By Michael Snyder | Guest Writer
Inflation is going down! Let’s all celebrate! We all knew that when the Federal Reserve began aggressively hiking interest rates it would have an impact on inflation. Higher rates have caused a new housing crash, they have crushed the tech industry, and they have sparked the biggest wave of layoffs that we have seen since the Great Recession. We have entered a significant economic downturn, so it was inevitable that the annual rate of inflation would start to moderate. But as I will explain below, that doesn’t mean that inflation is now “under control”. The real rate of inflation is much higher than we are being told, and people all over the country are being absolutely crushed by the rising cost of living.
Let’s start with the good news first. According to the Labour Department, the annual rate of inflation is rising at the slowest pace since October 2021…
Consumer prices increased 6.5% from a year earlier, down from 7.1% in November and a 40-year high of 9.1% in June, according to the Labour Department’s consumer price index, a measurement of what people pay for goods and services, which labour released on Thursday.
The rise last month marks the slowest annual gain since October 2021 and matches economists’ estimates.
Okay, but Fox Business has just reminded us that the annual rate of inflation “remains about three times higher than the pre-pandemic average”…
Still, inflation remains about three times higher than the pre-pandemic average, underscoring the persistent financial burden placed on millions of U.S. households by high prices.
So we are still definitely in a high inflation environment.
But let’s dig deeper.
Most Americans don’t realize that the way that the inflation rate is calculated has literally been changed more than two dozen times since 1980.
And every time it has been changed, the goal has been to make inflation appear to be lower than it actually is.
If the rate of inflation was still calculated the way that it was back in 1980, the real rate of inflation would be close to 15% right now.
That would be comparable to the peak inflation that we witnessed during the Jimmy Carter era.
So don’t let anyone try to convince you that inflation is “low” or “under control” or anything like that.
Americans saw some real reprieve last month in the form of lower energy costs, which fell 6.1% in December. Gas prices dropped 12.5% over the month, the biggest contributor to the overall headline decline in inflation in December.
And once war in the Middle East erupts, gas prices will go to heights that most people never even dreamed was possible.
Meanwhile, services inflation has just spiked to a level that we haven’t seen in decades.
The cost of living has become extremely oppressive, and the American people are becoming increasingly frustrated by this.
I would like to share a video with you that illustrates what I am talking about.
The woman in this video doesn’t understand all of the numbers that I have just shared in this article. All she knows is that when she goes to the grocery store, prices are way higher than they once were. This video contains some graphic language, and I apologize for that in advance. But I want you to see her anger, because this is how millions upon millions of Americans are feeling about inflation right now.
$120,000 combined household income and can barely afford groceries… pic.twitter.com/qjune1aKyk
— Finance L’s (@TerribleFinance) January 10, 2023
Would you like to be the one that tries to convince her that inflation is “under control” now?
Sadly, the truth is that over the past few years the cost of living has been rising faster than our pay checks have, and so U.S. families have steadily been getting poorer…
The average American family has lost the equivalent of more than a month’s salary in annual income since President Biden took office as high inflation and rising interest rates eat away at their finances, according to research by the Heritage Foundation.
Experts at the conservative think tank analysed consumer prices and interest rates and found in their latest report released Thursday that the average American household has lost the equivalent of $7,400 in annual income since Biden’s inauguration Jan. 20, 2021. The income loss represents an increase of $200 from September, when the think tank’s research found a $7,200 decline in annual income for the average American household dating back to the start of Biden’s term.
Prior to the pandemic, we were in a low inflation and low interest rate environment.
Now that the Federal Reserve has dramatically hiked interest rates, we now find ourselves in a high inflation and high interest rate environment.
And higher interest rates are also hammering our standard of living…
While their elected representatives in D.C. struggle to pay the nation’s bills, Americans are facing a similar challenge as their household budgets are stretched thin due to inflation and higher borrowing costs. Those financial challenges led more than one-third of households to rely on credit cards or loans to buy necessities in December. Average credit card interest rates reached a new record high of 19.14% APR compared to a Bankrate.com database.
“Americans are increasingly relying on credit cards to make it from pay check to pay check, resulting in higher levels of indebtedness. Rising credit card balances in an era of rising interest rates is a path to insolvency,” Antoni told FOX Business. “The average interest rate on credit cards is now around 20% while half of Americans cannot pay off their credit cards each month, and balances are growing at a 16% annual rate.”
We are getting hit from both ends.
We have to pay more to buy the things that we need, and we have to pay higher interest rates when we borrow money to pay for those things.
The Federal Reserve has lost control, and we are careening toward the sort of historic economic crisis that I have been warning about for years.
But those that are under the spell of the corporate media will continue to assume that everything is fine and that our leaders have a plan to get us out of this mess.
I truly wish that was true.
Unfortunately, the short-term economic outlook is extremely dismal, and prominent voices all over Wall Street are warning that 2023 will be a really rough year.
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About the Author
My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com. In addition to my new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned) When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends. Time is short, and I need help getting these warnings into the hands of as many people as possible. I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, and financial or health decisions. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is definitely a great help. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, which he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, I strongly urge you to invite Jesus Christ to be your Lord and Saviour today.
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Read more on the Recession Coming Soon: We Are Being Warned That The Global Economy Is Having “One of Its Worst Years In Three Decades”
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