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The Lie About Inflation

We keep hearing that the inflation is 7% or there abouts, while we all know that that number is utterly false.
The spinsters deceive the public by comparing selectively price indexes and only report changes compared to the previous year. 
So, when you hear "7%", the information means a number between now and the same date in the previous year, although numbers always lag at least one month.

When dissecting the true numbers of inflation, the picture is drastically different from the stories you are being told. Surely you have been thinking that there must be something you don't understand when feeling the weight on your pocketbook vs. the numbers you are being told. During the podcast, Gianni and David discuss how Consumer Price Index (CPI) numbers, or better known as inflation, are calculated and established. It is quite a complex process and therefore the reports and calculations are easily manipulated so that they may be "technically" correct but practically shamelesly deceitful.


The Truth is, that the inflation rates compare (app.) as follow:

Year over Year

2020 vs 2019 = + 14%

2021 vs. 2020 = + 37%

2021 vs 2022 = + 43%


2022 vs 2020 = + 96%

2022 vs 2019 = + 123%


Let's peel the onion and understand how the sausage is made:

The DNA of the Consumer Price Index, in short "CPI"

For many years, political parties and governments have used CPI percentages to brag about how well they govern. Obviously, these numbers are manipulated as part of the political spinning machines. Both sides of the aisle are culpable of “misleading” the public with data that makes them look good. CPI percentages are easy to spin, because very few people understand the complexity and relative value of CPI numbers. The media propagates the number they are served by the Bureau of Labor Statistics without challenging the data, the data source, and without an autopsy of the relativity of the data. Aside from the political rhetoric anchoring on the CPI, the indexes drive U.S. monetary policies, world exchange rates between countries and most importantly, people’s perception of the state of the economy, which ultimately form the basis for almost all personal and corporate economic decisions.


During the Podcast. Gianni and David do just that, dissect and reveal the truth behind the CPI myth.


Who tracks and provides the data

U.S. Bureau of Labor Statistics (BLS)

Who/What is the U.S. Bureau of Labor Statistics


Head of the BLS is a commissioner who is nominated by the President and confirmed by the U.S. Senate.

He/She serves a 4-year term. The current commissioner is Dr. William Beach, an economist, who was confirmed by the U.S. Senate on March 18, 2019.

The BLS is headquartered in Washington DC, and has a staff of 2,400, half of which are economists and statisticians, and almost 1,000 employee work in BLS' 8 regional offices, located in:

1 San Francisco,

2 Dallas,

3 Kansas City,

4 Chicago,

5 Atlanta,

6 Philadelphia,

7 New York, and

8 Boston.


What is the Consumer Price Index (CPI)

The CPI is a measure of the average change in prices paid overtime by urban consumers, for a market basket of consumer goods and services. The CPI provided by the Government and repeated by the media is grossly inaccurate and lags behind real time data.


Who and where are these “urban consumers” and …

How is the market basket determined and tracked

The CPI market basket is developed from detailed expenditure information provided by families and individuals on what they actually bought. There is a time lag between the expenditure survey and its use in the CPI.


For example, CPI data in 2020 and 2021 was based on data collected from the Consumer Expenditure Surveys for 2017 and 2018. Each quarter in each of those years, about 24,000 consumers from around the country provided information in an interview survey on “what they remembered” their spending habits were during the respective quarter.


To collect information on frequently purchased items, such as food and personal care products, another 12,000 consumers in each of these years kept diaries listing everything they bought during a 2-week period. Over the 2-year period, then, expenditure information came from approximately 24,000 weekly diaries and 48,000 quarterly interviews used to determine the importance, or weight, of the item categories in the CPI index structure.


Yeah, right ... You would have to believe that all these families kept track and consistently recorded the survey data and that the personnel of the Bureau of Statistics actually properly recorded the data.


What data is available and tracked

Data is acquired and tracked from four Census regions and nine Census divisions:

1-Northeast region (2 Divisions):

Division 1 - New England:

Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont

Division 2 – Middle Atlantic:

New Jersey, New York, and Pennsylvania


2-Midwest region (2 Divisions):

Division 3 – East North Central:

Indiana, Michigan, Illinois, Ohio, and Wisconsin

Division 4 – West North Central:

Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota

3-Southern region (3 Divisions):

Division 5 – South Atlantic:

Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia,

Division 6 – East South Central:

Alabama, Kentucky, Mississippi, and Tennessee

Division 7 – West South Central:

Arkansas, Louisiana, Oklahoma, and Texas

4-Western region (2 Divisions):

Division 8 – Mountain:

Arizona, Colorado, Idaho, New Mexico, Montana, Utah, Nevada, and Wyoming

Division 9 – Pacific:

Alaska, California, Hawaii, Oregon, and Washington

two size of city classes,

eight cross-classifications of regions and size-classes, and for

·23 local areas.


What are the components of the CPI

Indexes are available for two population groups:

· CPI for All Urban Consumers (CPI-U) which covers approximately 93% of the total population and

· CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 29% of the population.


Some series, such as the "U.S. City Average All Items Index", go back as early as 1913. Indexes are available for 200 categories, arranged into 8 major groups (components); each component is assigned a relative value (size) which is intended to result in a weighted relevance to the overall CPI.


The Consumer Price Index Components are:

1 Food and Beverages -- 14. 259%

2 Housing -- 42. 363%

3 Apparel -- 2.4 58%

4 Transportation -- 18. 182%

5 Medical Care -- 8. 487%

6 Recreation -- 5. 108%

7 Education and Communications -- 6. 406%

8 Other Goods and Services) -- 2. 737%


What is the frequency of input updates

Monthly indexes are available for the four Census regions, and some local areas.

The Discussion (during the Podcast):

  1. The inflation rate reflects an increase in consumer prices compared to the prior year (2022 vs 2021). The price increases started almost immediately beginning with the change of administration in January of 2020. Even if we were to believe a 7% inflation, as widely propagated, that number only reflects the increase in consumer prices between 2021 and 2022 (November). If you roll back to a comparison to prices in 2020, the actual inflation rate is closer to 15%, even though this number does not reflect the real number either.

  2. There is NO such thing as a national Consumer Price Index i.e., inflation rate.

  3. There are obviously significant differences in prices i.e., cost of living among the different regions, and within each region there are even more differences among the different urban and rural areas (example Northeast Region pricing in Maine vs. New York).

  4. Many CPI categories are intertwined as cost is significantly impacted by cross components. "Ttransportation” affects most components but are relative to the proximity of the source materials. For example, if the manufacturing facility of meat is in Colorado, transportation cost of meats to Colorado distribution centers are significantly less than meat transported to Florida. The same is true for any and all materials shipped throughout the nation.

  5. The dramatic cost increase of fuel and gas beginning in 2020 is clearly one of the main causes for the high inflation. Manufacturers and distributors of ALL goods have to adjust their pricing to include the significantly increased transportation and logistics cost, some of which have doubled and tripled over the past 20 months.

  6. Another, almost equally relevant factor, is the reduction in labor force, which is due to the massive subsidies paid by our government to people who simply do not want to work. Aside from the fact that like they low-ball the inflation rate, the government is disingenuous when they state that our unemployment rate is close to 3.5%, which under normal circumstances would be considered to be very low, the almost 10 million people who used to be in the labor force but choose to stay home and receive healthy government checks, is excluded from the count. So, the actual unemployment rate would be closer to 8% if the non-working bums would be counted as part of the labor force.

  7. So how is it that inflation and employment numbers used by the government and media alike are so far from the truth? While the BLS claims non-partisanship, obviously, the 2,400 employees do have political allegiances, and like is the case with most government agencies, the tendencies are usually leaning mostly left.

  8. No matter what the BLS and the media tells the American public, the TRUTH is that the published numbers are very far from the truth.

  9. Pundits coming on TV and stating wherever there is a camera that our “economy is in great shape” are clearly truth-challenged. The truth is that the entire industrial players, manufacturers, whole salers, retailers have jumped on the gravy train under the excuse of inflation, of course they call it “supply chain challenges”, and increased the cost of all goods and services. The drama lies in the fact that the cost increases are exponential as the cost of handling, overhead, transportation carrying (interest), and margins are calculated as a percentage of the cost of goods. So, if a product supply chain consists of 4 steps i.e., “middlemen” (manufacturer >> whole saler >> distribution center>> retailer >> Consumer), than each operating entity increases pricing accordingly. (See following page). In that example, for example the manufacturers Overhead (OH) increases from $2.60 in 2019 to $3.84 in 2022, and Profit Margins increase from $4.68 in 2019 to $6.91 in 2022. In the case of the retailer, OH increases from $12.08 in 2019 to $26.93 in 2022, and Profit Margin increases from $18.52 to $41.30, maintaining the same percentages but without any additional work or effort on the part of the manufacturer or retailer. It’s all in the percentages. Obviously, who suffers is the end user who now has to pay $35 for short ribs when the same short ribs cost only $16.

  10. An additional trick played on the consumers is the “shrinkage”. Not only is the consumer charged more for goods, but the quantity of goods is reduced creating a “double whammy” for the end user.

Price - Cost of Goods Evolution 2019 - 2022

For the same goods you paid $10 in 2019, you paid

$11.36 in 2020= + 14%

$15.56 in 2021 = + 56%

$22.30 in 2022 =  + 123%

CPI Price Evolution 2019-2022

Listen in to our weekly Podcast if you want the TRUTHS 

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