Peter Schiff explains how misleading the US inflation figures are, as it’s in the Governments interests to downplay the true figures.

Some of the main points covered:

  • Keynesian economists reference the Government CPI figures to justify QE but the true figures show high inflation.
  • Money printing is Inflation and results in rising prices.
  • Government methodology is designed to hide the effects of inflation.
  • Before the election a Fox poll showed people are most concerned with inflation (i.e. people don’t believe CPI figures)
  • Government CPI figures from 1970-1980 while compared to a basket of goods was accurate but was way lower from 2002 to 2012.
  • Government figures are wrong. An example of this is the CPI reports a rise of 37% in magazines and newspapers from 1999 to 2012 but when you look at the cover prices over that period, the average increase is 131%.
  • Government figures show healthcare costs only rose 4% from 2008 to 2012. That alone tells you the CPI is misleading. A Kaiser survey showed that premiums increased by over 24% in that period (5.5 times faster than the Government’s figures)
  • Healthcare costs only have a 1% weighting in the CPI figures despite the fact for medium families income it is almost 33% of their expenditure.
  • It’s the Governments vested interest to fool the world into believing there is no inflation. After all if they admitted true inflation then they couldn’t continue stimulating the economy and would be forced to deal with the deficit.
  • The clowns in Washington say the current inflation figures are too high and want to change the way its reported.
  • The true rate of inflation would be similar to the 1970s somewhere between 7-10%.
  • Foreigners are absorbing the excess dollars and buying US Treasuries causing a bond bubble (exporting inflation). Eventually they are going to want spend their dollars and goods will be going out and money coming in causing huge inflation.