‘6% US inflation is coming!’

Posted in Bank Cartel Go To ****, Journalistic Integrity, Prosperity, Satire, Satire Bureau, US economy by Dan Alba on August 14, 2008

Hooray!

By Admin ∙ Satire Bureau ∙ August 12, 2008

New York and Toronto (Satire Bureau) August 11, 2008- Inflation in the US could hit 6 per cent by the fall, CIBC World Markets’ chief economist said recently.

“You’ve got to go back to 1982, in the midst of the stagflation that followed the second OPEC oil shock, to see the last time American inflation was clocked at that kind of pace for any sustained period,” warned Jeff Rubin of the large Toronto-based investment bank.

The reaction was swift.

“Hot diggity dog!” whooped Macy’s shopper Jean Byer upon hearing the good news. “I can’t wait ‘till the new lower prices take effect!”

“Just 6 percent?” questioned Sears tool shopper, Charles “Chuck” Key. “It’s about time stuff got cheaper!”

The reaction was also unexpected.

“No, no, no,” a spokeswoman for CIBC countered. “Our chief economist meant that 6% is too high; it’s a bad thing, not something to get happy about.”

Just try telling that to baker, P. G. “Pop” Ovver, proprietor of Dough, Re, Mi, in Rye, NY. For his business, the price of a 50-pound bag of flour has gone from $8 to $29, seeds used in multigrain bread now cost $150 a bag instead of $50, and a wholesale carton of eggs that once went for 70 cents now cost $1.50.

“Hmm,” mused Satire Bureau economist Dr. G. D. Peay, “On my calculator, the inflation on those prices is between 100% and nearly 400%. Where does this Rubin guy come up with a measly 6%?”

Then there are gasoline prices. A gallon of regular is up some 26% since January 1 of this year. If a motorist had bought that gallon on a trip to the station at halftime of his favorite bowl game, he would have paid $3.07. Multiplying that seemingly low price times CIBC’s dubious 6%, he would be forking out a meager $3.25 today rather than nearly four bucks in many states. Thus, most drivers would be drooling for such a bargain inflation rate.

So, which is it, Hallelujah or Stick It To Ya’?

As usual, it’s the latter. Perhaps a little history will help explain why . The Consumer Price Index (CPI) began in some earnest during World War I as a way of setting wage increases for World War I shipbuilders. However, the CPI did not come into broad use and use until after World War II when it was utilized in auto union contracts as a cost-of-living adjustment for wages. Originally, it was pretty simple; a fixed ‘basket’ of goods was chosen. It represented what most people were likely to purchase, like apples, cheese, aspirin, etc. After a base month was established, the government bean counters (Editor’s note: this is a contemptuous term for government functionaries only; it is not intended to mean that said gaseous legumes were part of said ‘basket’, although they probably were. Moreover, the word “gaseous” refers to the beans, not the butane bluster put out by the bean counters themselves) checked the price of those items in subsequent months to see if they went up or down.

By the 1990’s, CPI was being relied upon by vast segments of the commercial world but primarily by politicians as a propaganda tool. Lower inflation could be grandstanded by the President in power and the reigning Federal Reserve Chief as proof that their respective policies were ever-so exaltedly elysian in essence; in other words, they discovered how to rig the data.

Hence, became .

There were two primary pocket-picking price pettifoggers perpetuating the pilferage, one very well known and the other not so famous. Both men, it is believed, had broader objectives than just fudging the numbers – they also knew that Social Security was hopelessly underwater. Thus, they made sure that CPI would be continually low-balled, a feat which in turn screws beneficiaries. Their names are Alan Greenspan and Michael Boskin.

The latter is an economist and a Senior, as opposed to a Jolly Good, Fellow at Stanford.

“When those two got done meddling,” sighed Dr. Peay, “CPI no longer meant Consumer Price Index, but something more like ‘Con-artists Purloining Individuals’. Out went simple measurements and in came substitution hedonics and other wizardry. For example, the venal vacillators kept the CPI low by assuming that consumers would switch from steak to chicken if the price of the red meat got too high. Soon, moreover, it was decided that food and energy should be omitted entirely because their prices are too volatile. It’s all utterly bogus.”

Eliminating from the inflation data what we eat and put in our cars is, to put it mildly, suspicious. What else could they be manipulating?

“You want the short answer?” responded Dr. Peay. “Everything. That’s because they would have you believe that inflation is generated by greedy businesses and employees who ask for raises, when in fact, it is the Fed and Congress that are the culprits. Since we went off the discipline of the gold standard, Congress can spend as much as it likes and the Fed can print as much money as it wants – and boy do they! It’s those mountains of new dollars chasing a lesser amount of goods and services that are the real root cause of inflation.”

But what, then, about private economists like Mr. Rubin? How do he and his ilk get snookered into swallowing the kool-aid? (Editor’s note: That’s “ilk”, not “elk”, even though the antlered beasts are plentiful in the CIBC economist’s home country).

“Simple,” the Bureau’s man explained, “They just piggyback on the government’s numbers and add a dash or two to make it look like they are being independent. That’s because behind every brokerage firm’s economist/spokesperson is an army of commission driven salesmen. The numbers guy knows that customers who are scared don’t buy what the salesmen are pitching; thus, the goal is to keep the flock thinking that things are a little out of kilter, but not too bad. Back to a fruit metaphor, they have merely rewritten an old adage.

“What was once “An apple a day keeps the doctor away” is now “A a day keeps the sellers at bay.”