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The Fed is dramatically understating real inflation.
As you know, I’ve been very critical of the Fed’s inflation measures for
years. The official inflation measure (Consumer Price Index or CPI) does a
horrible job of measuring the actual cost of living for Americans.
I have long stated that this is intentional
as the purpose of CPI is to hide the true rate of
inflation so the Fed can paper over the decline in living standards that has
plagued the US for the last few decades.
The Fed isn’t doing this out of ignorance, either. Back in 2002, Fed
researchers actually reviewed the usefulness of its CPI metric for
forecasting inflation.
The results were not pretty. In fact, the Fed discovered that its official
measures of inflation (CPI and PCE) do a horrible job of predicting
future inflation.
So what does predict future inflation accurately?
FOOD prices.
We see that past inflation in food prices has been a better
forecaster of future inflation than has the popular core measure…Comparing
the past year’s inflation in food prices to the prices of other components
that comprise the PCEPI (as in Table 1), we find that the
food component still ranks the best among them all…
https://research.stlouisfed.org/publications/...Inflation.pd...
I want you to focus on these two admissions:
1) The Fed has admitted that its official inflation
measures do not accurately predict future inflation.
2) The Fed admitted that FOOD prices are a much better
predictor of future inflation. In fact food prices were a better predictor of
inflation than the Fed’s PCE, non-durables goods, transportation services,
housing, clothing, energy and more.
Put simply, if you want to predict inflation well… you NEED to
look at food prices.
With that in mind, food inflation is on the rise. As a whole, Food and
Beverage inflation has broken out of a descending wedge pattern (blue lines)
in the context of a massive wedge triangle pattern (purples lines). We’re
heading for a test of the upper purple line shortly.
Overall inflation will be following by a few months, but it’s
coming.
Put simply, inflation is rising. And at it is going to be getting worse in
the weeks and months ahead. Why do you think the $USD has dumped 10% this
year already?
This is THE BIG MONEY trend today. And smart investors will use it to generate
literal fortunes.
We just published a Special Investment Report concerning a FIVE secret
investments you can use to make inflation pay you as
it rips through the financial system in the months ahead
The report is titled Survive the Inflationary Storm. And
it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
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