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

The Most Important Trait of Any Successful Resource Investor

Henry Bonner

The gold mining sector is one of the most difficult areas of the market to navigate successfully. But there is money to be made here. Henry Bonner sits down with one of the giants of this industry and picks his brain about how to find winners in this market and the four things every great investment has in common. Read on...


Extra!
The Currency that is Winning the “Race to the Bottom”

Jeff Desjardins

Central banks all over the world are in the midst of an epic race to see which country can devalue their currency the fastest. It's a pretty close race, but you may be surprised to find out who's in the lead. Jeff Desjardins displays the current standings via a humorous and informative "infographic." Check it out right here...


“How to Get Rich” is Not How You’d Expect

Chris Mayer

The first thing you might notice about the life of Felix Dennis is that he devoured crack cocaine during massive orgies with hookers at his mansion. Yet despite his penchant for sex and blow, he admitted, "making money is the one addiction I cannot shake." And thankfully, he wrote a book about it. Chris Mayer explains...


How “Travel Hacking” Can Help Improve Your Credit Score

Chris Campbell

Right now, there is a way for you to travel almost anywhere in the world, completely free of charge. It stems from a relatively new phenomenon called "travel hacking," and if you follow a few simple tips, you could be on your way to a free vacation in no time. Chris Campbell has all the details, right here...


Huge Gains Waiting in a Forgotten Corner of the Market

Greg Guenthner

The S&P 500 may be getting all the headlines this week, but there's another sector of the market that is screaming "buy" right now. It may not be "sexy" and it certainly won't be grabbing any major press. But as Greg Guenthner explains, this corner of the market is poised to deliver a handful of savvy investors some incredible returns...