Inflation Causing Decline in U.S. Standard of Living

FORT LEE, N.J., May 19 /PRNewswire/ -- The National Inflation Association today released the following inflation update to its http://inflation.us members:

The Bureau of Labor Statistics (BLS) today released their Consumer Price Index (CPI) report for the month of April, which showed year-over-year price inflation of 2.24%. This was down from March's year-over-year increase of 2.31%. As discussed in NIA's new documentary 'Meltup', which has now surpassed 309,000 views in less than one week, the BLS uses geometric weighting and hedonics to understate inflation, in an attempt to keep Social Security payment increases as low as possible. NIA estimates the real rate of price inflation to be approximately 3%-4% higher than what's reported by the CPI. Americans receiving Social Security should be receiving payments that are approximately double what they receive today.

As shown on our new charts page, average hourly earnings in the U.S. is now at a record nominal high of $18.98; but adjusted for real inflation, hourly earnings in the U.S. is now about half of what it was in the early 1970s. During the 1970s, it was possible for American college students to pay their own tuition by working part time, without student loans or any help from their parents. (Besides paying their own tuition, many students in the 1970s could also afford their own car and apartment.) Today, college students need to get deeply into debt and have their parents help pay their tuition; students can barely afford to pay for food and beer on their own.

If the CPI is to be believed, Americans today have about the same standard of living that they had 40 years ago. However, all Americans can feel their standard of living decline. The CPI today no longer accounts for the cost to maintain the same standard of living, it accounts for only the cost to stay alive.

The reason for April's slight decline in year-over-year CPI growth compared to March is declining oil prices due to a temporarily strong U.S. dollar. There is now a record amount of investors who are short the Euro, which has given the U.S. dollar the artificial appearance of being a "safe haven." Due to the rallying U.S. dollar, the Federal Reserve believes it has a license to print and keep interest rates near zero. NIA believes this short-term rally in the U.S. dollar will set the stage for a huge crash in the U.S. dollar sometime in late 2010.

NIA is very pleased that Rand Paul has just received the Republican nomination for U.S. Senate in Kentucky. One of NIA's predictions for 2010 was that he would not only win the Republican nomination, but win the Senate seat. Rand Paul is now half way there and we must strongly support him in the general election this November. We must also continue to support Peter Schiff for the Republican nomination in Connecticut. The Senate primary in Connecticut will take place on August 10th and we believe Peter Schiff is the only candidate who fully understands the devastating effects of inflation and the need to rein in government spending.

Former Federal Reserve Chairman Paul Volcker is now admitting that time is "growing short" for the U.S. to address its budget deficit and yesterday said "there are serious questions, most immediately about the sustainability of our commitment to growing entitlement programs." Unfortunately, we believe the Obama administration will ignore Volcker's warnings and point to this phony U.S. dollar rally as an excuse to continue on with unconstrained government spending. By the time hyperinflation becomes apparent to all, it will be too late to prevent our dollar's purchasing power from being completely wiped out. Hopefully enough Americans will become educated about the need to become their own central bank by buying gold and silver, so that after hyperinflation occurs, we have enough resources to rebuild our country.

Please continue to spread the word about NIA by telling your friends and family to subscribe for free at: http://inflation.us

About us:

The National Inflation Association is an organization that is dedicated to preparing Americans for hyperinflation. The NIA offers free membership at http://www.inflation.us and provides its members with articles about the economy and inflation, news stories, important charts not shown by the mainstream media; YouTube videos featuring Jim Rogers, Marc Faber, Ron Paul, Peter Schiff, and others; and profiles of gold, silver, and agriculture companies that we believe could prosper in an inflationary environment.

Contact: Gerard Adams, 1-888-99-NIA US (1888-996-4287), [email protected]

SOURCE National Inflation Association

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