sarcasm wasn't captured in my previous message. I totally meant it as a joke, given the source.

Thanks for clarify that for me Max,

humor and sarcasm gets lost on an old fart like me in this modern forum where there is no expression.

Man I really wanted an answer from this guy

and y'all stepped all over my question.....so allow me to ask it again.

What exactly do you think they are inflating?

My comment was short,

My comment was short, intentionally left with no context, as I was only going to explain if I got replies and downvotes...which I did, so here's the comment fleshed out.

Mises laid out almost 100 years ago in Theory of Money and Credit how money supply can increase but the purchasing power may not decrease. There is no direct correlation between increase of money supply and decrease of purchasing power. There's another more important factor, and it's the individual. This is why the Fed has been able to quadruple the monetary base since 2008, yet we don't have quadruple the prices. It goes much deeper than that. Mises laid out some great examples on why the Quantity Theory is a fallacy, and I would really recommend checking the book out if you're interested.

Thanks for bringing up Mises

.....it's been oh so long since I have read him, I've forgotten how eloquent he can be.

I wasn't necessarily talking about the Quantity Theory of Money as much as The Quantity of Money vs the Demand for Money which Mises addresses on page 137.

When Mises is addressing The Quantity Theory of Money he is talking about the "subjective value of money" and not the objective exchange value when a increases in the money stock occurs.

"The demand for money and its relations to the stock of money forms the starting-point for an explanation of fluctuations in the objective exchange-value of money. Not to understand the nature of the demand for money is to fail at the very outset of any attempt to grapple With the problem of variations in the value of money."

"In the history of money a particularly important part has been played by those variations in its objective exchange-value that have arisen in consequence of an increase in the stock of money while the demand for it has remained unchanged or has at least not increased to the same extent. These variations, in fact, were what first attracted the attention of economists; it was in order to explain them that the Quantity Theory of Money was first propounded."

"In whatever way we care to picture to ourselves the increase in the stock of money, whether as arising from increased production or importation of the substance of which commodity money is made, or through a new issue of fiat or credit money, the new money always increases the stock of money at the disposal of certain individual economic agents. An increase in the stock of money in a community always means an increase in the money incomes of a number of
individuals; but it need not necessarily mean at the same time an increase in the quantity of goods that are at the disposal of the community, that is to say, it need not mean an increase in the national dividend. An increase in the amount of fiat or credit money is only to be regarded as an increase in the stock of goods at the disposal of society if it permits the satisfaction of a demand for money which would otherwise have been satisfied by commodity money instead, since the material for the commodity money would then have had to be procured by the surrender of other goods in exchange or produced at the cost of renouncing some other sort of production. If, on the other hand, the non-existence of the new issue of fiat or credit money would not have involved an increase in the quantity of commodity money, then the increase of money cannot be regarded as an increase of the income or wealth of society."

"An increase in a community's stock of money always means an increase in the amount of money held by a number of economic agents, whether these are the issuers of fiat or credit money or the producers of the substance of which commodity money is made. For these persons, the ratio between the demand for money and the stock of it is altered; they have a relative superfluity of money and a relative shortage of other economic goods. The immediate consequence of both
circumstances is that the marginal utility to them of the monetary unit diminishes. This necessarily influences their behavior in the market. They are in a stronger position as buyers. They will now express in the market their demand for the objects they desire more intensively than before; they are able to offer more money for the commodities that they wish to acquire. It will be the obvious result of this that the prices of the goods concerned will rise, and that the objective exchange-value of money will fall in comparison. But this rise of prices will by no means be restricted to the market for those goods that are desired by those who originally have the new money at their disposal. In addition, those who have brought these goods to market will have their incomes and their proportionate stocks of money increased and, in their tum, will be in a position to demand more intensively the goods they want, so that these goods
will also rise in price. Thus the increase of prices continues, having a diminishing effect, until all commodities, some to a greater and some to a lesser extent, are reached by it."

"The increase in the quantity of money does not mean an increase of income for all individuals. On the contrary, those sections of the community that are the last to be reached by the additional quantity of money have their incomes reduced, as a consequence of the decrease in the value of money called forth by the increase in its quantity; this will be referred to later. The reduction in the income of these classes now starts a counter-tendency, which opposes the tendency to a diminution of the value of money due to the increase of income of the other classes~ without being able to rob it completely of its effect."

It's like read poetry isn't it......So the question remain....what do you think they are inflating? The answer should have been the money supply.....and the resulting price increases are the result. That's the only thing I was after......can we now agree?

Mises was definitely a pleasure to read

If were just asking what are they trying to inflate with the increase of money supply? Then yes, you're absolutely correct, they're trying to inflate prices.

I was just pointing out that there's not a science in that increasing the money supply by x will also increase prices by x. If I misunderstood you, sorry about that.

Here is another thread on here

where the topic was velocity in the Quantity of Theory equation you might like. I pulled from Henry Hazlitt.

http://www.dailypaul.com/325479/fed-us-consumers-have-decide...

If you decide to read the thread.....check out the St Louis Fed white paper referenced to write the CNBC article......it's really not very well done, shallow and a lot of assumptions, it's hard to believe they publish this and don't have it called out as the crap it is. But hey it was good enough for CNBC.

I'll check out your

I'll check out your referenced material later tonight.

It's technically true, since

It's technically true, since a trillion dollars lost at sea doesn't affect prices. Upvote for da TROOF.

Author of Shades of Thomas Paine, a common sense blog with a Libertarian slant.

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Um, yes, that's the definition of inflation

whether the consequence is rising prices depends on a multitude of economic factors that take place in a world of supply and demand. If there is more money produced, that money is going somewhere, and thus there is rising prices where it is used. There is certainly higher prices in the area which that extra money was used. If they money is parked at banks that are buying bonds to take advantage of the spread and real estate, then there are two areas where price inflation is happening and actual price discovery doesn't occur.

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Two types of inflation

There are two types of inflation: Monetary inflation and price inflation. Monetary inflation generally precedes price inflation. It takes some amount of time before the increase in the money supply starts to drive-up the prices of goods and services, but once it gets going, price inflation will catch-up-with, and often surpass the monetary inflation. What matters in the long term is monetary inflation, but in the short term, human perception governs price inflation.

Then tell us

What exactly are they inflating?

Bananas only 18%

Banana Republic, coincidence?

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