While unemployment keeps topping news headlines this year because of the suffering felt as Americans struggle in vain for a job, under the radar a more insidious problem is resulting from Obamanomics and is robbing you blind: Inflation.
So to add insult to injury, as people are out of jobs and having a hard enough time making ends meet, Obama adds inflation.
Corn is up 45 percent in the last three months. After skyrocketing, cotton prices have reached historic levels. Soybeans are up. Oil is up. Gold, copper and silver are up. So are coffee and cocoa. Beef prices are up. Almost every commodity is up by double digits.
Shadowstats.com, a website run by meticulous numbers man John Williams, gives a more accurate picture of inflation reality than proclamations from D.C. While the “official” government figure for inflation is 1.1 percent, shadowstats proclaims a shocking 8.5 percent.
To put this in perspective, any investments you hold yielding less than 8.5 percent are actually losing money.
As Steve Forbes says, the best gauge of true inflation for the last 4,000 years is the price of gold. Now gold is signaling the advent of hyperinflation.
To understand just how insidious inflation can be, you need to understand it is a wonderful mechanism by which governments can raise the amount of money they receive. Inflation is actually a hidden tax, which is blamed on someone besides the officials in power. The brilliant economist Ludwig von Mises explained the effect this way: “But inflation is a very convenient makeshift for those in power. It is a handy means to divert the resentment of the people from the government. In the eyes of the masses, big business, the ‘profiteers,’ the merchants, not the administration appear responsible for the rise in prices and the ensuing need to restrict consumption.”
Von Mises summarizes it this way: “Perhaps somebody will consider what I am saying here as antidemocratic, reactionary, and economic royalism. But the truth is that inflation is a typically antidemocratic measure. It is a policy of governments that do not have the courage to tell the people honestly what the real costs of their conduct of affairs are.”
Although he was describing previous European inflations in 1951, von Mises could have just as easily been describing the Obama policies of 2010.
Ironically and sadly, the poor and elderly suffer the most from inflation. It is a tax that impacts the consumption of those with the least means. Inflation restricts the consumption of the poor, and they become poorer.
This is another reason why the manipulation of government statistics is so brutal. For the last two years, Social Security recipients were denied cost-of-living adjustments because of the systematic underreporting of inflation.
The inflation benchmark used to set benefits is eroding the value of payments made to millions of people. While claiming to help the poor and elderly, inflation is a hidden way the liberal elite cut public spending.
Right now, inflation is showing up in commodities. We can expect the inflationary impacts of higher commodity prices to work their way through the chain of distribution from raw material to consumer prices. A day of reckoning is drawing closer.
Eventually, higher producer costs translate into higher consumer prices. Increased oil and commodity prices create a relentless upward pressure on inflation, and the value of money shrinks.
Even McDonald’s recently announced it is raising prices.