For instance if beef becomes too expensive, ¬†people buy chicken instead, then the CPI starts using chicken prices, because that‚Äôs what people are buying. ¬†Figuring it this way reduces inflation. ¬†When beef gets to expensive we eat chicken, when chicken gets to expensive we eat baloney.¬† But there is no change in inflation.
A second major factor is that the ¬†government includes quality as well as increases in figuring prices. ¬†If a item costs 10% more, but it is 10% higher in quality, then there was no inflation.
For example, if the government adds a new additive to our gasoline that costs 30 cents a gallon, they have improved the quality of the gasoline so there is no inflation.¬† Some bureaucrat is the one who determines that the quality has improved. ¬† Of cause, we pay more, but there is no inflation.
What brought this up is that my wife does most of the grocery shopping.¬† Well the other day I went to the store with her and took a look at the prices.¬† Talk about sticker shock. ¬†My income is not going up and the government claims there is no inflation, but the prices continue to rise.
The way I see it the situation is only going to get worst.¬† So what can you do about it? ¬†Look for things to put your money in that will hedge against inflation.¬† This can be land, gold, silver, food and other types of investments.¬† For those of us with less money it can be as simple as adding to our food storage.¬† Four dollars in the bank loses money ever month, ¬†a can of corn beef that cost you four dollars this month, will be worth more next month.
Look for ways to protect yourself from inflation.