Inflation Predictions That Never Come True

• Author: Alex O'Connell
• Posted: 2024-07-07

If you live in the United States of America, then you know already that inflation is really high in recent years. After the government dumped trillions of newly-minted money into the economy during the COVID pandemic, prices almost immediately started to rise. At first, the government was blaming this on supply chain issues, corporate greed, and they even had a solid month where they were giving speeches and blaming it on people who were not vaccinated. After they could no longer lie about the impact and cause of inflation, the government's new tact was to claim it was a global issue, and that it was only "transitory" and things would ease up. Now it's 2023, and inflation shows no signs of slowing down. Eggs are up literally over 2,000% (two thousand percent!) compared to 2019, and the best the government can do is to tell people that things might calm down. Though the thing about these predictions, whether from the government or the private sector, is that they're never correct.

Someone, somewhere, from some think tank, or some fancy college, is constantly out in public making inflation predictions. The latest set of predictions for the middle of January is that 2023 may be the year where things finally ease up. However, most Americans have good memories and can vividly recall the same people saying the same things, and then inflation just kept going up. Now groceries are so expensive that even people who are receiving SNAP benefits cannot afford them without extra emergency money. Section 8 enrollment is over 1,000% higher than America's all-time high due to people not being able to keep a roof over their heads. The problems keep piling up, and it's all due to inflation.

Meanwhile, as Americans suffer, the federal government will charge the Federal Reserve (Fed) with printing more billions of dollars to wage a foreign war, and some talking heads will come out and make useless predictions about inflation that all fail.
 

How True Inflation is Calculated

According to the federal government and Federal Reserve, inflation is measured in America via the Consumer Price Index (CPI) and is basically measured by the percentage of change people have to pay on consumer goods. However, things get confusing when the government delivers these numbers to you, and that's because the two categories of numbers used can be confusing. It's tough to explain, but the basic gist is that inflation is measured month-over-month, while it's also not added together. Yes, this is very weird, and no one really knows why the numbers are like this, but essentially they'll tell you that "Inflation for the month of November was 6.5%." This leaves you thinking, "How is that possible when I'm spending 150% more at the grocery store?" What they mean is that inflation is up that much from the previous month. Why don't they add the months together? Economists claim this is because the Consumer Confidence Index (CCI, and, yes, that's a real thing) needs to be controlled.

So, essentially, for the government to come out and announce that "Inflation is up to 301%" would cause mass panic, people refusing to spend, and an outright depression. Yes, this is just another dishonest metric used by the government that's incredibly confusing at bare minimum. They calculate inflation month-over-month, but they do not add the changes up, and they do not have months of "0%" inflation or negative numbers, and so they don't take away. It's all basically addition without adding, in order to hold an average. Again, yes, this is very, very confusing for the average person.

The real metric of inflation is how much you're spending. When you go grocery shopping in January and spend $240 for things that only cost you $110 in 2020, you know, without question or equivocation, that inflation is really up over 100%. You know this. You know when a used car in 2022 costs more than a brand new car in 2019, or when a house that used to cost $170k is now running $420k, that inflation is entirely out of control.

The point here is that the powers that be, the people that affect inflation the most, cannot even properly calculate it and be honest with you about what the true numbers are. Trusting that they'll be able to predict it is pointless. Inflation is going to go up as long as the government keeps having the Fed print un-backed money to flood the economy. It's the one demonstrable factor you can follow 1:1 every single time.