Peter Schiff of Europacific Investments outlines how inflation measurements have been tampered with over time to reduce the CPI and PPI inflation readings.
The first step was convincing the markets that hedonic adjustments were okay. Next came the legitimization of substitution bias. Then the Fed convinced everybody to ignore monthly increases in food and energy. When that wasn’t enough, it got everybody to ignore yearly increases in food and energy. Finally, when even all these tricks were not enough to conceal the growth of inflation, the Fed finally played its trump card by telling the markets that inflation is the poor step-child of its much more import parent, GDP growth.
