Inflation Is Starting To Get Really Crazy… And It Is Worse Than You Think

Authored by Michael Snyder via The Economic Collapse blog,

Inflation is making headlines all over the country, but the mainstream media is not being honest about the true severity of the crisis.  We are being told that the official rate of inflation is still in single digits, but what we aren’t being told is that the way inflation is calculated has changed dramatically over the years.  In fact, according to Forbes “the government has changed the way it calculates inflation more than 20 times” over the past 30 years.  The rate of inflation directly affects so many other things in our system, and the government would like to keep that number as low as possible.  So they tinkered and tinkered with the formula until they got it just where they wanted it.

But even with the highly modified formula that they are now using, the rate of inflation still rose at the fastest pace in almost 13 years last month…

The consumer price index, which represents a basket including food, energy, groceries, housing costs and sales across a spectrum of goods, rose 5% from a year earlier. Economists surveyed by Dow Jones had been expecting a gain of 4.7%.

The reading represented the biggest CPI gain since the 5.3% increase in August 2008, just before the financial crisis sent the U.S. spiraling into the worst recession since the Great Depression.

We all remember what happened in the months following August 2008.

Hopefully we will not have a repeat of that.

Of course the truth is that consumer prices are not just rising at a 5 percent rate in the United States right now.

According to John Williams of shadowstats.com, if the rate of inflation was still calculated the way that it was back in 1990, it would be above 8 percent right now.

And if the rate of inflation was still calculated the way that it was back in 1980, it would currently be sitting at about 13 percent.

But 5 percent inflation sure sounds a whole lot better than 13 percent, doesn’t it?

One thing that I am keeping a very close eye on is food inflation.  Earlier today, I came across a story from one CBS affiliate in which they used the term “sticker shock” to describe what consumers are now experiencing at the grocery store…

You may have noticed a significant jump in prices at the grocery store.

More and more grocery shoppers are experiencing sticker shock every day. The price of food — especially meat, fruit and vegetables — is going up.

If prices were increasing at just a 5 percent annual rate, that wouldn’t be a big deal.

Sadly, the reality is much worse than that, and that is especially true for meat prices.  According to one deli owner, the true rate of inflation for meat prices is “probably closer” to 20 or 30 percent…

Jeff Cohen, a deli owner and meat wholesaler, said those factors are making the price of meat out of control.

“They said on national news it’s 10 percent. But that’s not true. it’s probably closer 20, 30 percent,” Cohen said.

We will continue to get a lot of happy talk from the Biden administration and from the Federal Reserve, but this is becoming a real national crisis.

When CBS News interviewed one shopper in Maryland, she said that she is now spending about twice as much on groceries as she did before…

Abby Walter said she started noticing her grocery bill creeping up earlier this year. Prior to January, the Maryland resident had typically spent about $75 a week on groceries. Now her bill is averaging about $150 or even more.

I still remember when I could get an entire shopping cart of food for just 25 dollars.

Now if I can get an entire cart of food for less than 200 dollars, I consider that to be a monumental achievement.

I try really hard to take advantage of sales and make every dollar stretch as far as I can.  But these days some of the sale prices are higher than the old regular prices.

As global commodity prices have exploded higher in recent months, companies have been forced to pass those increases along to consumers, but they are attempting to use language that will not cause widespread alarm…

If you ask Pampers maker Procter & Gamble Co., it’s not raising prices, it’s “taking pricing.” Rival Unilever, known for Dove soap and Axe body spray, says it’s been “very active with pricing.” The prize for creativity — so far at least — has been home-improvement retailer Lowe’s Cos., whose finance chief told investors Wednesday that it was “elevating our pricing ecosystem.”

What in the world is a “pricing ecosystem”?

I would love to have a representative from Lowe’s define that for me.

Executives from General Mills are also using language that borders on the absurd

Then there’s cereal maker General Mills Inc., whose jargon includes arcane phrases like “strategic revenue management” and “holistic margin management,” which is not language you’d ever find on the back of a box of Lucky Charms. The company uses those terms so often, in fact, that its CEO now just refers to them by the acronyms SRM and HMM.

Why can’t they just say that they are “raising prices”?

These days, I cringe whenever I go down the cereal aisle.  It is hard for me to believe that cereal prices are so high now, but I know that they will eventually get a whole lot higher.

We have way too many dollars chasing way too few goods and services, and instead of taking emergency measures to get inflation under control our leaders seem intent on making things even worse.

The Biden administration wanted to spend 2 trillion dollars on infrastructure, but a group of U.S. Senators is currently working on a “compromise deal” that would only provide 1.2 trillion dollars in new infrastructure spending.

This is on top of the trillions upon trillions of dollars that we have already borrowed and spent during this crisis.

We can’t do this anymore.

It is complete and utter insanity.

But our politicians in Washington don’t seem to care.  They are going to continue to borrow and spend giant mountains of money that we do not have, and the Federal Reserve is going to continue to shovel enormous gobs of cash into the financial system.

So more inflation is on the way, and the standard of living for most Americans is going to continue to go down.

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hardscrabble farmer
hardscrabble farmer

We make a lot of kimchi for the farmer’s market but our cabbages aren’t ready so I bought 3 heads of Napa at the grocery store- $34

StackingStock
StackingStock

I started these self contained units outside a few weeks ago.

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flash
flash

…gonna’ be some expensive kimchi.

hardscrabble farmer
hardscrabble farmer

$15 a pint and no one says anything. Should keep raising the price until they do.

flash
flash

wow…Do you do sauerkraut too ? I’ve been giving that stuff away and pickled cucumbers, okra and peppers too. ..crazy me.

hardscrabble farmer
hardscrabble farmer

Every week. The fermented stuff, pickles and fire cider are big sellers this year. Who knew?

subwo
subwo

My mom used to make watermelon pickles. Good use of the rind. I have not seen them anywhere for years.

StackingStock
StackingStock

Pricing elasticity.

Ghost

My Amish friends are forever in your debt.

They’d been selling maple syrup for $5 a pint. I bought a gallon for $65, told them it saved me postage from New Hampshire and they changed their business model forever.

They are building a new home for their oldest son.

Quarts are now $18 and pints are $9 at the open market in their “village.” More of a farm settlement, but I personally think they should go 20 and 10 since they charge no tax.

I wouldn’t blink.

Mygirl....maybe

Wait, whut? You paid over eleven dollars for a head of cabbage!!??? Damn.

I’m enjoying the fruits of my friend who goes to the Food Bank once a week. We split what she gets and it’s interesting what all is in those boxes. Lots of overpriced items that didn’t sell because people can’t afford them go into those boxes. I have no idea why the store don’t do the clearance thing like they once did. The stores here give the Food Bank expired items and some are truly gone but she has chickens and goats and other critters that enjoy the largesse.
I have a stock pile that I add to as preps and I also share with people so nothing goes to waste.

hardscrabble farmer
hardscrabble farmer

I didn’t even look at the price when I picked them up. I almost never shop but we’re between crops and the kimchi is popular. My bad, but it was an eye opener for sure.

gmpatriot
gmpatriot

Paid $38 for 24 “wings” last wknd at local Pizza place. One time only, next “wings” will be from my farm raised Heritage birds when they are matured in a few weeks.

Stucky

“Paid $38 for 24 “wings” last wknd at local Pizza place.”

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Or, raw wings for $1.99 lb.

HF pays $11 for one head of cabbage … Aldi’s and Shop Rite selling them for under $1.50 – $2 a pound.

I think some of you are making up these outrageous fucken prices. Why?

=========

P.S. Pizza Hut gets their wings from the Wuhan Wet Market. Fact!

Ginger
Ginger

Man, you mean to say you have never heard of the Greta Thunberg Cabbage?
They are marketed under the Hunter Biden line of vegetables at better food markets.
Dr. Biden says “Six ounces of kimchi a day blows the bed bugs away”.

GNL
GNL

Is this a plank of the communist manifesto?

Steve
Steve

We’re being corralled into an economic holding pen right now. Just like barnyard animals. Hyperinflation decimates us financially. We become totally dependent on our servitude to big govt and even thank them for our servitude. MMT is dispensed until the obvious fatal conceit of that lunacy becomes too obvious. Then, the transition to digital accounts tied to biometric IDs and you are captured, forever a slave in a totalitarian nightmare. Slick.
Not 1 in a 1000 understands what’s happening.
Now is the last chance to buy the things you don’t want the govt to know you own because later that will be virtually impossible.

Ken31
Ken31

It seems most people do not have the capacity to handle the Big Lie, even if they have the intellect.

I decided to research The Big Lie to see if anyone had written on combating it. Indeed every establishment propaganda outlet has gatekeeping articles on it. That is at least the top 50 search results.

ASIG
ASIG

Print lots of dollars and then pass them out to people so they can stay home and produce nothing but continue to consume/use up what is available to create shortages.

So now we have inflation taking off and shortages everywhere. How TPTB could not see this would be the inevitable outcome is beyond me.

Idiots are in charge.

And So It Goes.

Austrian Peter

TPTB don’t care – it doesn’t affect them negatively – it’s a positive for them as their assets and income grow and match/over reach inflation – neat.

I remember the 1970s in UK. I started out in 1970 on £1,600 pa + car and benefits and ended the decade on £12,000 pa with a Jaguar V12 long wheel-base and director’s expense account. My shares didn’t do bad either – I have been on both sides of inflation.

Ken31
Ken31

The eye of the needle stuff is real wisdom that is infallible. I have always observed extreme wealth causing insanity. I now ponder if that has to do with their distance from God being the mechanism of their insanity. These people can not even recognize love.

Austrian Peter

Oh Yes, Ken 31 – they are far removed from God and are lost souls. Google: “The saying Whom the gods would destroy they first make mad, sometimes given in Latin as Quos Deus vult perdere, prius dementat (literally: Those whom God wishes to destroy, he first deprives of reason) or Quem Iuppiter vult perdere, dementat prius (literally: Those whom Jupiter wishes to destroy, he first deprives of …”

https://en.wikipedia.org/wiki/Whom_the_gods_would_destroy

Ken31
Ken31

It tells us all we need to know about another Big Lie that they keep allowing dependent immigration.

lamont cranston
lamont cranston

When Lowe’s had its HQ in North Wilkesboro (where Jim Lowe founded it), you would not have heard anything like that crapola. Must be that Lake Norman lifestyle north of Charlotte, where you’d think you are in a Noo Yawk suburb from the accents at the local Food Dawg, er, Lion.

Ken31
Ken31

That’s a shame. Charlotte used to be a nice place as much for its people as for its aesthetics.

Ginger
Ginger

Charlotte NC has not been a nice place since the Naval Yard was closed.

https://www.ncpedia.org/charlotte-navy-yard

Austrian Peter

This is not about ‘money printing’. This particular inflation is about cost-push inflation due to supply-chain disruptions. QE only causes inflation mainly in asset prices – not commodities. Doctor copper leads the field.

Direct money printing only causes inflation if wages are rising, which they are not although they might have to, when fewer people chose to go back to work and shortages of labour thus arise.

Ken31
Ken31

I wonder how Black Rock paying “cash” the Fed is printing for them affects money supply in the real economy.

Anonymous
Anonymous

They spend it on real estate, which they then rent out to section 8 government subsidized tenants. Nice scam for the insiders.

Austrian Peter

Good point Ken 31 – IMHO it does have an effect but it’s not that great, the real money is QE.

Anonymous
Anonymous

“Enhanced” unemployment checks, stimulus checks, States giving out money, etc…all lead to people having free money to waste. Once this stops, and the rent, mortgage, and student loan moratoriums end, demand will drop like a rock. Sure, people at the top got richer, they always do, but most people will be much worse off than before the free money started flowing.

Rusty Pipes
Rusty Pipes

Sorry about the anon, CCleaner gets me every time…

Crawfisher
Crawfisher

That’s the variable no one is talking about , when the CDC lifts the moratorium on rent and mortgage. My bet is not in the next three years cause Biden will look worse than Hoover as a President.

Better stay out of urban centers and know your neighbors, we ain’t seen real violence until that happens.

Austrian Peter

Yes Anon, agreed, so it is as they say – a temporary inflation in which the coming depression will result in deflation?

Rusty Pipes
Rusty Pipes

Engineered shortages lead to price spikes, of course. OPEC, the criminal conspiracy, showed the way after the ’73 war. The U.S. should have obliterated the Saudis instead of kissing their ass.

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