< img src ="http://theeconomiccollapseblog.com/wp-content/uploads/2022/02/Inflation-2022-Pixabay-560x373.jpg" alt= ""width=" 560 "height= "373"/ > I warned you that inflation was going to get worse. On Thursday, we learned that the consumer price index was 7.5 percent higher in January than it was a year back. We are being told that this was the highest reading given that February 1982, and that sounds really bad. But it isn’t precisely honest, since the truth is that the way the inflation rate is calculated has actually been altered more than 2 dozen times given that 1980. So if we are going to compare the rate of inflation today to historic numbers, we should really be doing an apples to apples contrast.
Thankfully, there is someone out there that looks after the mathematics for us. According to John Williams of shadowstats.com, if inflation was still computed the way that it was back in 1990, the main rate of inflation would be above 10 percent right now. And if inflation was still computed the manner in which it was back in 1980, the official rate of inflation would be above 15 percent right now.
Simply put, utilizing the same method that the government used in 1980 would provide us a main rate of inflation that is more than double the official number that we have actually just been given.
Wow.
Lots of have actually compared the current crisis to the Jimmy Carter period, however the reality is that we are now going beyond anything that we witnessed at that time.
On her Twitter account, Washington Post columnist Heather Long shared some particular numbers from the inflation report which show where American consumers are being struck the hardest …
Used vehicles 40.5% y/y
Gas 40%
Rental vehicles 29%
Utility gas 24%
Hotels 21%
Furniture 20%
Bacon 18%
Steak 17%
Peanut Butter 15.5%
Pork 14.5%
Fish 13%
Eggs 13%
Brand-new automobiles 12%
Electric 11%
Chicken 10%
Oranges 10%
I am especially concerned about the rise in energy rates.
According to the Labor Department, energy costs total are up a massive 27 percent over the previous year …
The Labor Department reported that gas rates have actually increased 40% over the previous year, while natural gas has actually risen 22.6% and electricity is up 10.7%. A gallon of gas, typically, cost $3.47 across the country Thursday, according to AAA, up from $2.47 a year ago. In California, gas prices are well over $4 per gallon.
In all, energy rates have climbed more than 27% over the course of the past 12 months.
A great deal of individuals expect that this brand-new energy crisis will simply be “temporary” much like the energy crisis of the 1970s was.
However this time is really various.
As I have gone over formerly, quickly available energy reserves are steadily being diminished, which suggests that we are going to end up being progressively depending on energy reserves that are more pricey to extract.
In addition, major financial institutions have actually ended up being incredibly reluctant to money jobs that have anything to do with traditional forms of energy. They don’t want to be viewed as “contributing to worldwide warming”, and so they are focusing on moneying alternative energy projects instead.
However alternative energy sources are not producing enough to keep up with global demand.
So we are now facing a significant crunch, and it isn’t going to disappear.
In reality, it is just going to get even worse.
On Thursday, Joe Biden guaranteed to “work like the devil to bring gas costs down”.
Truly?
Exactly how does he prepare to do that?
He currently bought a huge release from the Strategic Petroleum Reserve back in November, which didn’t work.
And that was really a really stupid thing to do, because we are going to need those reserves at some point.
The cost of food continues to rise very strongly as well. According to CNBC, one way that Americans can handle this is by consuming less meat and less dairy …
Meat and dairy tend to be the more expensive items at the supermarket, and especially of late. In action, goal to make more meals that don’t rely on them as the main component, Brown said.
“Using meat sparingly as taste, like adding a bit of bacon to a mushroom risotto, is more affordable,” she said. Consuming less meat likewise helps you to decrease your environmental footprint, she included.
The elite actually don’t want us to eat much meat anyway, therefore this would exercise very well for them.
Obviously Biden realizes that regular Americans are ending up being increasingly annoyed, however he is assuring us that “we will make it through this obstacle”…
“On greater costs, we have been using every tool at our disposal, and while today is a reminder that Americans’ spending plans are being extended in manner ins which create real stress at the kitchen table, there are likewise signs that we will make it through this obstacle,” Biden said in a statement responding to the report.
Unfortunately for Biden, the American individuals are progressively losing faith in his leadership.
In truth, CNN just reported on some new approval numbers that are definitely depressing…
“Nearly 6 in 10 Americans how Joe Biden is handling his presidency, with most of that group saying there’s actually nothing Biden has actually done since taking workplace that they approve of,” CNN detailed.
The current survey, taken January 10-February 6, 2022, shows 58 percent disapproving of Biden’s job performance, compared to 41 percent who authorize. That shows a seven-point boost in the number who disapproved from the last survey, taken in December 2021.
So where do we go from here?
Well, lots of are anticipating that the Federal Reserve will quickly be substantially raising rates of interest…
The possibilities of a 0.5 percentage point Fed rate boost in March rose to 44.3% following the data release, compared with 25% just before, according to CME information. Chances of a 6th quarter-percentage point trek this year increased to about 63%, compared to about 53% prior to the release.
“With another surprise jump in inflation in January, markets continue to be worried about an aggressive Fed,” stated Barry Gilbert, property allowance strategist at LPL Financial. “While things may start improving from here, market anxiety about possible Fed overtightening will not disappear till there are clear signs inflation is coming under control.”
When I saw the term “overtightening”, I simply had to laugh.
The Fed has had interest rates pressed to the flooring for more than a decade, and somebody actually has the gall to recommend that the Fed could soon be engaged in “overtightening”?
When the Fed pressed rate of interest into the stratosphere in the early 1980s, that was overtightening.
Any rate walkings that we see in 2022 will be incredibly modest by contrast.
However without a doubt, any rate walkings at all will be painful for the financial markets. Low interest rates helped to fuel the absurd bubble that we are in today, and lots of investors could analyze greater rates as a sign that the party is finally ready to come to an end.
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