By understating inflation, the Federal Government and Federal Reserve have done two things:
1.Exaggerated our economic growth.
2.Lied about the true cost of living in the US.
Regarding #1, every time the US prints GDP growth numbers, it adjusts this data for inflation. The reason for this is that if the economy grows at 10%, but prices also rise at 10%, then there really hasn’t been any actual growth.
To deal with this, the US adjusts its GDP measures for inflation to make it appear as f they’re objective. The only problem is that the US adjusts GDP using a phony inflation number that is much lower than reality.
A great example is last quarter when we were told that the GDP grew at an annual rate of 0.1%. The reality is that if you used realistic inflationary measures, the US economy SHRANK at a rate of over -1% last quarter. Yes, negative 1%. The worst GDP print since 2009.
