4 thoughts on “31. They are Lying About the Inflation Rate”

  1. Fertilizer, specifically phosphorus, is 30% more this year than last year in my area. Fencing and lumber are about the same.

    So is deflation no longer a threat as you thought last year? M1 and M2 money supply is no longer being reported as of a few months ago, because they are hiding inflation. Motive: the government has sold “inflation protected bonds” (TIPS) since 1997 and go figure the average reported inflation since then had been about 3%. What happens when they can’t lie anymore and have to pay 10-20% interest on these bonds?

    I think physical silver is under valued. I bought a bunch of it, buried half. People have traded in silver for longer than recorded history, that’s not likely to go away. I can go to the Amish neighbors and buy flour with silver.

    1. I don’t know. I still think deflation will happen, it must. I also didn’t anticipate 6 trillion in monetary expansion. We have a lot more inflation ahead before the deflation collapse.

  2. It seems like medium to large businesses are sensing the second shoe is about to drop. Our largest client put in an order for over a $150,000 wanting a years supply of parts as soon as possible. This was too strange to ignore. In the past five years, they’ve only ever wanted to buy the minimum amount of parts when needed and not wearhouse anything, but now they want to order in bulk and in advance. We’re telling them that with a purchase of this size that they’ll have to pay for the material up front so we’re not left holding the hot potato. My dad and I were working on the qoute last night and most of the materials have increased 30% in price while other pieces have doubled. I wish I knew how much to inflate our labor costs for a year from now for the qoute. They’re definitely hedging that the prices will increase significantly by this time next year.

    1. Just-in-time is dead! Finally.

      I think this isn’t just related to inflation hedging, but also a loss of confidence in the whole supply chain in North America.

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