“THE EMPEROR HAS NO CLOTHES”

May 15, 2008

 

This is actually an article on inflation, but it will utilize the imagery contained in the famous tale of “the emperor’s new clothes.”

 

I’ve been thinking of doing this blog for some time, but it is so appropriate for today that I will put it off no longer. Yesterday the “official” government CPI report came out and it said, once again, that there really isn’t any meaningful inflation occurring in the USA. Like the rest of you, I buy gas for my car, groceries for our table, etc. and I know that inflation is amazingly high in just about everything we are buying. Rather than keep the main point of this blog to the end, I’ll state it clearly at the start and then document my assertion in the rest of the blog. Here is the really big, dark secret that has been “swept under the rug” in the US economy for years. Are you ready? Here it is…

 

The government’s “official” inflation statistics are a lie. Indeed, the “official” CPI has been lying about the real inflation rate for many years. Let’s do a “reality check,” shall we?

 

It is a surreal ritual we go through every time the government releases its “official” inflation reports. No matter how high inflation gets in the real world, the “la-la land” of government statisticians report that there really isn’t any significant inflation going on in the US economy. The so-called “core inflation rate” endlessly reports that there is barely any inflation at all! The “core inflation rate” reported yesterday in the government’s “official” inflation data declared that inflation was up only 0.1%–as close to no inflation as it can statistically get (see USA Today link below). The USA Today article in the newspaper was entitled “Inflation could be worse.” The on-line version of the same article had a more probing and honest title: “Inflation could be worse than consumer price index shows.” The on-line title addresses the truth more delicately than I did above, but the USA Today article could just as well have been worded more bluntly as: “The consumer price index is a lie.” More and more media outlets are noting that the “official” CPI data is dramatically understating the real inflation rate.

 

I’m hardly the only one noting that the CPI data is false, as I’ll document below. The current state of government reporting about the inflation rate is much like the old story about “the emperor’s new clothes” in which everyone pretended to see the emperor’s non-existent “new clothes” until a young child blurted out the obvious by saying “Why is the emperor naked?” The US government has been reporting that there has essentially been no high inflation in the US economy for many years and the media and voters have all bought into the lie as did the emperor’s subjects in the old tale. However, the lie has been told for so long that a lot of people are now starting to say “the emperor is naked.”

 

The USA Today article documented some of the deceitful methodology used by the government in its CPI data. The article reports that while the real world price of gas rose 5.8% in just the month of April, “the government’s formula adjusted that gain to a 0.2% drop because gasoline usually rises this time of year.” Did you catch the deceitfulness? Even though gasoline prices rose dramatically in just one month, the “official” CPI pretended that gasoline costs dropped last month in its calculations! The government basically said: “gasoline prices usually go up this time of year, so we will pretend that this year they dropped in price.” Where is the logic in this assumption? The article cites the Wachovia Economics Group as saying “The drop [in the CPI’s assumed gas price] makes absolutely no sense.” Thank you, Wachovia, for stating the obvious. The article also reports that the “official” CPI reports that “food prices are up [only] 5% the past 12 months. This report is just as ridiculous as the data saying there was no gas price rise in April. An article in my local newspaper, The Sioux Falls Argus-Leader (“As economy worsens, coping becomes essential,” May 4, 2008), reported that “Since last year, egg prices are up 30%, milk and cheese have increased 13%. Prices for wheat, soybeans, and corn have jumped 60% to 80% since last year on the Chicago Board of Trade.” Interestingly, a graph on the front page of my local newspaper on the same day reported the “official” milk price rise as 5% over the last year (less than half the actual increase reported in another article in the same newspaper on that very same day)!

 

In each issue, the USA Today has a commodities chart showing the year-to-date increase during 2008 in a number of commodities. Today’s issue lists that, since the start of 2008, aluminum has risen 24.1%, copper has risen 22.3%, corn has risen 29.5%, unleaded gasoline has risen 28.5%, natural gas has risen 55%, heating oil has risen 36.8%, light sweet crude oil has risen 29.4% and platinum has risen 33.4%. The overall “CRB index” (which is a composite of all commodity prices) is up 17.6% since the start of this year. Granted that most of these prices are wholesale price indicators, but even allowing for some retailers absorbing a portion of the wholesale cost increases, it is obvious that the “official” CPI data stating that there is essentially no inflation at all at the “core” level isn’t even remotely credible.

 

Other responsible parties have also noticed this fact recently. Martin Weiss is a respected national financial analyst who has been interviewed on many “establishment” news outlets. One of his recent “Money and Markets” reports (see second link below) was entitled “The Prelude to Double-Digit Inflation,” and in it, he stated that “US import prices have catapulted 14.8% compared to a year earlier,” and added that sugar rose 72% and crude oil rose 102% in the last year. Weiss also asks: “Isn’t it suspicious that the only measure that does not yet reflect surging inflation–the Consumer Price Index– also happens to be the yardstick with the most immediate political implications?” He predicts that the “gap” between “real world consumer prices” and the “government’s distorted CPI…is about to burst onto the scene as a scandalous cover-up.”

 

Indeed! People’s incomes are controlled by the CPI data. What do you think will be the response when all retirees and those on fixed incomes realize that the CPI manipulations have resulted in far lower paychecks than they should now be receiving? How about union members? Their wages are often tied to the CPI and the understated CPI has robbed them of needed inflation-adjusted COLAs? All non-union workers have also been cheated out of COLAs because the government’s CPI data has understated inflation for years.  

 

Weiss’ report also cites a website, www.shadowstats.com,  which calculates inflation in an honest manner. He states that while the “official” CPI reported an inflation rate of 3.98% over the last year, the true inflation rate in the USA was really 11.58%. He also notes that the dishonest reporting of inflation data was present throughout the Clinton years as well as the current Bush years, so both the Republican and Democrat parties have cooperated in the CPI deceptions.

 

Do you think the new Presidential candidates will go back to reporting the inflation rate in an honest manner? As of this writing, the new US President will be Senator McCain, Senator Obama or Senator Clinton. All three have served in the US Congress, which has for many years been complicit in the inflation rate reporting scandal. Indeed, Congress has been shockingly profligate and irresponsible in its spending for many years under both GOP and Democrat rulership. The historically low approval rates for both President Bush and the Congress confirm that the American people deeply disapprove of both the Executive and Legislative branches of the US government. Polls show that, overwhelmingly, the US population believes the nation is “on the wrong track.” Unless you demand honesty from your elected representatives on the real inflation rate, you can be sure they will most likely stay silent on the issue.

 

Need more convincing? Let’s consider both a left-wing and a right-wing source. Forbes.com sounds like an establishment, Wall-Street kind of website. One writer at that site, Robert Lenzner, wrote an article “Inflation’s Very Scary,” in which he stated “It’s pretty hard…to believe that the rate of inflation is only 3.4%” (see third link below). He cites the experiences of real-world people who are experiencing inflation rates far higher than the “official” rates. Re: the suspicious “official” inflation rates, Lenzner writes: “Can it be that the way the Fed figures inflation needs a thorough overhaul? The powers that be may think it is better to not know, to be dumb, or, at least, to play dumb” re: the real inflation rate. Reproduced below the third link is the text of a story sent to me by a reader (I did not have the link). The article is by John Rubino about an article which appeared in the May, 2008 issue of Harper’s Magazine, called “a venerable fount of left-wing culture.” The Harper’s article is about how “the US government has been systematically distorting the economic numbers it reports,” and it asserts that the government is not just lying about inflation data, but about unemployment, economic growth and national debt calculations as well. It gives the real data on these economic yardsticks, as calculated by www.shadowstats.com, the same entity cited in the Martin Weiss article in the second link below. The Harpers’ article even reports that the government began distorting the economic data as far back as the LBJ administration.

 

Did you know the Bible mentions the economic phenomenon of inflation? It does so in the obscure book of Haggai. Haggai is set in a time context where the people of God were being cursed because of their sins. One of the curses was inflation. Haggai 1:6 describes inflation in these words: “he who earns wages earns wages to put them into a bag of holes” (RSV). The language is metaphorical, but it depicts the value of money decreasing so quickly that it began losing purchasing power as soon as the worker was paid. While the ultimate example of inflation occurred in the Weimar Republic of Germany where money was losing value so quickly people bought loaves of bread with wheelbarrows of paper money, inflation is clearly getting steadily worse in not just the USA but in many other parts of the world. In Luke 12:2 Jesus Christ noted that no secrets can be kept indefinitely. He said: “For there is nothing covered, that shall not be revealed; neither hid, that shall not be known.” The US government has lied about inflation (and apparently other economic data) for a long time, but the truth is now starting to come out in media articles. The voters will be furious against incumbents of both parties when they realize that the deceitful CPI statistics have caused American wages to fall far behind the rise in prices. It is my belief that the political elites are trying desperately to “keep a lid” on this scandal until after the 2008 elections.

 

There is one school of thought that the elites are deliberately being profligate with the US budget and refusing to protect the USA’s border with Mexico because they want to destroy the USA and its economy. Why? To create a crisis so bad that the USA will have to accept a political union with Mexico and Canada and accept a new North American currency to replace a dying dollar. I receive emails from those advocating this position and you can see an immense amount of plausible information arguing for this outcome by doing a websearch for “North American Union” and the new “Amero” currency. Whether this will happen or not remains to be seen, but the Bible does predict that a global economic system called “Babylon the Great” will come into existence at the end of this age just prior to the Second Coming of Jesus Christ. Revelation 18 describes this “globalist” system as a self-serving alliance of the political leaders of the earth’s nations (the kings) with the heads of global, multi-national corporations (“the merchants of the earth”). Revelation 18 prophesies that this dominance by global elites will be short-lived as their political-economic system will collapse at the end of our age. Indeed, it almost collapsed globally a few months ago due to the subprime mortgage/collateralized debt obligation/derivatives fiasco. The Federal Reserve Board reportedly averted a complete collapse of the US and world economies by using radical emergency powers (not previously used since the Great Depression years) to create 100s of billions of dollars out of thin air and “lend” this fantasy money to banks, Wall Street firms, etc. where it magically became “real” money to keep them solvent.

 

The deceitful CPI data could also create a crisis which will bring down the western economies because underpaid consumers will eventually become so strapped that the consumer economy will collapse. Revelation 18:11 prophesies the global corporations will someday “weep and mourn” because “no man buys their merchandise any more.” The collapse of Babylon the Great’s global economic system could be caused by warfare, but it could also happen due to prolonged and deceitful CPI reporting. Babylon the Great’s multinational corporations need consumers to have money in their pockets to “buy their merchandise” in global markets. A skewed CPI which understates inflation will eventually destroy the balance sheets of the multinational corporations of Babylon the Great because the consumer economy will eventually reach a point of utter collapse. 

 

It is my sense of things that the global elites of Babylon the Great know a collapse is coming, but they want it to occur at a time of their choosing. They will not want it to happen before the 2008 American elections. After the elections are over, a time of their choosing could arrive. If the USA is absorbed into a North American Union and a new Amero currency replaces the US dollar, then it will become evident that the economic profligacy and self-destructive policies of the last few decades by the US government was intended to produce just such an outcome. The manipulated CPI will also be one of the tools which can make a collapse happen. Please understand that I do not know if this will be the outcome. I hope that such an outcome does not happen and it is not essential that it occur to fulfill biblical prophecies. However, it is one possible outcome.

 

Those wishing to learn more about the origins of the Babylonian political/economic system and how it has, for millennia, used the power of debt to enslave entire nations are referred to my free report entitled “What Kind of Captivity?” at the Articles link at this website.

 

PS. If you are angry that the “rigged” CPI data has resulted in your income being far lower today than it should be, don’t email me. Contact your Senators and Congressmen.  Since they are politicians, they will not “see the light” until they “feel the heat.” It is an election year so they may listen to voters between now and November. After the election, they will listen only to the special interests who funnel obscene amounts of money into their campaign coffers.