Check out this website -- www.shadowstats.com -- a Shadow Government Statistics website that analyzes the TRUE money supply, TRUE CPI, REAL unemployment rates, TRUE gross domestic product figures, etc., etc. It is published by John Williams, and he has done fantastic work.
It is very instructive to see direct comparisons of what the government is telling its citizens, vs what really seems to be going on.
I think the traditional descriptions of cost-push vs demand-pull inflation make sense in localized markets over short periods of time, but I also think that the overriding influence and main cause of the type of inflation we're seeing right now, in the U.S. and worldwide, is the rapid acceleration in the creation of fiat currency by the US Fed and other nations.
Several things are acting strongly to devalue our currency -- the creation of billions of paper dollars more than are "retired" annually, AND, the massive write-down of hundreds of billions of dollars worth of wealth in the form of CDOs, CMOs, SIVs, Credit Default Swap premiums and the rest of the stinky "Tier-III assets."
Since in our fractional-reserve banking system, all money is "created" through the process of making loans, and since much of the debt in this country is backed with worthless assets used as collateral to secure those loans, massive defaults are going to be the natural result. A borrower defaulting on a loan, in our current system, is the worst possible outcome for a lender, because it means that the income stream from interest on that loan goes away, and that income stream is the ONLY thing that keeps the whole Ponzi Scheme from collapsing. Lenders honestly don't care that much about losing the loaned principle, since it wasn't theirs to lend in the first place! They want and need that interest-income stream.
These loan write-downs also have the same effect as printing more fiat-money -- there are suddenly far more paper dollars chasing after far fewer "real" assets... and the invariable result is that it soon costs more dollars in exchange for the purchase of the same number of assets... the very definition of inflation.
Fact: In the past hundred years, this inflation mechanism has resulted in our current dollar being able to purchase what only four cents would buy in 1908!
It's clear to me that the various government reporting agencies have been "trying to hide something" for several decades. They started changing the methodology of their data-gathering, data-analysis and reporting practices back in the late 70's when inflation numbers began to create political heat for too many incumbents.
Even now, the federal government is reducing funding to statistical reporting agencies, forcing them to reduce their sample sizes and/or leave entire segments of the economy un-reported.
What to do? Well for one thing, throw the bums out. I categorically vote against all congressional incumbents. I know some good ones will invariably be affected, but 99% of politicians just cannot seem to release their grip on the government teat once they latch onto it. It is totally and completely corrupting. You are living the result.
I'm willing to consider voting for an incumbent, if they prove themselves to be honest, forthright, full of integrity, leadership and if they sponsor "real money" policies and the right for law-abiding citizens to own and use any firearms. So far there have been "no takers" in any of my districts or on any of my ballots...
I'm also one of those pesky constituents who write letters (that are never read) to their elected representatives, and I've gone so far as to make appointments and meet with them when possible, just to let them know how I feel. I have a stack of meaningless auto-responder letters from my representatives and senators in Congress, thanking me for taking the trouble to contact them, and assuring me that my concerns are their concerns... blah, blah, blah...
Liars.
~H
"He can compress the most words into the smallest idea of any man I know."
-- Abraham Lincoln
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