“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”

— John Maynard Keynes – rebeccarice.net .

Whether it is your paycheck, social security check, or any other form of income you rely on. If you feel your income just doesn’t seem to go as far as it used to, you’re right. It doesn’t!

I think Rebecca Rice and Richard Benson have the best articles out there in the ether world that help to explain the manipulation that is taking place with the consumer price index by the Bureau of Labor Statistics (BLS.)

Below I have attempted to summarize Rebecca, Richard and others well articulated thoughts.

Richard Benson argues there are 4 ways in which the consumer price index is manipulated:

1) Making sure the wrong items are in the index;

2) Taking “hedonics” to ridiculous extremes;

3) Getting consumers to do more of the work and receive less services;

4) Changing to a Chain Weighted Index.

Making Sure the Wrong Items are in the Index

About 30% of the CPI looks at the cost of housing. David Haggith points out that with housing being the government’s highest weighted component in the calculation of CPI, a 2% skew makes almost a 1% change in the rate of inflation.

You might think if Housing was so important, they would take into consideration ing. Not how much housing prices have gone up, which accounts for over 60% of American’s, but instead assumes that everyone in the country rents their home. David Haggith points out that