We tend to look at the increase in prices as inflation, but in a situation of fluctuations prices go up and down.
What if prices should be going down 3% but instead we see prices increasing 3%. We see a price inflation of 3%, but it is really 6%.
How realistic is this? Recent CPI numbers are down and such CPI adjusted payments as Social Security should be going down, or at least not going up. But according to out president seniors should still get an increase. He proposed an increase for the misfortune of not having to experience a misfortune.
If you get a zero increase in payment when your cost of living has actually declined then you have in effect gotten an increase. Declining wages which we are esperiencing is very deflationary.
American economists and policy makers live in the fear and the shadow of the Great Depression and its devastating deflation. European policy makers fear the runaway inflation that destabilized Europe prior to WW II.
With massive debt and government spending that is crowding out private borrowing, many wonder where the inflation is.
Perhaps it is just hidden.
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