Addison Wiggin

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

$100 Trillion Zimbabwe Note

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 matter
  • Public transit up 1.9% (23% annualized)? Statistical noise
  • Food 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

Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He's the creator and editorial director of Agora Financial's daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar, and Why it's Even Better for Your Investments was just fully revised and updated. 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. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.

  • jason

    Wow great. Just don’t eat and don’t use gasoline and there’s no inflation.

  • Brad

    Brilliant piece. This says it all. BTW, next time I get pulled over for speeding, my defense will be that I watch only the engine temperature gauge, because the speedometer is too volatile to be useful.

  • Paul from Yogya

    Reasonable article except that your simile is 18 months out of date. Zimbabwe uses mainly US$ and South African Rands these days. The country’s former currency no longer circulates and is no longer ‘legal tender’

  • Pingback: Trackback

Recent Articles

How to Shield Yourself from the Next US Debt Crisis

Matt Insley

With the pain of the 2008 financial crisis squarely in America's rear-view mirror, consumer credit and US debt are steadily on the rise. My how quickly we forget... Today, Matt Insley explains why you should not be sleeping on the severity of the US's debt load, and how you can avoid the coming crunch. Read on...


Great News! You Can Still Cash in on the 3-D Printing Boom

Josh Grasmick

Perhaps the most astounding technology to emerge in the 21st century is that of 3-D printing. It's given humans the ability to create virtually anything out of practically nothing. But as Josh Grasmick explains, 3-D printing is just a stepping stone to the next great leap in technology: 4-D printing. Read on...


3 Market Sectors You Should Avoid at All Costs

Greg Guenthner

With so many areas of the market taking losses to start the month of August, it seems the market correction that many pundits have been hinting at may be right around the corner. Today, Greg Guenthner details three sectors that are getting hit right now, and why you'll want to get out while you still can...


How the American Dream Can Make You 14-Times Your Money

Chris Mayer

Most U.S. citizens subscribe to an idea called the American dream - working hard on a level playing field so you can "get ahead" in life. But that's not what the original "American dream" was all about. As Chris Mayer explains, that term originally referred to a completely different, yet equally important goal. Read on...


Why Too Much Data Might Actually Protect Your Privacy

Sam Volkering

The world is awash with data. All these data will shape the future, helping people make smarter decisions and act faster. But to realize this vision, there has to be a way to crunch the data. And with such a huge amount of it, that could be a problem. Luckily, there's a unique solution on the horizon. Sam Volkering explains...