The hyper-inflation in Venezuela is a demonstration of the necessity of accurate accounting. For how can such a phenomena be allowed to grow to such dangerous proportions unless there is some form of cover up hiding the trend. This is happening in the United States today.
Everyone knows the cost of living is skyrocketing but they are being told by the government that inflation is actually very low and being measured and reported very carefully. This is simply not true. The government has come up with a way to hide the true inflation figure from the American public by a complex formula that excludes such things as fuel and food which are key figures that must be included in the inflation index and distorting other increases to reflect less dramatic changes.
This phenomena was exposed when the Boskin commission came up with a “new’ way to report inflation but very few reporters picked up on the significance of this fraud and now we are seeing a bewildered public and a diminishing standard of living unfolding before our very eyes.
This is serious business. Hyper-inflation in Venezuela is creating violence, chaos and misery . Should it emerge here as a surprise due to pretending inflation is under control the same results will appear on the American scene. This can be avoided with a return to honest accounting and reporting inflation as it really is which means taking into account the rise in prices without manipulation.
The government bought into the recommendations of the Boskin commission based on credentials of the participants instead of insisting on honest accounting. The results speak for themselves regarding the accuracy of the accounting. No person paying over $3.00 a gallon for gasoline can overlook the impact that has on the delivery of goods and services nationwide and the subsequent increase in all other prices. An inflation rate measured without fuel and food included is not a true figure but an attempt to defraud the public. And what agency is in charge of protecting us from fraud? The very agency that is condoning the “core index” inflation fiasco.
This perpetration of dishonesty is the result of a government that is unwilling to face reality. Politicians want to spend for any and all demands of constituents and after exhausting credit, maximizing taxation and printing money to cover huge deficits the only way to make it look like the game can go on indefinitely is to push phony information on the American public. That ploy is also showing cracks as we see with the financial crisis that is descending upon us.
With such a crisis before us you would think a candidate for president would come forward and point out the need for honest accounting but you will not see such a candidate from the current crop. This tells you what a sad state the country has deteriorated into by allowing the pursuit of political power to be an answer for the ills perceived as fair game for political solutions. The something for nothing mindset has placed us in a position that we must now either admit we have a huge financial problem in the form of under-reported inflation or continue to delude ourselves that the real figures will not rear their ugly head and rush us into chaos.
The fact is we cannot ignore what we know. As prices rise ( whether the government wants to admit it or not ) our cost of living will rise. It will require more and more dollars for less and less goods and services. As with the Confederacy and Zimbabwe we will face shortages , strikes, violence, bankruptcies and a debased currency without any value. And if we ignore the dishonesty of our government, who will we have to blame?Tags: Core Index Inflation reporting