US Inflation Worse than Zimbabwe?

03/17/11 Baltimore, Maryland – If you live in the United States, your cost of living – even by official stats – is rising twice as fast as in Zimbabwe.

Yes, Zimbabwe…the country where at its worst $100 trillion is worth about 30 of the US variety…and good for four loaves of bread.

Yesterday, the Zimbabwe National Statistical Agency announced that consumer prices slowed last month to an annualized 3%.

But this morning, here in the good ol’ USA, the Bureau of Labor Statistics (BLS) announced the US consumer price index (CPI) rose 0.5% last month – which works out to a 6% annual clip.

Congratulations.

Of course, most of the increase in CPI was driven by higher energy costs and, to a lesser extent, higher food costs. So for Washington policy wonks and central bank honchos alike, the rise in prices doesn’t count.

Food and energy costs are “volatile” and not reflective of “underlying trends” as detected by such farseeing folk:

Gasoline up 4.7% (56% annualized)? Doesn’t matterPublic transit up 1.9% (23% annualized)? Statistical noiseFood consumed at home up 0.8% (10% annualized)? What part of “volatile” don’t you understand?

Thus the “core” CPI, for people who only eat iPads, rose a scant 0.2%. That’s an annualized 1.2%, on the low end of the Fed’s inflationary sweet spot. Print away.

Addison Wiggin
for The Daily Reckoning

Addison Wiggin is the editorial director of The Daily Reckoning, and executive publisher of Agora Financial, an independent financial research firm based in Baltimore, Maryland. His second editions of international best-sellers Financial Reckoning Day Fallout and The New Empire of Debt, which he co-authored with Bill Bonner, were updated in 2009. His third book, The Demise of the Dollar… and Why it’s Even Better for Your Investments was updated in 2008, the same year he wrote I.O.U.S.A.  ??

Wiggin is the executive producer and co-writer of I.O.U.S.A. an acclaimed documentary nominated for the Grand Jury prize at the 2008 Sundance Film Festival and the 2009 Critics Choice Award and shortlisted for a 2009 Academy Award. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. 

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