Inflation and the "burrito index"

I've written often enough about inflation here, most recently last month.  It's a serious and growing threat, particularly because the government persistently and deliberately understates the actual rate of inflation, so that it doesn't have to pay out so much in inflation-linked indices.  On that same date, I embedded the video below, in which Ed Butowski explains why he created the Chapwood Index to give a more accurate, more realistic understanding of the real rate of inflation.

Now, Charles Hugh Smith (whom we've met in these pages before) updates his "Burrito Index" measurement of inflation.

Long-time readers may recall the Burrito Index, my real-world measure of inflation. The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016). The Burrito Index tracks the cost of a regular burrito since 2001. Since we keep detailed records of expenses (a necessity if you’re a self-employed free-lance writer), I can track the cost of a regular burrito at our favorite taco truck with great accuracy: the cost of a regular burrito has gone up from $2.50 in 2001 to $5 in 2010 to $6.50 in 2016.

It's time for an update: the cost of a regular burrito has now reached $7.50, triple the 2001 cost. That's a 200% increase in 17 years. According to the federal government, inflation since 2001 has risen about 40%: what $1 bought in 2001 now costs $1.43, according to the BLS Inflation calculator.

The Burrito Index is five times the official inflation rate ... Lest you reckon only burritos have tripled in cost since 2001--have you checked out college tuition or rents lately?

. . .

Welcome to debt-serfdom, the only possible output of the soaring cost of living for the unprotected who are ruled by a hubris-soaked, Protected Elite. Our job is to shoulder the higher prices by taking on more debt--debt which is immensely profitable for the Protected Elite.

Here's what you're supposed to swallow: big-ticket expenses such as rent, healthcare and higher education cost tens of thousands of dollars more, but TVs cost a few bucks less, and as a result, official inflation is 2.1% annually.

As long as we accept this travesty of a mockery of a sham, we deserve what we get.

There's more at the link.

A 200% increase in prices in 17 years?  That squares very well indeed with my earlier estimate that "Our incomes are being reduced in purchasing power by approximately 10% per year".

Folks, as I've said many times before, debt, inflation, and all their concomitant problems are killing us, economically speaking.  If you're not working all-out to reduce your debt and live within your means, this whole mess is going to come crashing down upon you within a measurably short space of time.

Peter