The CPI or consumer price index is used by the government as a benchmark for everything from social security payments to the value of treasury inflation bonds. Government workers are sent out monthly to collect prices from many locations in various cities to determine the cost of goods, products and services. They feed that information into a data base in Washington where statisticians compile the monthly CPI.
Although these methods are standard price-gathering for many countries around the world, what more educated folks really see is a government campaign to hide inflation of 10 percent or more. Anyone who grocery shops today relative to 5 years ago knows immediately that inflation has come if not hyper- inflation. So why are we lied to by our government and why does the Fed Chairman prevaricate the real issue? Do they think we simply are not sophisticated enough to know the facts right in front of us.......that coffee, candy bars, meat, sugar and many other household staples have nearly doubled? And what about healthcare? That's the understatement of the decade! While wages remain stagnant, one dollar today can't even get you a candy bar. It is suspect of course that the government purposely keeps the CPI low as to give very moderate COLA increases, if any at all. In fact a low CPI is conducive for the government because it saves money on COLA for social security, union contracts and inflation adjusted bonds that are benchmarked by the CPI.
John Williams who runs the website www.shadowstats.com has an alternate, more realistic measure of inflation. He places it at about 10 percent for 12 months compared to roughly 2.7 percent from the government CPI. He states the economy is nearing hyper-inflation. The real inflation rate is somewhere around 2 percent below the prime rate, roughly 7 percent. One can not imagine that the Fed can continue to print money to a tune of 1 Trillion a month to buy bonds (aka Quantitative Easing) while maintaining the value of the dollar. I frankly see an engineered crisis (and who doesn't) leading to a methodical plan to systematically destroy the dollar....the world's currency. Is it any wonder why we keep raising the debt ceiling? Because more money can be printed. But this is just an illusion because it appears out of thin air like magic from a printing press. Fiat money has no intrinsic value because their is nothing to back it up but an endless imagination of speculation. This in turn leads to runaway inflation. A US bank note, if printed today, would be backed by a gold standard giving it intrinsic value thereby increasing its value. With Fed notes, money is worthless because it has lost it's value giving it the term fiat money.
It's as good as toilet paper......all you need now is a marble toilet for your golden turds that smell like lilacs. Isn't your butt hole valuable enough to wipe with a Ben Franklin?