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Home > Uncategorized > Washington’s BIGGEST Lie

Washington’s BIGGEST Lie

July 18th, 2012

Washington’s BIGGEST Lie

How do you choose just one when there are so many whoppers to pick from? I’m going with this one because it affects 100% of the population and the deception is so blatant.

The most egregious falsehood? The one repeated by Uncle Bernanke and Uncle Sam on a daily basis…

“There is little to no inflation.”

For the period ended June 30, 2012 preliminary Chained CPI [C-CPI-U] was reported as being just 1.6% [source: Bureau of Labor Statistics].

Most individuals think of inflation as the increase in cost of buying the same basket of goods and services that they did versus the previous month or year.

That’s not how the BLS reports things. They readily admit …

The CPI is a statistical estimate that is subject to sampling error.

Chained CPI for All Urban Consumers (C-CPI-U) covers approximately 88 percent of the total population. CPI-U include in addition to wage earners and clerical worker households, groups such as professional, managerial, and technical workers, the self-employed, short-term workers, the unemployed, and retirees and others not in the labor force.

The C-CPI-U in its final form accounts for any substitution that consumers make across item categories in response to changes in relative prices.

Translation: Chained CPI assumes those who used to eat filet mignon have switched to chuck steaks, pork chops or hamburger due to rising filet prices. It could mean comparing from-concentrate orange juice prices to what fresh-squeezed, not-from-concentrate OJ was selling for one year ago.

Including perhaps involuntarily self-employed people, part-timers, unemployed, retirees and others ‘not in the labor force’ stacks the deck in terms of BLS’s license to assume trading down in response to higher prices.

But wait, there’s more.

If you pay your bills or shop for your own groceries you’ll recognize another big source of hidden inflation. Here are some common examples.


New ‘cases’ of Coke now contain 20 cans- not 24, a 16.67% price change if the ticket price remains unchanged. Half-gallons of ice cream are almost universally 1.5 quarts now while their packaging appears identical to the naked eye.

If you’re a healthier soul consider the change in Tropicana orange juice and my own Independence Blue Cross premiums from 2011 to 2012.


Blue Cross offered me a static premium if I was willing to take a much higher deductible plan with way bigger co-pays. Tropicana charges the same now as they did before the 7.8% shrinkage in their package size. [Thank you, George Constanza].


Why does our government lie to us about such an important topic?

They’re committed to cost of living adjustments for active and retired civil servants, welfare recipients, and social security beneficiaries.

It’s much cheaper to lie and costs less votes to cheat rather than reporting the truth. Undocumented inflation steals from everyone in the same lethal way that fudging LIBOR rates did. That sin is being talked about daily. False CPI numbers never get mentioned.

Please let me know in the comments section if you think I’m off-base in my conclusions based on your own real-life experiences.

Dr. Paul Price July 18, 2012

  1. Ask IBX Team
    July 18th, 2012 at 14:28 | #1

    Hi Paul -

    Saw this post and would like look into the issue you mention about your rates. To help us look into this, could you please provide some contact information?

    Upon receipt, one of our customer service representatives will reach out to assist you.

    Thank you,
    Ask IBX Team

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