How Government Keeps 72% Inflation Hidden

The Bureau of Labor Statistics hopes that you did not pay attention in Economics 101.  One smart guy saw through their manipulation and shares just how the BLS claims 0% inflation when it actually is 72%.

“Stealth inflation”, as the Consumerist demonstrates, is where a product is redesigned and sold at the same cost, but the bottle content is smaller and diluted.  Take the example of Sodastream.

The number of servings is down to 2/3 of the original amount, the bottle size isn’t that much smaller. That’s because the measuring cap is now bigger, and each serving uses more syrup. “The worst part is that they just diluted it with more water so the ‘new improved’ ones LOOK like they are the same size,” reader Erik complained to us. “They are 440ml instead of the old 500. EVIL! Free the bubbles! Stop this shrink ray occupation of my favorite soda!”
The deceit is not with Sodastream, as a business they can do what they want, but the Bureau of Labor Statistics claim that 0% inflation has occurred.  Their math however is as issue.
What is far more troubling is that for the Bureau of Labor Statistics, both the “old” and the “new” product costs the same, or $5.99, hence there is no inflation… until one does the actual math.

The math:

  • Cost per serving “old” style: $0.1198
  • Cost per serving “new” style: $0.2066

Nominal inflation: 72.4%

Worse, there is not even an attempt to make the “new” product “hedonically” better, or for that matter different in any way – it is just smaller, and massively diluted.

The BLS has reported core CPI (Consumer Price Index) that is “negligible” for seven consecutive years, therefore allowing the Feds to keep its zero-interest rate policy.

Source: Zero Hedge






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