For the past twenty years, maybe fifteen, but the theory is the same, inflation rate was set or controlled by governments worldwide. The federal reserve banks were forced one way or another to adapt the policy of their respective governments. If inflation remained below 1%, the various reserves did the bidding by flooding individual banks with fiat currencies. One would think that this would cause inflation. However, filling the banks coffers didn’t mean that individuals pockets were filled. So inflation didn’t respond to the increase in the money supply.

However, so things are not all that they seem to be in the inflation space. For instance the price of TV’s have imploded during the past twenty years; what cost $3,000 then can be purchased today for less than $1,000. A DVD back in the day was available for your arm and leg. Today, one can be had for $59.99; to top it off they are 1/5 the size. Imagine that? Cameras, the best can now be had for $1000, compared to $2500 just a few years ago. Miniaturization has entered our lives at warp speed, computing is the best example. Thirty years ago, the computer of today needed a hotel room to occupy because it was so large; today we wear one on the wrist . And we can go on and on.

Our point here is two fold; the price of these items has declined at a precipitous rate. Without providing empirical evidence we can make a rough guess that the rate is at a minimum of 100% during the past 20 years. Factoring in household purchases over time, we can assume that they have purchased, computers, TV’s, cell phones in lock step. A back of the envelope calculation indicates that these items have decreased at a 5% rate per year over the time frame. Hard to argue with that.

A buyer of motor vehicles expected prices to remain fairly stable as they had over the past ten years, but then Covid landed on our shores. A chip shortage developed, automobiles became in short supply causing used car prices to shoot upward. The supply chain became longer causing more delays and higher prices due to the fact that people wanted their cars now. Dealers were in no hurry to discount. therefore prices went through the roof; less trade-ins caused used car prices to skyrocket upward. The supply chain was impacted too, causing more shortages in more industries.

Food costs rose, commodities rose, sustainability became the new theme. And before you knew what was happening, wage demands along with shortages caused retail havoc, not to mention the paucity of software engineers.  And so be it, inflation roared ahead at a rate not seen for forty years; the heyday of Jimmy Carter. What  does that all mean? First off is that monetary expansion does not directly cause inflation. There is no phenomena here, nor a monetary experience if you will. But, we must take into account peoples purchase over time. How they spend money, what percent of their pay is spent on goods and services that have decreased in the past decade or two. And then in relation with those compare the with those that increased; to tally both we are forced to intersect them price wise to formulize an inflation rate.

In distilling the past we find that the underlying inflation, that is the goods and services needed for daily living has chronologically increased by a minimum of 5% per year over the past ten years. Official pronouncements such as the CP Index concealed what we, the shopper, saw in the real world.

Now that the truth has been uncovered we implore you to get ready for the “NEW FED COIN” which at sometime in the not too distant future will replace the “once almighty greenback.” You say it isn’t true? Check Weimar, check 1933, check 1971. Governments will do anything to remain in power. But this time might be too late. Bitcoin is going mainstream.