The True Rate of Inflation

The True Rate of Inflation by Brian Maher – Daily Reckoning

Dear Reader,

The Federal Reserve pursues its 2% inflation target with a zeal verging on derangement.

Yet it progresses toward its target as poor Sisyphus of Greek mythology progressed uphill with his rock — in vain.

Core inflation registered 1.9% in January… and 1.5% in June.

The most recent core inflation number?

A Sisyphean 1.4%.

The rock rolls downhill.

Here we speak of official inflation.

But is actual inflation dramatically higher?

Today we pierce the mask of statistics… expose the myth within… and hazard a true inflation reading…

The Fed’s 2% inflation appears as distant as the summit of Sisyphus’ hill.

Experts dispute the causes — depressed worker wages resulting from globalization, “secular stagnation,” the astrological misalignment of stars and planets, etc.

But assets such as stocks, bonds and real estate have been the scenes of dramatic inflation over the past several years.

And therein hangs an epic tale…

Joseph G. Carson, former global director of economic research at AllianceBernstein:

U.S. financial markets have in the last 20 years experienced three unprecedented booms in asset prices and two busts. During this span, the market value of real and financial assets held by households has increased more than $70 trillion…

$70 trillion!

Traditional inflation models exclude these asset prices.

But what if they were included?

The New York wing of the Federal Reserve has hatched a model for that expressed purpose…

The “underlying inflation gauge (UIG).”

This UIG incorporates not only consumer prices… but producer prices, commodity prices and financial asset prices.

It thus promises a true inflation reading.

The New York Fed:

The UIG proved especially useful in detecting turning points in trend inflation and has shown higher forecast accuracy compared with core inflation measures.

If we gauge inflation by this comprehensive model… the true rate of inflation is above the Fed’s 2% target… and roughly double the core rate.

Continue Reading / Daily Reckoning>>>

Sharing is caring!

Author Image

The Daily Coin

Rory Hall, The Daily Coin. Beginning in 1987 Rory has written over 1,000 articles and produced more than 300 videos on topics ranging from the precious metals market, economic and monetary policies, preparedness as well as geopolitical events. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver, Silver Doctors, SGTReport, and a great many more. Rory was a producer and daily contributor at SGTReport between 2012 and 2014. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Don't forget to visit The Daily Coin and Shadow of Truth YouTube channels to enjoy original videos and some of the best economic, precious metals, geopolitical and preparedness news from around the world.