Inflation Near 10%

It has often been discussed that the government’s CPI is an inflated number. For that reason, I am very happy that Google has taken upon itself to calculate its own cost of goods estimate based upon items sold on the internet. A much simpler process is to simply calculate the CPI according to the methodology that the Fed used prior to 1980:

Inflation, using the reporting methodologies in place before 1980, hit an annual rate of 9.6 percent in February, according to the Shadow Government Statistics newsletter.

According to John Williams, the site’s creator:

Though not yet commonly recognized, there is both an intensifying double-dip recession and a rapidly escalating inflation problem. Until such time as financial-market expectations catch up with underlying reality, reporting generally will continue to show higher-than-expected inflation and weaker-than-expected economic results in the month and months ahead.

Read the CNBC article here or visit the Shadow Government Statistics website directly.

Posted in Economics, Markets, Politics.

Tagged with CPI, inflation, Paul Volcker, Shadow Statistics.

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By SurlyTrader – April 13, 2011

Can Goldman Sachs Fail?

The former IMF chief economist and current professor at MIT’s Sloan School of Management, Simon Johnson, addressed the “Too Big to Fail” dilemma at INET’s Bretton Woods Conference. His conclusion is that we are going in the opposite direction, where too big to fail institutions are only getting bigger as they are borrowing cheaper than their smaller competitors.

“The bankers want to be paid, unadjusted for risk, from a return on equity basis…What is the size of the private gain relative to the public loss?”

Posted in Conspiracy, Economics, Markets, Politics.

Tagged with banks, financial crisis, Goldman Sachs, too big to fail.

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By SurlyTrader – April 12, 2011

The College Loan Scheme

Sallie Mae is the larges originator of student loans and here is a quick info-graphic that explains why they are so profitable despite terrible lending standards. It definitely aligns with my theme that the best way to make money is to get in bed with the government: