Sunday, March 16, 2008

The REAL Inflation Picture

Bill Clinton, "Friend of the Downtrodden," made a significant change in CPI (inflation) statistics when he was Bubba-in-Chief.

The reason?

To reduce future Social Security liability. Social Security payments escalate in lockstep with official CPI numbers, and reducing CPI means reducing SS payments.

Voila!! Less deficits!!!

But as the chart above shows, the consequences of his canoodling (of CPI, not Monica) are still with us--and are still presenting a Pollyanna-view.

THIS has even more consequences: primarily, the Fed's down-mashing of the Fed Funds rate--which makes the USD even more worthless in global markets--which makes the cost of petroleum go UP (just like gold, copper, steel, and food commodities.)

We acknowledge that GWB has been perfectly content with the CPI fairy tale, too--as is Congress, which can either take a "What?!?!" position--or a "We'll Fix It?!?!" position.

Frankly, a Congressional "fix" is almost more scary than the actual inflation rate.
HT: The Big Picture

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