> Should I use the "unofficial" numbers?

You should consider all the numbers, including the way inflation used to be reported (see www.shadowstats.com).

> You're right, a tremendous amount DOES depend on them and that's why the statistics are scrutinized heavily. If the Government was systematically underreporting inflation through the CPI then you'd hear about it outside of the conspiracy theory websites.

I'm sure you think people like Jim Rogers, Peter Schiff, Congressman Ron Paul, and David Walker (former US comptroller and head of the GAO which does most of the intergovernmental analysis you mention) are all crazies just like me. No really, I am pretty sure you think that, so I won't bother to ask.

> Of course they do. Inflation is a very complex thing to measure.

That justifies adjustments (like seasonal, perfectly reasonable, which I did not mention), it does not justify wonky adjustments which hide inflation. As you said, only the headline numbers get reported by the mass media. It's all part of the confidence game. I'm not objecting to the confidence game, it has to be played especially considering our deficit situation, I'm only objecting to pretending the confidence game doesn't exist or doesn't have an effect on how the headline numbers are calculated.

> Incorrect - Housing is.

You're right, I was wrong on that. I was writing passionately and didn't check. It doesn't change my argument, though, even as the #2 expense food and energy inflation has a critical impact on how low-income families survive, or people on fixed incomes. No COLA for SS recipients 2 years in a row can really hurt if everything at the grocery store costs more. Maybe, with inflation so low as you claim, everyone's rents have gone down. I dunno, mine hasn't.

> You should read a little bit more about how this works instead of just copying from a buy gold website.

You should think a little bit more about how this works instead of just copying from Ben Bernanke's speeches. I suppose he is unbiased, though, and has no part in the confidence game.

> These numbers are all reported in the official statistics. It's all in the U-6 measurement which is released at the same time as the headline number, the U-3 measurement, that the news agencies pick up on.

Yeah, and you can still calculate growth of the money supply in the broadest terms (M-3) if you wanna do it yourself, the numbers are still there in the reports they just don't do the calculation for you anymore. People are not gonna do this, they are gonna watch CNBC and hear everybody but Peter Schiff say "everything's fine, don't worry about our deficits, don't worry about the fact that the largest creditor nation in the world has become the largest debtor nation, don't worry about the possibility of inflation from the necessity of monetizing the debt, I'm sure we can just tax everybody a little more or raise the retirement age and it'll be fine" -- and then think that Peter Schiff is the crazy one. (Just like me, I'm proud to say)

> Thanks for the anecdote - I'll stick to statistics thank you very much. And while food/energy prices have risen above the trend - housing has crashed 30% in the past few years. You can't just pick and choose which items to pay attention to.

Who's picking and choosing? Yeah, housing has really come down. That's great for the millions of people who can't buy a house now since thankfully the lending standards have become sane again.

> What will help lower income Americans is a good economy. You cannot have a good economy with inflation running so low.

If your economy depends on inflation, sure. If your government and your population are in massive debt, inflation is VERY necessary to a good economy. Unfortunately inflation hurts lower-income Americans the worst, because a larger percentage of their income is spent on necessities.

> A lot of people inside and outside the Fed research inflation. This is just hysterical if you think it's a massive coverup.

I don't think it's a massive coverup. And I don't think there is a problem with inflation, RIGHT NOW. I think there could be a big problem with inflation in the near future if we continue with massive deficits, and yeah I'm a little worried about it. It took from George Washington to Ronald Reagan to amass the first trillion in debt. It took from there to GWB to get to ten trillion. Now with Obama we are adding over a trillion a year. I shouldn't have to explain the power (and the danger) of compound interest to someone on HN.

> Stop. This is the must illuminating of statements you made - You really don't understand how the financial system works. The Fed does not sell public debt: That would be The Treasury.

I didn't say the Fed sold public debt. I apologize for the hanging antecedent -- I meant that they (the government, including the Fed) have a bias to make things seem rosier than they are because it allows them (the government, including the Treasury) to sell public debt. Don't deny that there is a confidence game going on, that the value of the dollar depends on people's confidence in its stability. Spending a couple trillion dollars a year more than you take in, and promising to spend tens of trillions in the coming decades to support people whose invested money you have already spent, is not conducive to stability.

> People buy U.S. Government Debt because it's backed by the taxpayers of the largest economy of the world. That's about as safe of an investment as there is.

An individual cannot survive spending more than he earns indefinitely. A business cannot survive spending more than it earns indefinitely. A government cannot survive spending more than it earns indefinitely, unless it can pull the wool over other countries's eyes indefinitely (China, Japan, the largest holders of US public debt) to allow it to happen.

I like this analogy by Peter Schiff: imagine each country is a person on a deserted island. Everyone's job is to gather food for the American to eat, and every night they have a banquet where they bring all the food and the American eats it. Now, you could say, America is vital to this island's economy! Without him, none of the others would have jobs. The truth is, without him, they could do something else, gather more food for themselves or maybe relax on the beach. It's a gross oversimplification but it gets the point across -- just because China holds trillions of our debt and doesn't want to see the value of its holdings go down as the dollar goes down, does not mean they will continue to buy more dollars indefinitely and throw bad money after good. They have already started to pare this back.

Copy and paste off a buy gold website? Hell, I could probably write one of those websites better than they could. I'm wayyyy deep into the crazy. "In times of universal deceit, telling the truth is a revolutionary act."

> Again. Inflation at 1.1%. Core inflation at 0.8%. There isn't a problem with inflation.

I don't have a problem with crack cocaine. I just crashed after my last high and slept for 48 hours straight. That's 48 hours I've been sober. I don't have a problem.

Inflation/borrowing allows politicians to give people things without paying for it, which gets them re-elected, unlike taxing which is politically unpopular. It's the perfect system. Spend whatever you want. Make a big deal about promising to be fiscally responsible in the future, but don't give it more than lip service. It won't be your problem when the consequences come knocking. Live on the high hog, it's a free ride, and all it costs you is mortgaging your grandchildren's future. How's that for some fear-mongering? Sadly it isn't especially far from the truth.