WSJ: Don’t Trust Government’s Inflation Numbers

“I will break the pride of your power” (Leviticus 26:19)

As I have been warning for years, the US has too much debt and will experience high inflation. All of this will have terrible consequences. Notice some of what the Wall Street Journal reported today:

Why You Can’t Trust the Inflation Numbers

By BRETT ARENDS

January 26, 2011…

As you battle to manage your family’s finances, be aware that there are three reasons why inflation needs to be on your radar screen.• First, the official inflation numbers should be taken with a fistful of salt.

Over the past 30 years, the federal government has made a lot of changes to the way it calculates inflation…

According to one rogue economist, John Williams at Shadow Government Statistics, if we still calculated inflation the way we did when Jimmy Carter was president, the official inflation figures would look about as bad as they did when … Jimmy Carter was president. According to Mr. Williams’s calculations, if we counted inflation under the old system the official rate wouldn’t be 1.5%. It would be closer to 10%.

Mr. Williams is just one voice. But it makes sense to treat the government numbers with skepticism.

Under the official calculations, if steak prices boom, the government just assumes you buy cheaper hamburger instead. Presto—no inflation!

Or consider the case of Apple computers. We all know Macs are expensive. And we know Apple doesn’t discount. The cheapest Mac laptop today costs $999. A few years ago, it also cost $999. So the price is the same, right?

Ha. Not according Uncle Sam. Using a piece of chicanery called “hedonics,” Uncle Sam calls this a price cut. His reasoning? You’re getting more for the money. Today’s $999 Mac is lighter, fancier and faster than last year’s $999 Mac. So the government calculates that the “real” price has actually fallen…

• The second reason to treat the official inflation figures with some mistrust is that they look backward. They register what just happened, not what’s about to happen next.

OK, so the prices of many things haven’t risen. Yet. But if the laws of economics mean anything, they will have to. Why? Because costs are rising…

• The third reason to be mistrustful of the inflation picture? Simple. Economics.

We are flooding the world with extra dollars. http://online.wsj.com/article/SB10001424052748704013604576104351050317610.html

If enough others start to realize how risky the US government is and what the real inflation rate seems to be, interest rates will skyrocket, and the national debt will be greatly increased–beyond what has been happening in the past several years. This could be so bad that we could get to the point that if the US government took practically ALL THE INCOME OF ALL ITS PEOPLE it still would run a budget deficit. We are getting closer and closer to a scenario that could get there.

And while some believe that the USA can simply print up more money to repay its creditors, creditors will not wish to be paid with increasingly worthless currency. Paper money has almost no intrinsic value (you can burn it, but otherwise it is of almost no practical use).

The USA has lived on borrowed money too long, and this will end in catastrophe according to Bible prophecy (cf. Habakkuk 2).

Food inflation is starting to become an issue. Notice the following:

The USDA reported these increases from December 2009 to December 2010:

Beef: up 6.1%.

Pork: up 11.2%.

Poultry: up 1.3%.

Eggs: up 6.1%.

Cheese: up 4.3%.

Butter: up 21.9%.

Fresh fruit: up 3.1%, with citrus up 9.1%.

Fresh vegetables: up 1.2%, with potatoes up 5.4%. On the bright side, lettuce was down 7.4% and tomatoes were down 10.5%. Prices of other fresh vegetables were up 6.9%.

Bread: up 1.1%.

http://money.msn.com/saving-money-tips/post.aspx?post=9c4bb9c1-06d4-4c9d-83f9-1b5e29186485

Eventually, food prices will skyrocket as people around the world realize that paper US dollars are not backed up really by anything. And the more of them that are printed, the faster people will realize that they have no real backing.

Prophecy moves forward–significant personal repentance is probably the only way out (as national repentance for the USA seems highly unlikely).

To learn more, please check out the following articles:

Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, British, Scottish, Welsh, Australians, Anglo-Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo nations? Why might God allow them to be punished first?
Will the Anglo-Nations be Divided? Will the lands of the United States, United Kingdom, Canada, Australia, and New Zealand be divided? What does Bible prophecy teach? Are there non-biblical prophecies that support this idea? Who will divide those lands? Who will end up with the lands and the people?
Prophecies of Barack Obama? Are there biblical and non-biblical prophecies about Barack Obama. Did Nostradamus predict Barack Obama dealing with the Antichrist? This is a lengthy article with many prophecies that Barack Obama may end up fulfilling.
Barack Obama, Prophecy, and the Destruction of the United States Some claim that Barack Obama is the prophesied “son of Kenya”. Might Bible prophecy be fulfilled by him?
The Plain Truth About Gold in Prophecy. How Should a Christian View Gold? What do economists and the Bible teach about gold? Gold and silver may drop in value. Inflation/deflation? What do Christians need to know about gold?