Generally speaking, we are the richest nation in the world, which means that goods and food(particularly) are generally cheaper for us to consume. Our number 1 export is inflation/excessive printed cash. And it has been now proven that the largest part of our GDP is in our government's spending. It is the only reason why the GDP number is growing! Now all that cash that is exported, will ultimately find a home to roost and it has found a particularly dangerous one. Commodities in general, but particularly food. So prices have been rising sharply along with the now inflated Dow Jones(but that's another story) since the start of Ben Bernanke's Quantitative Easing 2.
This is exactly why loose monetary policy is extremely dangerous. Particularly excessive money printing and low interest rates. With no gold standard or anything else to back our currency with our money is losing significant value on a daily basis. This is why the gold standard was placed in the constitution. They knew that backing the currency with Gold and Silver would force the government's hand in spending, and ultimately in its ability to grow. Obviously the farther we have gotten away from this policy, the worse off we have become.
So now we take a look at the CPI number which I will let the article below do most of the explaining. But basically it states that the percentage of food price increases that we include in the CPI are so low that they are basically irrelevant. Particularly compared to other nations. India has a weighting on one end of the spectrum of 50%! We are on the completely other end with it as low as 7.8%! No wonder the CPI never rises. As you have real estate that is over weighted, and have falling prices. Food prices are steeply rising everywhere in the world but it not even on our government's radar! This is the idea that the world will be going up in flames, with the american people starving yet the government still saying inflation is still low. All depends on what the number is based on, now isn't it?
And the government is in collusion with the big banks to keep real estate prices slowly falling, but still not yet falling at a fast enough rate so we can actually find a bottom and move on. They actually changed the accounting standards so that the large banks don't actually have to mark-to-market any of their assets, and have actually maintained pre-recession values on their balance sheet. For if they did have real accounting standards, these large banks would immdeiately fail again and TARP 2 would be issued. The large banks such as;Morgan Stanley, HSBC, JP Morgan Chase cannot be allowed to fail. They are the only ones doing business with the federal government! It's all one gigantic crap shoot just waiting to implode. But you will see more of this, this year as 2011 will be the worst year for foreclosures. As the banks begin to pick up steam on handing out default notices to millions of Americans that have been living in their houses rent free for a year or more. All the while the banks have been covering up the latest and largest fraud in mortgages that America has ever seen. Yet Not One Person Has Gone To Jail. Hmmm guess we support corruption now, and turn our head the other way. But if you and I steal a candy bar we go to jail. But apparently stealing from people is A OK. Guess it just depends on who you know ;)
Article on the CPI is here.
http://www.zerohedge.com/article/tale-two-inflations-here-why-us-cpi-indicator-flawed-and-why-bernanke-will-maintain-zirp-rev
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