The Beat Goes On

August 6, 2008 at 9:50 pm (Food, Inflation)

Inflation over the last 200 years in the US

Want to know something interesting? There was, except in brief times of great duress such as a (declared) war, no inflation in the US dollar until the Federal Reserve came along. You could save a dollar and it would have as much purchasing power to your great, great, great grandchildren as it had to you.  Since the Federal Reserve was established, the value of the dollar has fallen between 96% and 98%. In fact, the rampant devaluation is the main reason no one in this country saves, whether they know it or not. This article outlines some of these themes.

How ironic that the institution causing this problem, the Fed, continues to be in charge of how to fix it.  In fact, the catastrophic failure of the monetary policies in the last 90 years is going to result in even more power of the Federal Reserve, because people don’t understand what’s causing things to go awry.  As time goes by, people will clamor for more regulation, more stimulus packages.  “Wall Street” will get blamed.  Greedy investors will get blamed.  The Bush administration will get blamed.  Everyone except the one organization that controls the entire money supply by setting the value of a dollar — the Federal Reserve.  Not only will they not get blamed, they’ll get praised.

I must stop dwelling on the Federal Reserve; the powers that created it are the same powers that raise and level governments — it’s a waste of time to get upset at them.  So, instead, I guess I’ll get upset at people who steadfastly believe the government’s economic numbers, as if they are the last bastion of truth and accuracy.  After all, 2+2=4 no matter what, right?  Even though these same people believe the government lies about Iraq, lies about WMDs, lies about everything under the sun — and these people distrust corporations and religions and global warming and what have you — somehow they believe the official economic numbers.  And they should know enough to realize a fiat currency is based completely on faith.  In fact, there is very little difference between a religion and a fiat money system.

Well, some mainstream publications, such as this article, hint at how common misleading data is published by the government, although it’s just a hint.  For a full dose of reality, try Shadow Stats.  How else can global food prices have increased by 40% in 2007, according to the UN, but food inflation was only 5% here, according to our government’s official figures?  Oh, it’s because we don’t import much food, right?  Wrong.  It’s because our dollar has increased, then, perhaps?  No.  It’s because we live in a magical fairyland whether food pops out of the ether into our plates, I suppose.  Or maybe the government is lying.  Do you have a receipt from August of 2007 from the grocery store to compare?  Betcha it’s 40% lower.  In fact, you don’t even need to check.  You know it’s true.  Along with 5% food price increases, we only have 5.7% unemployment and 2.6% core inflation.  Whew.  That’s a relief.

Today’s article of doom: far larger wave of home defaults building.



  1. Anna said,

    Yes. Everything I buy has risen 40 percent or more, depending on the item. The $1 loaf of French bread at one store has risen to $1.50. The $1 bottle of lemon juice is now $1.49 or more. I notice these things. I live on Social Security. But if they say the cost of living has only risen 5%, then they only have to increase SS by 5% for cost of living adjustment.

    Endlessly clever, these government folks, as you have so well pointed out.

  2. CrashingDownNow said,

    Sorry your comment took so long to appear! I am not used to receiving comments, as few people read this blog. Thanks for your input.

  3. sam222 said,

    I am glad to see that at least a few people know the truth about the fed. Nice article.I liked it….
    I wrote an article, The Case For Gold… maybe you will find intersting.

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