Inflation

By John Packard

Between the gas pump and the grocery checkout, Americans have plenty of reasons to list inflation as Economic Enemy No. 1. Is inflation really that bad?

The government has been very effective in manipulationg the numbers. They have an incentive to do so. If inflation is kept artificially low, there is less of a strain on government subsidy payments to the masses. In other words, social security cost of living increases are much smaller and more acceptable. Why would they every want to pay a cost of living adjustment of 11% when according to their numbers, they would only need to pay 2 or 3%. Is it robbery, yest it is. This is what we get for permitting a paper currency backed up by nothing but a promise. (Remember that the government has another 50+trillion on unfunded govenment entitlements which are unfunded.)

Some statisticians have offered some sort of weird consolation suggesting that (adjusted for inflation) gasoline is not as expensive as it was in the early eighties. Isn’t that nice…The real problem is that this country does not have an energy policy. We have been restricted by getting access to other resources.

The officials argue that many costs have stagnated or have gone down. I would argue that these types of expenses are not as significant as trasportation and food which are critical.

Many companies are still hung up with the typical 2 to 3% pay wage increase policy. For most people in the middle or lower rungs of the economic ladder have not increased with inflation for years now. The folks at the top on the other hand have seen just the oppostite. I am not abdocating socialization by the way.

A recent CNN/Opinion Research poll cited inflation as the biggest economic concern to adults. 47% rathed this as the number one issue. None of the other concerns, from mortgages to unemployment, scored even half that high.

The federal reserve constantly tells us that inflation fighting is a primary concern. Really? Why are they lowering interest rates the? The fed has gotten itself into a hardplace. A liberal monetary policy for over a decade has created a phenominal easy money credit bubble which is deflating rapidly. The economy, the theory goes can not possibly go into a recession, there is to much debt to pay off. So, despite the rhetoric, the fed would rather inflate than see a recession. Problem is, this is a short term fix and will simply forstall a recession. Longer term they are making the immenent recession far deeper. Ask Warren Buffett. He would concur.

What to do? Invest in your debt. It will be the best investment to make. Then write all of your states congressmen and tell them to stop printing and spending money!