View Full Version : Inflation: The Greatest Inflation-creator in the world is the US Federal Reserve
26th February 2011, 05:59 PM
Duration: 35:21 min
7th June 2011, 06:41 AM
NIA Releases U.S. Economic and Inflation Update (http://inflation.us/economicupdate.html)
The official U.S. unemployment rate rose during the month of May to 9.1%, up from 9% in April, with only 54,000 non-farm jobs being created for the month. The real unemployment rate including short and long-term discouraged workers is now 22.3%. The Bureau of Labor Statistics (BLS) used the birth/death model to produce a positive monthly bias during the month of May of 206,000 jobs, up from 175,000 in April, 117,000 in March, and 112,000 in February. Without the birth/death model, 152,000 jobs were lost during the month of May.
By utilizing the birth/death model, the BLS is assuming that during the month of May, the number of new jobs created by start-up businesses were 206,000 greater than the number of jobs lost from companies going out of business. NIA finds this assumption to be absurd and believes it is likely that jobs lost from companies going out of business were actually much higher than jobs created by new start-up firms. It is obvious to us that the BLS is using the birth/death model to manipulate unemployment figures to make the U.S. employment situation seem far less worse than it truly is. There is absolutely no legitimate reason for the birth/death model upward bias to have increased 84% over the past three months.
McDonald's recently had their own "National Hiring Day" in which they encouraged Americans to apply for new jobs at the company. All together, 1 million Americans applied for 62,000 jobs at McDonald's and over 900,000 Americans had to be turned down. To us, this is a sign that despite government economic statistics that are bottom bouncing from their lows due to the Federal Reserve printing trillions of dollars out of thin air, the U.S. economy is still in a severe downturn without the possibility of a real recovery. It is NIA's belief that the Fed needs to allow the U.S. economy to enter into a severe depression where all bad debts can be liquidated and the free market can rebalance the economy from the ground-floor with a solid foundation.
The fact that the BLS needs to resort to deceptive birth/death model manipulative practices to give the appearance of any job creation, proves that the Federal Reserve's destructive monetary policies of zero percent interest rates and endless money printing are not creating a sustainable reduction in the unemployment rate. Bernanke can claim all he wants that America's inflation is transitory, but the only thing transitory about our economy is the artificial decline in the official U-3 unemployment rate from its peak in October of 2009 of 10.1%. The real unemployment rate has increased since October of 2009 and NIA believes that the official unemployment rate will likely rise back into double-digit territory in 2012.
From October of 2009 until now, the number of employed Americans has increased by 1.09% while the U.S. population has increased by 1.12%. The only reason the official unemployment rate has declined from 10.1% down to 9.1% is a decline in the labor force participation rate from 65.1% down to 64.2%. Based on what the labor force would be today if the participation rate had stayed the same over the past 20 months and factoring in the increasing population, 2.1 million Americans have completely given up looking for work.
The 1.09% increase in employed Americans over the past 20 months comes at the expense of a $1.30 increase in the price of gas from $2.48 to $3.78 per gallon for a gain of 52% during this time period. Many agricultural commodities have increased over the past 20 months by an even greater percentage than gas. Although prices of all commodities are volatile and have many short-term ups and downs, NIA believes that gas prices are heading to $5 per gallon over the next 12 months and food inflation is going to rapidly accelerate in the months and years ahead.
Prices are now beginning to rapidly rise for U.S. goods outside of the food and energy sectors. 90% of sporting goods manufacturers have seen their input costs rise substantially this year and 41% of them have already announced major price increases for athletic apparel, footwear, and sports equipment. As the 8,000 toy manufacturers in China are forced to raise the wages they pay their employees, Toys R' Us is now beginning to see major wholesale price increases for their products, which they will have to pass on to U.S. consumers. Hasbo recently raised prices on all of their products by 6% to 7%. Mattel recently imposed an across the board high single digit price increase after reporting a 33% decline in quarterly profits (despite sales surging by 8%) due to skyrocketing raw material costs.
The U.S. is about to be cut off from its two largest foreign lenders China and Japan, which means the Federal Reserve will need to fund all of the U.S. government's deficit spending through outright money printing. Federal Reserve holdings of U.S. treasuries just reached a new record of $1.532 trillion. Meanwhile, China's U.S. treasury holdings have fallen five months in a row down to $1.145 trillion. Chinese central bankers are now calling for the country to reduce their foreign exchange reserves, which have increased by $200 billion this year up to over $3 trillion. Japan is currently the third largest holder of U.S. treasuries with treasury holdings of $907.9 billion. Unfortunately, Japan is in desperate need to raise $300 billion to fund their rebuilding efforts and this will likely come from them dumping some of their U.S. treasuries, during a timewhen the U.S. desperately needs Japan to buy more U.S. treasuries than ever before.
If we look back at previous occurrences of hyperinflation in countries like Bolivia and Brazil, hyperinflation broke out as soon as their central banks were forced to begin monetizing the bulk of their government's deficit spending, as foreigners stopped lending. China's inflation crisis is a direct result of the Fed's quantitative easing and the monetary inflation that we have exported to them in return for their sporting goods, toys, and other products they produce. If China stops buying U.S. treasuries and decides to instead use their foreign currency reserves to accumulate gold that can be used to back their own currency, the Fed will have no other choice but to become the U.S. treasury buyer of last resort. Not only will we see quantitative easing to infinity, but we will see the $1.5 trillion in excess reserves currently parked at the Fed enter intothe money supply and increase the money supply by as much as $15 trillion.
Besides gold, one place where the Chinese are investing their money in order to diversify out of U.S. dollars is Real Estate. Housing prices in Beijing and Shanghai rose 28% and 26% last year respectively. With concerns that Chinese Real Estate is becoming a bubble, the Chinese are now buying Real Estate in North America. However, they are avoiding the U.S. Real Estate market because of the civil unrest that will take place in major U.S. cities during hyperinflation due to empty store shelves. The most popular destination for the Chinese in North America is Vancouver, where Real Estate prices are now more expensive than New York City. While New York City Real Estate prices still haven't finished deflating, Vancouver Real Estate prices are soaring to new record highs due to Chinese buyers, with the average Vancouver home price rising 14% last year. In theWestside section of Vancouver, housing prices are up 77% since 2005.
Canada's GDP grew by 3.9% in the first quarter of 2011 on an annualized basis, up from 3.1% in the fourth quarter of 2010, 2.5% in the third quarter of 2010, and 2.3% in the second quarter of 2010. Canada's GDP growth has increased for four straight quarters. U.S. GDP growth in the first quarter of 2011 declined to 1.8% on an annualized basis, down from 3.1% in the fourth quarter of 2010. Canada's Prime Minister Stephen Harper just announced plans on Friday to attract more foreign capital and diversify trade in an attempt to protect Canada from a collapsing U.S. economy.
The U.S. still has a AAA credit rating even with its 2011 budget deficit projected to reach 43% of government expenditures, exactly the same as Brazil's budget deficit as a percentage of expenditures right before they experienced hyperinflation. There is a major charade taking place in Washington today where Republicans are calling for spending cuts to take place in order for them to approve an increase in the debt ceiling. NIA predicts that the debt ceiling will be raised no matter what, most likely at the very last minute. We have zero confidence that Washington will implement any kind of meaningful spending cuts. The U.S. government clearly chose inflation over austerity in its attempt to stimulate the economy. It doesn't make sense for them to reverse course now, because then they will look incompetent for not having chosen austerity to beginwith.
The U.S. currently has a budget deficit from Social Security, Medicare, Medicaid, and other mandatory programs alone, without even paying the interest on our national debt. Major entitlement spending cuts are necessary if we are going to have even the slightest hope of balancing the budget and preventing hyperinflation. Unfortunately, most Americans have become dependent on entitlement programs and government transfer payments just to survive. These Americans fail to realize that the reason they are dependent on food stamps and other transfer payments to survive is because of the government's deficit spending and the Federal Reserve's massive monetary inflation. Only when the dollar completely collapses and Americans' unemployment and Social Security checks aren't worth enough to pay for the gas needed to drive to the bank to cash them, will theyunderstand the need to elect a President like Ron Paul who will mandate a balanced budget and return the country to sound money, but by that time it will be too late. The only way America will survive as an industrialized nation is if we educate as many Americans as possible to the facts and truth about the U.S. economy that the mainstream media ignores, so that as many Americans as possible can prepare for hyperinflation and we have enough resources to rebuild afterwards.
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us
29th July 2011, 09:31 PM
31st August 2011, 02:32 AM
The Largest Bubble in U.S. History (http://inflation.us/largestbubblehistory.html)
August 30, 2011
On August 6th after S&P downgraded the U.S. debt rating from AAA to AA+ with a negative outlook, NIA prayed that Americans would not make the mistake of buying U.S. Treasuries as a safe haven. We normally don't pray about economic matters, but only God can save the U.S. economy today as well as investors who have been brainwashed into believing U.S. government dollar-denominated bonds are a safe place to store wealth. Unfortunately, only when hyperinflation arrives will the majority of American citizens realize that fiat U.S. dollars should be used as a medium of exchange only and not a place to store wealth.
Since NIA was launched two and a half years ago, the overwhelming majority of our economic predictions have come true, with many of our accurate predictions being unique only to us. Sometimes we are a bit early with our predictions, but they almost always eventually come true. One of our predictions that we have been wrong about in the short-term, but will be proven right about later this decade, is the collapse of the U.S. Treasury market.
We thought there was a chance that many Americans would once again make the mistake of buying U.S. Treasuries during the recent sell-off of global financial markets, but we were shocked to see the yields of some U.S. Treasuries such as the 10-year bond, decline to new record lows. The yields of many government bonds have fallen through their lows of late-2008, but unlike the liquidity crisis of late-2008 when gold prices declined to a low of $720 per ounce, gold futures on August 22nd reached a new all time nominal high of $1,899.40 per ounce.
NIA likes gold as a bet against the U.S. Treasury market, which we believe is the largest bubble in world history. Any investor buying 10-year Treasuries with a yield of only 2.20% needs to have their head examined. Based on official Bureau of Labor Statistics (BLS) data, year-over-year price inflation in the U.S. is already 3.63%. NIA estimates the real rate of price inflation to currently be approximately 8% and we project real price inflation to reach double-digits next year. NIA finds it very unlikely that the U.S. will be able to survive the next ten years without hyperinflation.
Take a look at the long-term chart of 10-year yields below. After the inflationary crisis of the 1970s, 10-year yields surged to a high in the early-1980s of 14.5%. After inflation began to decline in the mid-1980s, the 10-year yield bottomed at 7% before rising again to 9%. In the 1990s, the 10-year yield averaged around 6.5%.
With the help of NIA's critically acclaimed economic documentaries including 'Meltup', 'The Dollar Bubble', and 'Hyperinflation Nation' that have been seen by millions of people, a larger percentage of the investment community is educated than ever before about the currency crisis that is ahead. We estimate that about 1/10 of our country now finally understands that as long as we are running massive budget deficits with our government making no real attempt to cut spending in a meaningful way, gold will keep increasing in nominal value and the U.S. dollar will continue losing its purchasing power. However, 9/10 of our nation still doesn't understand why they should own gold and would chase after $1,000 in cash being blown by the wind before picking up a 1 oz gold coin lying below them on the ground.
Investors today are buying and selling assets based on what they perceive to be risk assets and safe haven assets. Market volatility is now at a level last seen in March of 2009 towards the end of the last financial crisis. On days with either positive economic news or rumors that Bernanke is getting ready to unleash QE3, stock prices rise while the prices of both gold and U.S. Treasuries fall. On days with either negative economic news or rumors that Bernanke is unlikely to unleash QE3, stock prices fall while both gold and U.S. Treasury prices rise. Investors are buying both gold and U.S. Treasuries as a safe haven. Those buying U.S. Treasuries as a safe haven are doing so based on the market's actions in late-2008 when Treasuries rallied with the stock market collapsing. They fail to realize that every financial crisis is different and the next crisis will be nothing like 2008.
In 2008, we had a crisis due to a lack of liquidity. Today, the world is flooded with liquidity, but most people don't realize it yet because trillions of dollars are being hoarded on the sidelines and not chasing goods and services. Nobody knew for sure in 2008 how the Federal Reserve would react to the liquidity crisis. If the Federal Reserve did the right thing and allowed banks to fail we would have experienced many years of deflation. The Federal Reserve has made it clear that they will print enough money to bailout all major banks or other companies deemed "too big to fail". We are in a situation where the worse the economy gets, the more money the Fed will print and the higher prices of all assets will rise.
NIA predicts right now that over the next 16 months between now and the end of calendar year 2012, we will see the largest short-term increase in 10-year bond yields on a percentage basis in history. With CPI growth increasing for eight straight months and even the Fed's misleading core-CPI growth up 290% since October on a year-over-year basis, investors will soon realize that it is far too risky to own bonds that are paying such low yields.
President Obama yesterday nominated Alan Kreuger to lead his Council of Economic Advisers. We laughed when he heard Obama tell Kreuger that it will be tough for him to fill the shoes of Austan Goolsbee, who recently left his post to resume teaching at the University of Chicago. Whether it be Kreuger, Goolsbee, or Christina Romer (who preceded Goolsbee), they are all Keynesians who believe that more government spending and intervention is the key to bringing down unemployment and having a healthy economy.
Krueger worked in the White House during the first two years of the Obama administration as assistant Treasury secretary for economic policy. Krueger received his Ph.D. in economics from Harvard University and has worked at Princeton University since 1987, where his mail frequently gets mixed up with fellow Keynesian and New York Times op-ed columnist Paul Krugman. Krueger is the author of a book that was written solely to convince readers that having a high minimum wage doesn't cause unemployment. It should be common sense to all NIA members that if the government raised the minimum wage to $50 per hour, unemployment would rise dramatically as most jobs paying wages below $50 per hour would be destroyed. The truth is, eliminating the U.S. minimum wage would create thousands of new entry-level jobs in America and help lower the unemployment rate. Krueger was also instrumental in developing the "cash-for-clunkers" program, which NIA has written about on many occasions as being a monumental disaster for the U.S. economy.
It is absurd how the mainstream media calls Ron Paul an extremist for wanting to eliminate government intervention in our financial markets, reduce government spending, balance the budget, stop the Fed from printing money, and return to sound money. In NIA's opinion, Krueger is the real extremist. If there was no minimum wage and there never was "cash-for-clunkers", many unemployed 17 year old kids who are home on Facebook, could instead be out earning enough money to buy their own used car. The youth unemployment rate is currently double the overall unemployment rate and used car prices are up 20% during the past year, because of the policies supported by Krueger.
The U.S. government used "cash-for-clunkers" to buy phony GDP growth in 2009, stealing from future automobile sales. After the "cash-for-clunkers" program ended, General Motors reported that their sales in August of 2010 declined 25% from sales in August of 2009. NIA predicted on September 1, 2010, that this would lead to a sharp contraction in GDP growth and cause the Fed to unleash the mother of all quantitative easing. Two months later on November 3, 2010, the Fed announced $600 billion in additional quantitative easing.
GDP growth in the 4Q of 2010 declined to 3.14% on a year-over-year basis, down from 3.51% in the 3Q of 2010. GDP growth has continued to decline lower this year to 2.24% in the first quarter and 1.55% in the second quarter (which was just revised downward from an initial estimate of 1.62%). The BLS used a price deflator of only 2.5% in the 2Q. In our opinion, real GDP in the U.S. today is already in negative territory. With it becoming increasingly likely that official year-over-year GDP changes will become negative by the end of calendar year 2011, it is only a matter of time before the Federal Reserve unleashes QE3 in disguise under a new name.
With the Federal Reserve no longer reporting the M3 money supply, the broadest measure of money supply currently reported by the Fed is M2. During the past few weeks, the U.S. has been seeing a very alarming rise in M2. The M2 money supply has risen $228.5 billion over the past four weeks to $9.5218 trillion. On an annualized basis, this equals a 32% increase in M2. Much of this gain can be attributed to people moving funds from institutional money funds and large time deposits into checking and savings accounts. Investors are nervous about the state of our economy and as soon as the investment community begins to realize that the next economic crisis will be a currency crisis, not a liquidity crisis, we will see the world lose confidence in the U.S. dollar and rush out of U.S. Treasuries and into gold, silver, and other real assets.
It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us
20th October 2011, 09:19 PM
NIA Exposes Occupy Wall Street Truth (http://inflation.us/occupywallstreet.html)
The Occupy Wall Street movement is gaining tons of momentum and is likely to continue picking up steam in the weeks and months ahead. Americans are angry but they aren't exactly sure what they are angry about and they don't know for sure who they should be angry with. It is easy for them to point their fingers at Wall Street, but Wall Street is in no way responsible for the financial crisis our country has today.
NIA believes that Occupy Wall Street protesters need to be educated to the facts and truth about the U.S. economy and what is truly causing our economic problems. NIA is getting ready to release 'Occupy Wall Street the Documentary', which NIA has produced so that Occupy Wall Street protesters can understand exactly what changes need to be made in America if our country is going to survive the Hyperinflationary Great Depression that will soon hit America and steal all remaining purchasing power that the U.S. dollar still has left.
NIA first saw signs of the protests taking place today back in November of 2009 when we were in Beverly Hills filming our documentary 'The Dollar Bubble'. We were alerted by NIA members to a major protest that was breaking out at the University of California. We went to see it and witnessed a very violent protest of students upset about a 32% increase in college tuition for the next semester.
The UCLA protest showed us just how angry Americans can become about inflation. Because we were forecasting massive food inflation to start breaking out in 2010, we made the prediction that we would see large "End the Fed" protests beginning in 2010. We did see massive food inflation in late 2010, accelerating greatly throughout 2011. However, we overestimated the ability for average Americans to quickly point the finger at the Federal Reserve. We also didn't expect many citizens of foreign countries, especially Arab nations, to begin protesting before Americans did.
About one year after the violent UCLA tuition inflation protest that we witnessed, a larger even more violent tuition inflation protest broke out in London. When Prince Charles' security detail made the mistake of driving him and the Duchess of Cornwall past the area where the protest was taking place, in a vehicle that cost more than what each protester will earn in the next ten years combined, about 50 of the protesters broke through the motorcycle police protecting the Prince chanting "Off with their heads!", beating on the side of their Rolls-Royce with sticks and bottles. Luckily, the car was armored and only suffered minor damages, keeping Prince Charles and the Duchess safe. A Jaguar behind it containing police officers was destroyed to the extent that the officers ended up using car doors from the Jaguar as shields, which still couldn't prevent six of them from being seriously injured.
The food inflation protests that NIA had been expecting for over a year, started to break out in late January of this year in Algeria, with citizens chanting "Bring Us Sugar!" Eight citizens were killed during the protests in Algeria. This quickly spread to a massive outbreak of civil unrest in neighboring Tunisia, where thousands protested food inflation and high unemployment. The Tunisian revolution led to the ousting of longtime President Zine El Abidine Ben Ali, but came at the expense of 79 protesters being killed.
This rapidly spread to the riots in Egypt. Before the Egyptian protests even began, six Egyptian citizens committed suicide in front of government buildings by dousing themselves with fuel and lighting themselves on fire. All together, 846 protesters were killed across different parts of Egypt and over 6,000 more were injured. The Egyptian protesters were eventually successful at getting Egyptian President Hosni Mubarak to resign from office.
NIA saw the resignation of Mubarak as a farce from the beginning. We couldn't understand how thousands of angry Egyptians who were calling for Mubarak's head would within seconds of his resignation announcement erupt into cheers like Egypt had just won the World Cup. The resignation of one man would not eliminate the corruption in Egypt's government and fix their inflation and jobs crisis. Most of Mubarak's cronies are still in power. Mubarak agreed to just take one for the team. For the protesters to declare victory and go home after one man announced his resignation shows that most of the protesters were sheep who were just copying their friends without having a real grasp on the issues affecting the economy in Egypt. What if Mubarak came back on television and said "I was just kidding" or "I just changed my mind and decided not to resign", would the protesters have come back?
After Egypt, the protests spread to Jordan and Yemen. Once again, food inflation was the main root cause of the protests, something that the mainstream media in the U.S. largely ignored when reporting on the protests. The American mainstream media was not allowed to discuss inflation when corresponding about the global inflation protests, because it didn't want the world to connect the dots and realize that Federal Reserve Chairman Ben Bernanke is more responsible for the global food inflation crisis and protests than the leader of any foreign country.
Because of the U.S. dollar's status as the world's reserve currency, the majority of the world's most important agricultural and energy commodities are traded in U.S. dollars. When Bernanke prints trillions of dollars out of thin air in an attempt to reinflate the Real Estate bubble and lower unemployment in the U.S., it has a direct affect on what foreigners pay for all goods and services around the world. With China printing massive amounts of Yuan to keep it pegged to the U.S. dollar and the Bank of Japan intervening to keep the Yen from appreciating too rapidly against the U.S. dollar, countries like Australia are now quick to blame any short-term dip in manufacturing, agriculture production, or energy commodity exports on their currency being too strong against not just the U.S. dollar but the Yen, Yuan, and most other fiat currencies.
In just the last two weeks, the Australian dollar has risen 9.5% against the Yen, 8.5% against the U.S. dollar, and 8.6% against the Yuan. It should be no surprise to NIA members that attempts to copy "Occupy Wall Street" in Australia have been dismal. After 1,000 protesters initially showed up in Sydney on Saturday for their own "Occupy Wall Street" protest that was supposed to continue "indefinitely", less than 50 protesters remained on Monday as most people returned to work. Australia doesn't have an inflation or unemployment crisis because their central bank did the right thing and raised interest rates to 4.75% at a time when everybody else was lowering them. This is why since the inception of NIA we have always suggested Australia as our top choice for Americans to move to if they want to get out of harms way before hyperinflation hits the U.S. We hope that the Reserve Bank of Australia will continue to do the right thing and ignore calls from all around the world for them to lower rates.
The mainstream media is currently once again focused on the financial crisis in Europe, which is temporarily distracting from the debt crisis that really matters in the U.S. On Halloween, the official U.S. national debt for the first time ever will surpass U.S. GDP. At any time now without any warning or any new catalyst, we could see a huge onslaught of dollar dumping that causes the economic equivalent of 9/11.
There is no hope of preventing hyperinflation in America when President Obama is unwilling to consider any measure that would cut government spending in a meaningful way. In August when the Budget Control Act of 2011 was enacted by Congress, the mainstream media was widely reporting that the "supercommittee" formed by the act would be in charge of finding $1.5 trillion in spending cuts by Thanksgiving. In reality, this "supercommittee" that Obama was so heavily relying on to pay for his proposals in his "jobs bill", is not responsible for finding $1.5 trillion in spending cuts but only a $1.5 trillion reduction in the budget deficit over 10 years.
Obama promises to veto any proposals that make large spending cuts, especially to entitlement programs. Many Democrats are calling for a new 5% "surcharge" on Americans earning over $1 million per year. Within a few years, an annual income of $1 million will only have the purchasing power of what a $100,000 salary has today. This proposed new tax would discourage small business owners from expanding and hiring new employees. It would destroy any remaining hope that is left for a real economic recovery and encourage most American entrepreneurs to leave the country permanently.
The U.S. Bureau of Labor Statistics (BLS) yesterday released their consumer price index (CPI) data for the month of September. The BLS reported year-over-year CPI growth of 3.87%, the highest rate of U.S. price inflation in three years. The official government reported year-over-year U.S. price inflation rate of 3.87% for September was up from 3.77% in August, 3.63% in July, 3.56% in June, 3.57% in May, 3.16% in April, 2.68% in March, 2.11% in February, 1.63% in January, 1.5% in December, and 1.1% in November. Year-over-year increases in the CPI have risen by 252% over the last ten months.
Even year-over-year core-CPI growth rose for the 11th straight month to 1.97% in September, an increase of 223% from year-over-year growth of 0.61% in November. NIA estimates the real rate of U.S. price inflation to currently be 8.5% on a year-over-year basis. It was just announced that American retirees receiving Social Security will receive a 3.6% COLA increase, the first increase since 2009. Social Security is the main reason the U.S. government reports artificially low CPI numbers. By giving retired Americans only a 3.6% Social Security payment increase when real price inflation is now 8.5%, Congress gets to spend the difference in the ways they see fit.
With inflation spiraling out of control, the government knows that they soon won't be able to afford even the artificially low COLA increases they are making today. Congress is now exploring ways to keep future COLA increases as low as possible. Many clueless Keynesian economists in Washington are now arguing that the inflation measure the government uses to calculate COLA increases, the CPI-W, is overestimating true increases in the cost of living. These economists claim that Americans can shift between items and if veal prices are rising too much, they can eat chicken or if lobster prices are rising too much, they can eat shrimp. They propose that the government switches to a version of CPI that accounts for these changes, called "chain weighted" CPI.
All Americans know that their cost to maintain the same standard of living has increased by a lot more than 3.6% over the past year. The CPI-W being used today already artificially understates inflation so much that current Social Security recipients deserve to be receiving triple their current payments. If "chain weighted" CPI was being used today, American seniors would only receive a 3% COLA increase next year.
If the U.S. government did the right thing and invested all FICA tax receipts into gold, it would be able to give Social Security recipients an increase next year of around 8.5% like they should be entitled to. American seniors are being hurt most by inflation because health care has consistently had the highest rate of inflation out of all goods and services. A COLA increase of 3.6% is nothing when NIA estimates the real rate of health care inflation to currently be 15% or 76.5% higher than the overall real rate of price inflation. To artificially lower COLA increases even more would mean utter devastation to the U.S. economy as seniors would need to reenter the workforce and Americans with jobs would need to stop spending money on goods and services in order to help their parents. This would mean even less jobs for the youth in America and less support for them from their parents.
If you would like your friends and family members to be the first to see'Occupy Wall Street the Documentary' coming soon, simply tell them to become a member of NIA for free today at: http://inflation.us (http://inflation.us/)
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