(OPINION) – How does it feel to live in a country with double-digit inflation? On Tuesday, the Bureau of Labor Statistics told us that the consumer price index has risen 5.4 percent over the past 12 months, and such a high number shocked a lot of people.
But in order to make a fair comparison to the past, we have to account for the fact that the way inflation is calculated has been changed literally dozens of times over the past several decades. According to John Williams of shadowstats.com, if inflation was still calculated the way that it was back in 1990, the official rate of inflation over the past 12 months would be about 9 percent.
And if inflation was still calculated the way that it was back in 1980, the official rate of inflation over the past 12 months would be well into double-digits. Everyone that has been warning that we could soon see inflation rise to levels that we haven’t witnessed since the Jimmy Carter years can stop because we are already there.
The Bureau of Labor Statistics is committing fraud, because the numbers that they give us are almost meaningless. For example, U.S. home prices have risen 20 percent over the past year, but the “shelter component of inflation” makes up only a tiny fraction of the overall consumer price index… We’ll get the latest read on inflation Tuesday when the Bureau of Labor Statistics puts out its consumer price index for the month of June.
As you may recall, the May report showed the biggest annual increase in consumer prices, 5%, in 13 years. But if you’re looking for the recent jump in home prices to show up in that number, you’re likely to be disappointed. The shelter component of inflation, as measured by the CPI, has stayed pretty steady, from around 2% to 3.5%, for the past decade. And some economists have a problem with that.
Wouldn’t it be wonderful if your mortgage payment accounted for only 3.5 percent of your overall budget each month? Needless to say, such a figure is completely and totally unrealistic. For most of us, housing is the single biggest expense that we face on a regular basis. And as I have documented in many previous articles, housing costs have been soaring into the stratosphere in recent months.
Car prices are also rising at an extremely alarming pace. According to CNN, the average price of a new car has shot up 12 percent over the past year… In May, the average new car price hit a record $38,255, according to JD Power, up 12% from the same period a year ago. About two-thirds of car buyers paid within 5% of the sticker price in May, with some paying even more.
Instead of buying a new vehicle, you could purchase a used one instead, but used car prices increased 10.5 percent in just the last month… Last month alone, average used car prices soared 10.5 percent – the largest such monthly increase since record-keeping began in January 1953.
That spike accounted for about one-third of the monthly increase for the third straight month. Renting vehicles has gotten a lot more expensive as well. In fact, average rental rates are up a whopping 86 percent since this point in 2020… Daily car rental rates have increased 86% compared to this time last year and 140% more than 2019, according to Julie Hall, a spokesperson for AAA.
The “5.4 percent inflation” fairly tale that the Labor Department is trying to sell us is absolutely laughable. And as long as they keep putting out such doctored numbers, they are going to have zero credibility. Everyone can see that prices are skyrocketing all around us. In such an environment, a restaurant in New York can charge 200 dollars for French fries and some people will actually pay that price…READ MORE