Inflation is much worse than advertised. But you already know that if you’ve been in a grocery store at any point over the past year.
But how much worse?
Today’s guest is Ed Butowsky who has operated his own proprietary inflation index – the Chapwood Index – for well over a decade.
It operates in a decidedly simple and easy-to-understand manner:
“The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation.”
That’s it. It just adds up what people actually buy and measures the prices this time period compared to last and it does so in proportion to what median people actually spend as a percentage of their income.
No hedonics, no substitution, and no weighting tricks that are favored by the corrupt statisticians in the BLS.
The punchline? Inflation is actually about 2-3 times higher than what the government reports. Over time, and not very much, you will become impoverished by inflation.
There’s a repair professional that I follow on youtube called Louis Rossmann. He has an entire playlist of the fuckery that is New York’s regulatory agencies.
He has had fake lein put on his business, he’s been fined by New York, he’s gotten a warrant for his arrest, he’s had his business licenses threatened repeatedly.
Because New York is a stupid place filled with maliciously incompetent people who do not wish to make the place better. https://www.youtube.com/watch?v=qFVwQCFhKSE&list=PLkVbIsAWN2ls-WXrvFtAxoJ_VZIMSG9Z3&ab_channel=LouisRossmann
WHY is the truth about lockdowns, effective medicines, dangerous vaccines, how the DNC is making it all but impossible for RFK, Jr. to run for President, and, yes, inflation, so enormously falsified? Yet we “sheeple” do so little about it?
Sadly, I believe the vast majority of Americans have adopted a line from the 1976 academy award-winning film, “Network” - “Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials and I won’t say anything.”
I subscribe to an information source, ShadowStats.com that investigates the Fed’s & our incomprehensively-corrupt government’s figures and posts the true number on several issues. It’s founder, John Williams, is a man like Chris Martenson, both display an incisive understanding of the terrifying future we are facing and do so with epic courage.
What this country needs is 10,000 more of both of them.
This year my garden took off quite well. I don’t say we are selfsufficient but the entire spring and summer we did not have to buy any fruits and vegetables. We won’t have to do that until far in winter.
It is really an ease of mind to know that large portion of my spendings are now cut. Starting a garden has many advantages. One of them is that the rise in cost of living doesn’t hurt me as much as it would otherwize.
Butowsky started the Chapwood Index in 2008. So he’s been watching this gaslighting process develop for the last 15 years.He’s a financial planner by profession, whose job is to help people understand what they have to do to be able to retire - especially if they want to maintain the standard of living they’ve developed over the course of their lives. But at the end of this conversation with Chris he says he doesn’t know how he’s going to retire, himself.He tells us he has two children, aged 25 and 28. Both make over $100k. Both want to start families. He went with his older child to look at houses she can afford to buy in the current market and came away thinking that what she could get wasn’t worth the money she’d have to pay. A little later he says both children are still on his auto insurance policy.Huh? No one should think I don’t have sympathy. I’m also not rich by any stretch. I, too, have had to strategize and plan and execute over long terms. And, frankly, I’ve had a couple lucky breaks. But as I read the interview transcript I found myself thinking:
If Butowsky has been watching this crisis develop for 15 years, in detail, adding up the receipts twice a month, how is it he hasn’t figured out a way to secure his old age?How is he going to be able to help others figure out how to secure their old age? This begins to sound like taking advice on getting fit from an obese doctor.How does he have 2 children over the age of 25 who want to start their own homes but aren’t paying for their own auto insurance, even though they make 6 figure incomes? And especially if he’s at risk of not being able to fund his own retirement? And how do those kids think they’re going to start families if they can’t pay their auto bills?What I come away thinking is that this guy and his family haven’t managed to make the adjustment in perception that makes the difference between surviving hard times and not.
And so I wonder, how can it be true that knowledge is power? As far as I can see, it isn’t. Not necessarily. The scale tips if knowledge leads to action. So it’s not knowledge, but knowledgeable action that is power.
Knowledge is an act of consumption. Knowledgeable action is an act of production. We are a nation of consumers; there are very few producers among us any longer.
Butowsky seems to me to be demonstrating that we can know lots of stuff without it making any difference in how we live our lives - or how we prepare for the future. I start wondering how many people are in the same situation: lots of knowledge, but little to no change in behavior or application. I think: that’s most people.
Without question, a part of the problem we and our neighbors have is the gaslighting perpetrated by our government. But also, an equal or greater part of the problem is that our neighbors don’t act on what they can see with their own eyes, and they don’t want to hear the truth because they want to continue to live “the good life” of mindless consumerism without discomfort or interruption.
This came up in my life last weekend. In a conversation about risks we’re facing, a friend said to me, “This isn’t new, we’ve been through this before and we always pull through, somehow. We just have to have faith.” I’ll credit him with meaning by “we” the human race, not necessarily him and me. He acknowledged that a lot of people will get hurt along the way. But it’s just as clear that he doesn’t think he’ll be one of them.
Or, rather, he doesn’t want to think that he could suffer along the way, so he’s going to have faith that he won’t. But he’s not going to trouble himself to take any preparatory resilience steps.
Butowsky knows the data and the trends, too. But he says he doesn’t know how he’s going to maintain his lifestyle if he retires. He doesn’t say his analysis of the trends taught him that he needed to use the last decade to revamp his lifestyle and build resilience into his future. Nor does he give any indication that he’s now taking steps. I guess he intends to keep working for those dollars that he knows - and tells his clients - can’t keep up with the now exponentially-increasing rate of the increase in cost of living.
I just don’t get it.
They say Nero fiddled while Rome burned. It seems to me most all of Rome’s citizens must have been playing along rather than attending to the growing conflagration. Because that sure seems to be what most of our family, friends, and neighbors are doing.
I went to the Chapwood website. What gets me is that in the 2016-2018 years the % increase on these 500 items still ranged 5-13%. Worse now but it’s been bad for awhile; probably since 2008.
Your thoughts parallel exactly what my wife and I thought. Sitting through this presentation drinking our first cup of coffee, we both looked at each other with raised eyebrows hearing some of those statements. A long time ago we decided a plan “C” (ability to live very small) was needed to be the cockroaches who emerge from the rubble of the financial holocaust, blinking in the sunlight and exclaiming “damn, what was that all about?” All said, this was still a very enlightening and appreciated interview.
Agreed, great topic and guest. Did ‘blackberry service’ stand out to anyone else? I know, a little nitpicking. Went to their sight right away and found it very interesting. Crying inside for my place of birth, California. Yikes!
I have not listened to the interview yet, but I have thought about the possibility of it being impossible to retire due to the high inflation rate. Butowsky may be case in point. He has the smarts to strategize, but perhaps the inflation problem is so massive that no one will survive this unscathed? Maybe we simply have to reduce, rather than eliminate entirely, being a burden to our children in old age. That would also involve reducing my standard of living if I live that long. In the meantime, I am trying to strategize and keep myself healthy, but I am not confident it will be enough to keep from being a burden to my kids. But I’m trying.
The strength of your dissolution with the behaviour of another person is largely just a measure of the magnitude of your own ignorance about all the factors that are playing out in that person’s life.
I can relate to Butowski’s situation. There are physical, social and geopolitical forces at play that are difficult if not impossible in some cases to resist. Many are/will be swept along by those forces. I liken it to WW II and those many millions who completely lost control of their lives as the thundering tides of war swept through their communities. The way this civilization has progressed since the Great Depression, not everyone can be a farmer, or build a peak oil bunker in anticipation of a crash that may not come for another half century, or grow their own potatoes. Their life situation just does not allow for that. The physical reality of 8 billion people on a finite land area in the face of serious resource depletion also underscores a certain reality.
Inflation at 10, 15 or 20%+ is huge and is something that is going to be difficult for many to deal with, even those who understand the problem mathematically. Likely, inflation will ramp up even more before the wheels fly off the economic machine. So, yeah, I can see him being worried about retirement.
-best
Yeah, I have been in a front row seat of this reality. I teach both at big universities and also for a private college. The college prides itself in careful budget management and penny-pinches at every opportunity–almost to a fault. They have such a small admin department that during their periodic accreditation reviews the reviewers have a hard time believing that it can actually function. Function it does, and it does so quite well. Big university admin overhead is off-the-charts. They could cut the bloated Vogon bureaucracy substantially, and this would indeed provide a big savings to the student.
Incidentally, should not all those computers with their budget management database systems, associated automation, and so forth reduce the need for so many admin personnel?
-best
It is possible to be in a situation, know you’re in a situation, and be unable to mitigate that situation. My car insurance just went up 30% and my homeowners is going up 50% because the insurance company needed the rate increase. This is for all insured persons across the board at all insurers in the state. Even if you are as well armed with knowledge as Mr. Butowsky, it doesn’t take many hit like these before you’re screwed no matter how much knowledge you have. We all do something for income, and very few of us can go to our employers or customers and demand a 30-50% increase to keep up. You can only reduce your financial footprint to be so small. I can tell you that I have had some events occur in my life coupled with this extreme inflation that prevent me from ever retiring. A divorce in 2007 coupled with a child support payment I had to make until 2021 reset my whole life. I was unable to take advantage of the market and housing downturn in 2008 because my savings were cleaned out, living paycheck to paycheck, working a job that demanded less hours so I could spend time with my daughter. I’ve only been in a position to accumulate savings in the last 10 months. Now with markets at peaks and inflation roaring, I’m screwed the other way. Markets will go down again, but will they ever come back or come back in a time frame that matters for me? What if markets go down and move sideways for 30 years like they did in Japan? Mr. Butowsky may have some financial issues that put him in a similar situation. I have loads of knowledge, but no capital to execute on that knowledge.
