By Big Government For Big Government, by MN Gordon

Inflation is a tool of big government. From MN Gordon at economicprism.com:

One of the notable byproducts of the current age of unreason is the popularity of lies as a matter of public policy.  We’ll clarify this claim in just a moment.  But first, some context is in order…

On Wednesday, the Bureau of Labor Statistics reported that the Consumer Price Index (CPI) increased 0.3 percent in January.  Not bad, so long as you didn’t have to drive anywhere.  If you did, you may have noticed your dollars didn’t get you as far.  The gasoline index increased 7.4 percent in January.

What’s going on?

Over the last 10-months the price of oil has quietly recovered from an extreme negative in April of 2020 to over $58 for a barrel of West Texas Intermediate (WTI) crude.  And the UN Food and Agriculture Organization’s food price index is at its highest level since July 2014.  The main factors contributing to its rise are increases in grain prices.

Our hunch is that consumer prices will rise much further and faster in 2021 than the bean counters at the Bureau of Labor Statistics anticipate.  In the interim, manufacturers of consumable products can mask price inflation by reducing product size, while keeping price the same.  The ruse of shrinkflation is not new to the marketplace.  However, when governments over issue their currency it becomes much more prevalent.

Just last week, for instance, Nutella confirmed that it will reduce its 400 gram jars to 350 grams due to rising production costs.  But that’s not all.  In 2020, packages of Nathan’s Pretzel Dogs were reduced from five hotdogs to four.

Other common products that shrunk in 2020 include: Downey Unstoppables (10 oz to 8.6 oz), Charmin Ultra Strong (286 sheets to 264), Dawn (small bottle, 8 oz to 7 oz), Lay’s Potato Chips (party bag, 15.25 oz to 13 oz), Keebler Club Crackers (13.7 oz to 12.5 oz), Charmin Mega roll (reduced by 20 sheets), Powerade (32-oz to 28 oz), Puffs (56 tissues to 48), and Hershey’s kisses (family size bags reduced from 18 oz to 16 oz).

Of course, manufacturers are just playing the hand they’ve been dealt.  They know consumers are more likely to limit purchases due to a rise in price verses a reduction in weight.  They’re merely reacting to the rising price of raw goods and materials.  But what’s driving this?

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