Inflation Status

Dec 20, 2012: The Federal Reserve is inflating the money supply by $80 per month, $960 billion per year.  Compared with the M1 money supply, that is 40% per year.  Even if you use the M2 money supply measure that includes loans that is 9.6% per year.  If you are shopping you will see increases in prices like the ones reported by CNN (see below). Did you get a raise this year?  Social Security investors (those put their retirement into a government "LockBox") got a raise. How about 1.4%.  Where is all that money going? Click Here for some items that may be eliminated to indicate that the government is serious about dealing with our economic problems.
June 3, 2011:
from data obtained from a CNN website (for those who think I only watch Fox).  The article purports to show the reduction of the buying power of the dollar as a result of the treasury expanding the supply at at time they should be contracting the supply.  The data is from commodity prices that directly affect consumer prices and include sugar, coffee, wheat, soybeans, cotton, corn, and gasoline.  I have included gold and silver in the average, but, their change has actually moderated the average rate than exaggerated it, as one might expect from news reports and advertisements. 

Product Todays Price 1 Year Change

Sugar/lb 0.23 71.00%
Wheat/Bushel 774.25 75.99%
Soybeans/Bushel 1401.25 47.91%
Coffee/lb 2.70 93.00%
Cotton/lb 1.64 107.00%
Corn/Bushel 7.58 115.00%
Gasoline 2.98 43.00%
Silver/oz 36.14 102.00%
Gold/troy oz 1543.00 28.00%

The average change is 76%!

For those who don't remember how to do percentages, that means it will cost you an average of $1.76 to purchase the same items today  that you could purchase a year ago for $1.00.  Put another way - your dollar is really worth only, in purchasing power, 56% of what it was just a year ago.

Updated October 2, 2012

 Report 2006 2012 Change
 M3 $10000 $15000 50%
 M2 $6800 $10000 47%
 M1 $1400$2300
 Money Supply
 $900 $2100 180%

So what, you say.  The stock market is up, many of you have gotten raises, and you are reasonably comfortable.  However, realize that the change in the money supply hurts first the people on fixed incomes.  Then it hurts your children because it will cause our creditors, 47% of whom are foreign, to demand higher interest rates when the loans are renewed.  Since almost a half of the revenues go to paying the interest on the loans, it portends a bleak future for our children and grandchildren.

If you would like more information about the money supply click  here.

For more on the effects of inflation click