What you're seeing are the effects of inflation. The government has changed the basis for inflation. If we used the same inflation index which was used in the 70s or 80s then we'd be seeing anywhere from 7-12% annual inflation. Instead, the government has changed the basis for measuring inflation, allegedly to reflect a more realistic view of price increases, but in actuality to make the government look better.
Inflation is not the increase in prices. Price increases are an effect of inflation. Inflation is an increase in money supply without any additional backing of that money. The United States "prints" all the money it wants and then backs that money with debt which it then sells to other nations. The thing is, we print money far more money than we issue in debt. Just lately, China, Japan, and other big buyers of US debt have either slowed their purchase of US debt or stopped entirely yet we're still printing money.
Why print the money? Because mild inflation gives people the feeling of prosperity. Inflation makes it appear, artificially, that the economy is doing better than it is. Now why would an elected government want to make things look better than they are? Hmmmmmmm......
The problem is that once you're on the inflationary train it's next to impossible to get off of it. We've been inflating so much, for so long, that the debt is next to unmanageable and nobody in congress knows what to do about it. All the solutions would be economically painful for the US and nobody has the balls to put a stop to it on their watch.
I take it back. There is one man in the government who is raising the alarm any way he can. He's the guy who keeps the government's real books and he's David Walker, Comptroller General of the United States. All those countries who have stopped buying our debt know what he does.
And no, he's not elected.
You have got to see these videos. He's saying what the government and its media mouthpieces won't tell you.
America's Financial Future 1
and
America's Financial Future 2
Anyone feel it coming? Is it here already? How is the situation where you live?
Housing market is down, construction jobs in my industry are shrinking, gas prices at an all time high, gold prices rising, weak dollar, shaky stock market, record home foreclosures, mortgage lending industry laying off tens of thousands of people... The downturn is already here in the housing industry as far as I'm concerned. I just wonder when the rest of the economy will follow suit.