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Calculating The Misery of Inflation

I was, unfortunately, sober enough to realize that I needed to get a lot drunker if I was going to withstand the horror of reading of even more economic fallout of the Federal Reserve’s disastrous decisions to create So Freaking Much Money (SFMM).

In particular, Michael Pento, in an essay in the Euro Pacific’s Weekly Digest newsletter, writes, “For the year 2010, the trade gap surged 43%, which was the biggest jump in a decade, as our government’s efforts to reignite consumer borrowing and spending led to a record number of imported consumer goods.”

I wince and moan, devastated by the very concept of a trade gap jumping by almost half in One Freaking Year (OFY), a situation where we bought more from foreigners than we sold to foreigners, thus many of the Fed’s trillions of new dollars flowed out of the US and into the world economy where it would produce its inflationary havoc, QED.

Mr. Pento is also one of the few to notice that “the Misery Index hit a 26 year high for 2010. The index – which is simply the addition of the unemployment and inflation rate – reached 11.29.”

And how bad is this? Well, he says, “You have to go all the way back to 1984 to eclipse such a level of pain. Only back then, inflation was calculated without the ‘benefit’ of the manipulations of the Boskin Commission. Therefore, the Misery Index should be, in reality, much higher than 11.29 and is probably closer to the pain we felt under Jimmy Carter.”

Well, as a guy who thinks that inflation in important prices (food, energy, etc.) is running at least 7%, and as a guy who has seen John Williams at shadowstats.com showing pretty convincingly that unemployment is really running at over 22%, this means that the Misery Index at 29 has NEVER been this high!

http://www.safehaven…ry-of-inflation

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