It's Too Bad The Government Is So Politicized That It Lies To Us

SEE HERE An issue of Whistleblower magazine (Vol. 20 #1) came the other day in the mail with the provocative headline on the cover: Inflation Nation. I've been worried about a major rise in the inflation rate for some time with the irresponsible spending the government has been doing. This didn't do anything to relax me.

Can we count on the new Republican majority? GOOD QUESTION

I've been wondering about all the talk that we have to increase these irresponsible spending programs to avoid deflation. All the time this talk is going on the price I pay for groceries keeps going up. A pound of bacon gets more expensive. Finding a good price for Coca Cola take a longer wait and the sale price is more than I was willing to pay a year ago. Gas if back over $3 at the pump with no expectation of going down. Where I come from that is called inflation. In general there is only one cause for inflation and that is government floating unbacked credit. Now that's general inflation, not rises in isolated products and services which can be caused by supply and demand issues. One of the problems seems to be that the folks tasked with reporting on inflation are changing the rules to make it look like no inflation is taking place. They seem to be fudging the data. I'm tempted to start my own inflation index and call it something like the kitchen index.

One of the many functions of government is preserving the economy by stabilizing the value of money not inflating it all the time. A sobering analysis titled "Crashing the Dollar" by Craig R. Smith and Lowell Ponte provided this interesting bit of analysis:

"... To buy the average $10,250 house in 1954 cost, in gold worth $35 to the ounce, 293 ounces of gold or 2.6 years of income.
In 2009 the average new $210,000 home case 221 ounces of gold or 4.7 years of income.
In other words in 2009 it took 80% more years of labor to buy a house.
But it took 25 percent less gold, because gold by 2009 had risen to $950 per ounce. ..."

Let's just stop there. We're used to being told that things are getting better, but it's a lie. Things really were cheaper and better in the past. The value of labor has been falling, partly due to the strategy of getting the women into the workforce which drives down the price of labor. When the supply increase the price goes down. Did we get a higher quality of life for this? Only if you think two folks working for to make up for that 2.6 to 4.7 person years of cost is an improvement.

Government isn't telling us the whole story. They're cooking the books to make things look better than they really are. I remember the brouhaha about Eisenhower lying about the Gary Powers U-2 incident (of course that was just another case of the liberals trying to score political points) so why isn't this cooking of the books a scandal? We're in no danger of deflation. It's all in the fevered imagination of the book-cookers and gives them an excuse to ramp up the deficit and spend, spend, spend. The big risk we face is likely to be runaway inflation. We'll see!