Dateline: 29 March 2016 AD
Our government routinely lies to us about the economy. The official Consumer Price Index (CPI) numbers are just one example. In the above video, Ed Butkowsky explains his Chapwood Index, which is a more dependable gauge of true inflation in the United States than the government's lying numbers.
With the help of friends all over the country, Butkowsky has been compiling the inflation numbers since 2011. You can see the numbers at The Chapwood Index Web Site.
If you go to that web site, you'll see that the 5-year average of price inflation across the country looks to be around 10%. That is NOT 10% over 5 years. It is an average of 10% every year.
That is considerable, especially when, for example, the government says inflation in 2015 was less than 1%.
The problem with the government lying about the reality of inflation is that the CPI number affects the Cost Of Living Adjustment (COLA) numbers used to adjust many pension, payroll, and government beneficiary payments. If the government officially declares there is inflation, then a lot of people stand to receive an increase in their income. But if the government says that there is no inflation, and there actually is inflation, then all those people have a problem making ends meet.
You probably know that already, but I learned about it today when I listened to This Excellent Interview with Ed Butkowsky at Peak Prosperity. The interview is well worth listening to.
This matter of inflation, and the true inflation we are experiencing, is incredibly important to understand. It's important to anyone who has to work for a living, and who thinks they might want to retire from working someday.
Unless you have somehow been blessed with a lot of savings, and investments that pull in a reliable percentage of income above true inflation, you may be in for a rude awakening when it comes to retirement.
But inflation is only one concern. Pension programs all over the country are facing serious troubles. This Recent Article is pretty sobering, especially if you are one of the 115,000 retirees who are facing up to a 50% cut in their pensions. Thepension crisis will become more widespread in the years ahead.
The reason I bring this up is because the reality of inflation, and the likelihood of significant pension cuts is something that's much easier to deal with if you take them seriously now, as opposed to allowing yourself to be a victim of circumstances later (along with the vast majority of other victims).
So, what can we who are not financially "set for life" do to help ourselves now, so we are not in a crisis later? Well, when Ed Butkowsky was asked what people can do in the interview (mentioned above) he said people are going to have to just keep working at their wage slave jobs to continually generate income.
I think he could have given some better advice than that, but it may be that he isn't aware of the other options....
For example, if someone eliminates debt, establishes themselves on a small section of tillable rural land, with friends or family around them (a.k.a., "community"), acquires fundamental tools of self-reliance, grows much of their own food, lives well within their means, establishes some sort of skill-or-service-based part time home business that they can operate into their retirement years, and they live well below their means, I think that someone will have much more financial resilience in the face of inflation and broken pension promises.
Think in terms of less consumption and more personal production. Think of it as "voluntary simplicity." Maybe even "voluntary poverty" (which is much nicer than involuntary poverty).
The fact is, very little is needed for a happy life. But having very little on your own piece of land, while taking care of your own basic needs, is a whole lot better than having very little in a public housing apartment in the city, or so it seems to me.
Being forewarned allows wise people to plan accordingly. Consider yourself forewarned. These are things to be seriously thinking about—and I'm seriously thinking about them.