Disguising the Dollar's Collapse with Prosperity

Pinnacle Digest writes: Frezza removes the inflation blinders to expose the Wall Street Journal in a number of flawed articles, which credit rising prices to increased prosperity in America.

The media has been attempting to stir up positive sentiment in respect to the recovery for months now and it is has finally come to a head.  Frezza reveals the fact that home prices nationally are only up 2.1% since last July. But, with headline inflation running at 3.2% this means that inflation-adjusted housing prices are actually dropping. Falling housing prices are a signal that we should be building fewer homes, at least until the glut of unsold inventory clears.

The Wall St Journal recently published two articles, which are the focus of Frezza's insights, titled and linked below:

“Home Prices Rise in July”

“Consumers Back to Feeling Flush.”

Frezza, never one to miss an opportunity to deliver the truth in its bluntest, most comedic form, stated, "If you stopped reading at the end of each lede—choking your way through the shameless Obama plug before throwing in the towel—you might believe that the economic witch-doctors in Washington have finally started to deliver on their promised magic."

Upon further reading, which we encourage you to do, one realizes it is a simple play on numbers and that rising costs and inflation are the drivers behind any false sense of increased wealth.

The article points out that average household income rose 1.9% before taxes in 2011. So after inflation, consumers’ purchasing power went down by 1.3%, plus whatever was gobbled up by the tax man. The author of the article in focus concludes that, “The report is further evidence that Americans' finances are slowly recovering.”

If you have any toddlers in the house they can do the math for you on the above. There can be no recovery when inflation increases exceed income increases.

Frezza's favorite quote from the articles:

“The Labor Department said all major areas of spending rose last year, with the biggest jump, 8%, seen in transportation. Spending on gasoline and motor oil rose 25% in 2011, mostly because the price of gasoline climbed 26.4%.”  

The punch line is that the Bureau of Labor Statistics does not calculate energy into their inflation statistics. Frezza reminds readers that inflation is a time-honored technique governments use to repudiate sovereign debt. The role that the press and pundits play in trying to create an illusion of prosperity before an election has gotten out of control. Focusing on the facts to form your own opinion is more important now than ever. Frezza, "expects the newspaper that has a tradition of sound financial analysis—and of confining its editorials to the editorial page—to see through this chicanery, not contribute to it."



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