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Hyperinflation Making Preserving Wealth Uphill Battle

2009 is marked as the year hundreds of billions of American taxpayer dollars bailed out poor Wall Street’s big banks, only to see those same banks hit record profits by the end of the year, and much of the bailout money completely lost—never to be repaid, according to a recent report by the TARP inspector general. Meanwhile, $20 billion to $30 billion bonuses are expected to be handed out by these very same banks whose reckless behavior caused a financial crisis that the average American is now paying for and will for a very longtime… only because our government insisted “they are too big to fail”.

All this while, Main Street suffers despite pleas to stop the printing of excessive money and shut off the Federal Reserve’s endless financial faucet … Americans are losing their jobs, homes, and life savings. Hyperinflation is already increasing the prices of ordinary goods, leaving Americans wondering who is to blame and, more important, how can they preserve their wealth.

Watch this video to learn more or you can pick up the phone right now and call Nabers Group directly at 877-903-2220.

CPI Explained – Part 2 – Substitution

This picks up where a previous post left off. You may want to read that post first in order for this one make sense.

Looking at the picture above, I can only imagine that this is the way that the following idea was made into government policy. The second major way BLS’s CPI calculation policies were altered is through the concept of subsitution. In brief, this concept argues that as the price of an item rises, consumers start buying cheaper alternatives.

Consumer substitution is absolutely true. It’s a fact; we all do it. It’s a sign of inflation. We know there is significant inflation when prices of things we buy go up in price. Everything doesn’t go up equally all at the same time. As prices are rising, consumers will substitute goods to get the best deal. BLS uses this concept to reduce the mathematical weighting of items in their basket of goods that rise sharply in price. It is an assumption that [Read more...]

CPI Explained – Part 1 – Hedonics

If you use money, don't brush off understanding it. Let's examine inflation in a way we can all follow.

While the measurement of inflation varies wildly depending on which economist you talk to, here we will examine the official figures published by the Bureau of Labor Statistics (BLS): CPI or Consumer Price Index. The purpose of publishing CPI is to measure inflation and/or deflation, the decreased or increased buying power of the U.S. dollar. Awareness of inflation is essentially an awareness of how much our central banking system, the Federal Reserve, is printing or destroying money through “monetary policy.” This side of economics can get confusing, but it doesn’t have to be. This account will be an understandable explanation intended for accountants and laymen alike.

CPI is not calculated the same today as in the 70s & 80s

While remarkably high inflation is a key part of our memory of the 70s and 80s, if today’s CPI calculation methods were applied to the 70s & 80s, the CPI figures would be revised to show very low inflation – probably under 6%. Why? Two important concepts have [Read more...]

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