Is government fudging the CPI?

By November 12, 2010

EDITOR: I have long believed the Consumer Price Index (CPI) is understated. My belief has been recently supported by Shadowstats, which shows a graph of the CPI from 1980 to 2010 (revealing the extent the CPI is flawed).

The government tells us the CPI will fall below 1 percent this year — this while my experience is that most everything I buy has gone up. Those of us who feel the pressure of rising prices in every area of our lives have to question the inflation rate the government purports it to be.

Has there been CPI manipulation? In 1983 the government changed the method of calculating the CPI, and it was further changed in 1999 with supporters claiming it resulted in a more true indicator of inflation. But is it really a true indicator of inflation or are there other reasons? Many feel we are being hoodwinked, and to add insult to injury a growing number of politicians are claiming that even the manipulated CPI is too high and should be further reduced.

I’ll leave it to you as to why the government continues to report inflation at such low levels.

Hint: Think interest rates, cost of living increases, and a false financial face to the world.



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