TXRogers wrote: Cruising around the web, I stumble across this little tidbit of bull$hit today:
https://www.cnbc.com/2020/08/24/powell-set-to-deliver-profoundly-consequential-speech-changing-how-the-fed-views-inflation.html Apparently, something profound is about to go down. But it’s just another slight-of-hand tactic from our Bad Wizard.
Jerome Powell, the US FED central bank chief, is likely to detail a set of measures aimed at pushing inflation higher amid a coronavirus pandemic that has dragged the U.S. economy into one of its darkest hours. Powell, who will speak Thursday during a virtual version of the Fed’s annual Jackson Hole, Wyoming, conference, will outline what could be the central bank’s most active efforts ever to spur inflation back to a healthy level.
The speech is titled “Monetary Policy Framework Review” and wraps up a yearlong examination both among central bank officials and with the public, during a series of open events, on what policy should look like in the future. “Average inflation” targeting means the Fed will allow inflation to run higher than normal for a period of time.
Please, make this stop. This is no longer humorous. But wait, there's more ……
“Heading into Jackson Hole we are confident Chair Powell will use his speech Thursday to tee up a profoundly consequential and risk-friendly move to soft inflation averaging at the Fed’s upcoming September meeting,” wrote Krishna Guha, head of global policy and central bank strategy at Evercore ISI.
Guha and his team expect the Fed to “seek a moderate inflation overshoot during the recovery phase of this cycle” as a way to avert “Japanification,” or an extended period low growth marked by weak inflation.
Do many of you feel increasingly poor these days, as “Jappy Jerome” attempts to save us yet again? Well, you should. Because you are more impoverished. Let’s check out some reality.
The Bad Wizard of Oz and His Indices
The CPI chart on the Shadow Stats home page (
https://www.shadowstats.com/) reflects our estimate of inflation for today. The CPI on the Alternate Data Series tab here (
https://www.shadowstats.com/alternate_data/inflation-charts) reflects the CPI as if it were calculated using the methodologies in place in 1980 and 1990.
In general terms, methodological shifts in government reporting have depressed reported inflation, moving the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living.
So, according to Shadow Stats the inflation rate based on the data the government used back in 1980 (prior to repeatedly modifying it to fit the FED banking agenda) shows an adjusted
inflation rate today of approximately 9%. Similarly,
U.S. Consumer Prices Rose 10.1% during the first half of 2020, according to Chapwood Index. The Chapwood Index is calculated on the city-by-city basis because price increases vary greatly by city. The Core US CPI significantly underestimates inflation by excluding energy and food costs. People who depend on the official government CPI to guide their raises are falling farther and farther behind. A full table of cities is published on
www.chapwoodindex.com.
“An example of real cost of living increases, as indicated by the Chapwood Index, would be the impact on a New Yorker making $90,000 a year. That person would have to make an additional $2,430 this year just to keep pace with prices.
Looking at five years, the Chapwood Index found overall consumer prices jumped 9.9 percent per year. A number of California cities, Oakland, San Francisco, Sacramento and San Jose, came in at numbers at or approaching 13 percent per year.”
Now we have our Wizard attempting to engineer “something revolutionary” indeed: A 2% inflation economy out of a 10% inflationary reality. This is how NEGATIVE real interest rates are institutionalized. And the mechanism for PM prices to reach much greater heights.
It’s not revolutionary. It’s a thieving f-ucking scam.
Bad Wizard. Bad, bad, bad.
Tx