I’m sure readers have by now seen the news from yesterday that the official US inflation rate has hit 8.5% year-on-year, according to the carefully edited, massaged and manipulated figures released by the government.
As we’ve noted on many previous occasions in these pages, that figure is a lie. It’s been carefully assembled to hew to a political agenda, not the truth, and it’s designed to do nothing but mislead us. As I and others have noted on many previous occasions, the true inflation rate is at least double the official figure, and probably higher. As far as actual consumer spending is concerned, minus all the “assumptions” and “substitutions” that the bureaucrats love to substitute for what we really buy, I stated in that earlier article:
To know the true rate of consumer inflation in the USA, take the official rate declared by the government and multiply it by 3½. The result will be much closer to reality.
You may quibble that it’s worse in some areas than in others, or take away or add half a point here or there, but in terms of the amount of money I see vanishing from my and my wife’s wallet, purse and bank account every month, that remains pretty accurate. On that basis, the current “official” inflation rate of 8.5% translates to an actual year-on-year inflation rate of 29.75%. You may as well call it 30%. It’s as near as makes no difference.
Karl Denninger, using only the official figures (not corrected for bureaucratic errors and adjustments), sums up what this means for our day-to-day lives.
Food is up a solid 10% over the last 12 months, energy is up a whopping 32% with fuel oil being up 71% (sucks to be you in the NE) and piped gas up 21.6%, electrical power is up 11% as well (so much for “green” anything) and there is zero evidence of used cars and trucks coming down as new vehicle prices are shooting the moon as well.
For urban workers its even worse; their weighting is different and there its up 9.4% over the last 12 months, wildly outstripping wage gains. Since these are clerical workers and other relatively lower-wage jobs its especially punishing if you live in a high-tax, high-cost area.
What’s much worse is that trying to flee is rapidly being foreclosed as mortgages are rising rapidly, you can’t take your other one with you, and thus if you have a nice 3% note welcome to Hell when you start shopping thinking you can trade one bubble for another and discover the replacement mortgage is 5%!
Note that the fuel oil problem is not just home heating oil; “fuel oil” is #2 diesel, basically, and its up 70% over the last year. Fuel oil goes into everything and is one of the curses of the so-called “green energy” screamers; making it expensive ruins pricing for everyone on everything since the farm combine runs on it, the truck runs on it, the train runs on it and so on. You literally can’t move anything in this country, nor produce it as the various goods must be moved from start to finish, without it — that is, the price of diesel is in every single thing you buy and consume.
. . .
Airlines fares are up a stunning 23.6%. So much for “consumer” air travel even if you are willing to wear a mask.
Housing is going to be a particularly-difficult area until and unless this trend is reversed — not stopped, reversed as looking at the internals various building and home furnishing supplies are up wild percentages. Flooring, for example (carpeting, etc.), is up 10%. Furniture is up 14-17%. Major appliances are up 12.4% (you don’t need a refer in that house, do you?) Outdoor equipment (weed whacker broke?) is up 12%. And cleaning supplies, which of course everyone buys, are up nearly 9%.
Apparel is almost as bad. There is good news — it’s nearly summer, so we can all go naked without freezing to death.
Need tires on your car? Bring money; up 16.4%.
There’s more at the link.
When you narrow down the numbers to individual categories, you can see that the overall inflation rate doesn’t necessarily equate to your personal inflation rate. The latter depends as much on what you, as an individual or family, buy (or don’t buy) as it does on the overall economy. (For example, if your home is paid off, you have a far lower housing component to your cost of living than if you were paying off a mortgage, or paying rent.) To determine your actual inflation rate, start keeping accurate records of your personal and household expenditure. Over the next year, note every cent you spend and what you buy with it. Keep your shopping receipts, and at the end of a year compare your household expenditure that month with what it was a year before. I think you’ll be horrified. (Have you seen the price of fresh beef or chicken lately???)
I’m seeing the impact of inflation right now with the improvements we’re making to our home. When I agree to a contract for work that’s going to take more than a month or two to complete, I’m finding, more often than not, a clause in the contract specifying that “adjustments” may be made to the price if costs rise more than a certain percentage. I’ll have no choice but to pay them – if I don’t, the contract will be abandoned or voided by the vendor, and the money I’ve paid for it thus far will be forfeited. Indeed, talking to a friend of mine who works for the supplier we used, the HVAC unit we installed last month would have cost us 8% more if we’d waited to install it until today. New tires for our SUV cost us about $160 apiece, fitted, when we bought it (used) four years ago. Two days ago, the same make and model of tire cost me $235 apiece; and I was warned that if I waited three months to order them, the price would likely be 15%-20% higher. Needless to say, I bought them now, and I’ll store them while I eke out the last miles until our present tires’ tread wears down to minimums. In a high-inflation environment, it makes sense to buy something you know you’ll need while you can afford it, rather than wait until you can’t!
Oh – and the claim from the Biden administration that this surge in inflation was caused by Putin’s invasion of Ukraine? Bull.
Even using the inaccurate, “official” inflation statistics, it’s very clear that since the Biden administration took office, its disastrous policies and ideologically- rather than reality-driven decisions have been key drivers of our worsening economy. I’m sure, as are many observers, that this is a deliberate effort to destroy what America has been up until now, in order to reshape our country into what they think it should be. Trouble is, they’re breaking down what we have without having any affordable, viable model with which to replace it – and we’re all feeling the pain.
Friends, things are not, repeat, not, I say again, NOT going to get better anytime soon. I fear this pattern has now been baked into our economic cake for the foreseeable future. Plan and act accordingly.
Here is a scarier thought:
Americans have historically voted their wallets. The Democrats know this, they know what these disastrous policies will cost them with the election only 6 months away, but still refuse to change course.
Why? The most obvious answer is that elections don't matter. That in turn makes one ask: "Why don't elections matter?"
The most obvious answer to THAT question is what really frightens me.
Another data point: I make limeade with fresh limes. A year ago, they were 20 cents apiece. This week, they're 35 cents each. That's a 75% price increase.
Elections won't matter until the cheating stops… It's obvious that no one on either side of the aisle wants it to stop.
Limes? They're almost a dollar each where I live… and limes are GROWN where I live! As for the REAL inflation, if it's any indication, I'm running around my house in the dark these days in order to have any HOPE of paying the electric bill! I'm paying hundreds a month just to live in the dark… Thanks Joe. Thanks Gavin… …Public hangings… We need them now…
I bought a freezer last year. 7 cubic feet, really small compared to what I grew up with. I bought the three year warranty. I bought another one for my sister this year, 25% increase in 6 months (Aug to Feb). I bought the warranty for it too. If it needs replacing, I'm not sure I can afford to. Had to rethink replacement costs.
This is starting to remind me of WW2 rationing… Making everything last….