Today I noticed that several things I bought regularly have recently increased significantly in price (movie tickets, gas, sandwiches at a local luncheonette, chocolate, ice cream (increase masked in last case by reducing package size instead of increasing price)).
We all know that the government says inflation is low and has been for a long time, but this is because of a lot of cooking-the-books accounting tricks. I understand the political motivation behind making inflation appear low, and the political and administrative mechanisms by which it is accomplished.
What I DON’T understand is how the Fed can act like they believe the lies and the real danger is deflation. Is Bernanke an idiot or a tool? A lot of economists and financiers are theory-worshiping nerds who place too much faith in mathematical models with garbage data — but even a nerd should be aware that the data is being calculated on a different basis now and doesn’t mean the same thing.