Revealing the Real Rate of Inflation Would Crash the SystemCharles Hugh Smith
“The grim reality is that real inflation is 7+% per year….What would happen if the real rate of inflation was revealed? The entire status quo would immediately implode. Consider the immediate consequences to Social Security, interest rates and the cost of refinancing government debt….Here are a few of the consequences: 1. Social Security beneficiaries would demand annual increases of 7+% instead of zero or near-zero annual increases….2. Global investors might start demanding yields on Treasury bonds that are above the real rate of inflation. …3. Private-sector interest rates would also rise, crushing private borrowing….4. Any serious decline in private and state borrowing would implode the entire system….Who’s being destroyed by 7+% real inflation? Everyone whose income has stagnated and everyone who depends on wages rather than assets to get by–in other words, the bottom 95%.”

Mr. Smith’s estimation of 7+% inflation is in agreement with’s estimation, which includes the items the government has gradually removed from the CPI index. We agree with Henry Ford’s sentiment, “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” One day the true rate of inflation will be revealed and on that day it will send gold prices intro the stratosphere.

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