Marc Cuniberti .
Although my poll was anything but official and only picked up around 125 participants, and all were local, here are the results: A Money Matters reader wrote in some weeks ago suggesting I, and many like me who write public articles touting the evils of inflation, were part of the reason people think there is inflation.
He also pointed to the Consumer Price Index figure put out by the Bureau of Labor Statistics (BLS) and that the latest figures showed a recent inflation figure of right around 3%. I had called the inflation in our country “raging”.
Not only did he say I was grossly exaggerating, but he was also part of the problem by writing such things and stoking the mental fire sort of speak.
I gave some serious thought to both his concerns and replied that I didn’t think an article or two (or even three) could convince people there existed an economic inflation problem if it wasn’t there.
I also addressed the second part of his comments about the 3% BLS figure being “far from raging inflation” by referring him to a website called Shadowstats.com. It is run by a gentleman named John Williams who I interviewed about 12 years ago on my radio show, Money Matters.
Williams’s webpage centers around the idea that the inflation metrics used by the government have been altered many times over the decades, starting around the Lyndon Johnson years. The BLS has tweaked the way they measure inflation. You can find these adjustments and their dates implemented here (https://www.bls.gov/cpi/additional-resources/historical-changes.htm)
The reason why they do it and what effect it has had on the resulting statistics is highly debated. The BLS claims each adjustment is to get a more accurate picture of inflation. Others argue (and I am in this camp) that if one is going to measure the change in prices (inflation), the same measuring stick should be used.
Makes sense to me.
Anyway, I have covered some of the ways the BLS calculates inflation and some of the ways they have changed it in previous articles. Needless to say, some of the methods seem counterintuitive if one is trying to get accurate measurements over time.
For instance, the BLS uses a metric called the substitution effect. This wonderful little metric assumes for example, if steak rises in price, people change to buying hot dogs so they substitute the price of hot dogs where they originally used the price of steak. A simplistic but accurate example of some of their questionable methods. But trust me, there are many more.
Anyway, Shadowstats.com calculates inflation based on the idea that using the same metrics used decades ago gives a more accurate snapshot of how prices have increased over time without the “enhancements”.
The argument here is if inflation looks better, whatever administration in power will look better come election time.
And I am not singling out any one administration or party. They have all done it. My point is that the figures the BLS gives us woefully underestimate inflation, yet the BLS numbers are what many people clue in on.
That said, wanting to find out if my articles and the many others like mine can convince people there is higher inflation than what is stated by the recent BLS figures, I ran a poll on social media asking if people thought inflation was non-existent, mild, moderate or high, and whether they what they read or what they saw when actually going shopping
About 99% said inflation was real.
About 6% said inflation was real but slowing down.
About 5% said inflation was caused by greedy corporations.
About 95% said they see inflation because they actually shop.
About 85% said inflation was either bad, ridiculous, high, or terrible, or used similar words to describe it.
No one answered the question that they believed inflation was real because of what they’re being told by media although about 8% referenced the BLS figure of 3% and that they believed that.
Considerations would be that my poll was just on social media, only included local pages, and therefore probably only local people and very small in sample size compared to national polls.
But the results are about what I expected.
In conclusion, inflation is a result of the many administrations of both parties for the last 40 years printing money like crazy for the many entitlement programs and social safety nets lavished on the American people. Many of these programs are good programs and sorely needed. But too much spending and you get inflation.
And that’s what we have. Raging was the word I used but although no one used that particular word, the words they did use were very similar.
Inflation is bad and it isn’t because news reporters like me tell you so. People know it because they feel it in their wallets every time they go shopping.
And now I don’t feel so guilty.
“Watching the markets so you don’t have to”
This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services. Email: [email protected] thought that because of
