Government Stats
Realistic?
Q. I sometimes listen to a financial radio call-in show on the weekends. The host insists there is no inflation – which makes me feel crazy. Also, why do the CPI and the government continue to say there is low inflation when everything I pay for is getting more expensive? I live on a fixed income and this scares me. Am I nuts?
Answer:
I know what you mean. This is a scary subject. Right now there are riots going on worldwide because of the steep climb in prices for rice, corn, and things necessary to live. This is a fact ignored by our government and certain financial advisors. They insist it hasn’t crept into our economy. But, has it?
Chuck Missler’s Analysis
Dr. Missler reports that “according to the United Nations, global food prices rose 35 percent in the last year. Since the new year prices have continued to rise. This year corn prices have hit a 12-year high and the price of wheat has jumped almost 90 percent. Likewise, in just the past few weeks the cost of rice has gone from $580 a ton to $760 a ton. Rice is the staple food for more than three billion people around the world. Most of these live in poorer nations, and some already spend 50 to 70 percent of their incomes on food” (2008).
He Will Supply Our Needs
But before we discuss statistics let’s address what we should remember to believe – assuming we are Christians. As a Christian we are not supposed to worry. The Apostle Paul told us…
“My God will supply every need of yours according to his riches in glory in Christ Jesus” (Philippians 4:19). He also said “do not be anxious about anything, but in everything by prayer and supplication with thanksgiving let your requests be made known to God” (Phil. 4:6).
Don’t be Anxious
My favorite passages come from the “anxiety” chapter in Matthew 6. The Lord taught us:
“Therefore I tell you, do not be anxious about your life, what you will eat or what you will drink, nor about your body, what you will put on. Is not life more than food, and the body more than clothing? Look at the birds of the air: they neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not of more value than they?” (Matt. 6:25-26, ESV).
Be Ready to Share
Finally, Christians who have enough to eat and are rich by the world’s standards are instructed to “not be conceited or to fix their hope on the uncertainty of riches, but on God, who richly supplies us with all things to enjoy. Instruct them to do good, to be rich in good works, to be generous and ready to share”…(1 Timothy 6:17-18).
In these hard times it would be good for all of us to commit these verses to memory.
Government’s Vested Interests in Low Inflation Stats
As far as the government statistics concerning inflation and the radio talk show host you hear on the radio, these people don’t tell the truth. They don’t want to tell us the truth.
That is because the government lies for a myriad of reasons – including keeping inflation statistics low so they don’t have to pay more for cost of living increases to retired folks on social security.
Furthermore, some financial advisors want people to buy their newsletters and financial products. If inflation is low people tend to buy stocks rather than other products such as real estate, gold and silver, or other inflation hedges. Typically, the stock market goes up when inflation is low. So they have a vested interest in keeping us misinformed.
Bureau of Labor Statistics (BLS)
Sadly, Washington D.C. is a political machine that spends millions to keep us dumbed down. Years ago the Bureau of Labor Statistics made some dishonest changes to the price indexes that measure the costs of things.
Hedonic Adjustments
For instance, they added “Hedonic” or quality adjustments to their way of measuring things. This means that if your computer runs more efficiently, for example, and has more memory, then you have purchased a more valuable computer with your money. The “real” price you paid is less than you actually paid. The government’s “hedonic adjustment” applies to many of the products we buy.
Price Indexes Changed
If you quit buying expensive steaks and bought chicken instead, then the price of beef didn’t really rise. You just chose chicken. Therefore the “real” price you paid for it is less than you actually paid.
In truth, however, prices for goods have risen substantially. We are able to buy less and less for our dollars. The value of the dollar is going down. So it takes more dollars to buy the same things.
Robbing Grandma
Because government payments for social security and health benefits are tied to inflation – but our government is “broke,” they must find ways to lie about price indexes, quality of goods, and other measures of inflation. This robs Grandma and Grandpa the most!
An Abomination
Our government is guilty of an abomination to the Lord! “Differing weights and differing measures – Both of them are abominable to the LORD” (Proverbs 20:10). “Differing weights are an abomination to the LORD, And a false scale is not good” (Prov. 20:23).
Gross Domestic Product (GDP)
Furthermore, the Gross Domestic Product looks as if it has gone up (or gone down less) if inflation numbers are skewed. If inflation is understated by 2 points then GDP is overestimated by 2 points.
M3 Money Supply Growth
Not too long ago, Federal Reserve Chairman Ben Bernanke announced that the M3 money supply numbers would no longer be published – This is all the money in circulation. He said it was “too expensive” to continue these statistics for the public. (No matter that his department “prints” all the money it needs).
But, no wonder! His department has been busy printing new “funny” money to cover the Bear Stearns losses and numerous other credit defaults throughout our system.
(If you or I did this we would go to jail for fraud/forgery). People who follow these things estimate that the true money supply growth is now in the 17-18% range. We are on our way to hyperinflationary days.
BLS Payroll
Employment numbers are also “fudged.” The BLS survey of employment added a Birth/Death computer model to their statistics. In February of 2008, for example, this computer model added 135,000 jobs to the total before “seasonal adjustments.”
Without this creative device the payroll employment would have fallen by 198,000 jobs – not the drop of 63,000 which was their “real” number. (This is a “false weight” and “false scale” despised by our Lord).
BLS Household Survey
This estimate is produced by contacting citizens to see if they are working or not. It calculates if they would “like” to be working and when they “last looked” for work. After a short while, those who are not working are just dropped from the survey!
In other words, if you haven’t looked for work in the past four weeks you are not included in the survey as “unemployed!” Wow! Worse, if you worked for only one hour per week, you’re considered “fully employed!” Now that’s magic! A creative “false weight” and “false scale.”
Shadow Statistics
Not to despair, however – there are groups who keep track of true inflation numbers. According to them the statistics are quite different from the government numbers. Inflation is rampant. Unemployment is high. The M3 money supply growth is scary. The CPI is out-of-control.
But then, you knew that already. No. You’re not “crazy.” Anyone who buys gasoline, milk, cereal, uses electricity and sees a doctor once a year knows this.
Shame on the government! Shame on talk-show hosts who lie to us and violate God’s laws. They are guilty of promoting “false measures” and “false scales” we are warned against.
But then the Scriptures warn us: “Behold, I send you out as sheep in the midst of wolves. So be shrewd as serpents and innocent as doves” (Matt. 10:16, NASB).
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References:
Benson, Richard. 2008. The magic mirror economy. 19 March. Available from: www.prudentbear.com.
Missler, Chuck. 2008. Behold a black horse: The global food crisis. 15 April. eNews issue. Available from: www.khouse.org.
Williams, John. Shadow government statistics. Available from: www.shadowstats.com.