I have been convinced that Washington has been lying to us about inflation for a long time.  The government puts out a CPI report that annual nflation is only 1 or 2 percent, yet when you and I go to the store we know its a lot more.

Here is a great article by Larry Edelson from Uncommon Wisdom and Weiss Research that reveals what is really going on:

Washington, What are you smoking?

by: Larry Edelson

Our leaders in Washington are so detached from reality, I am thoroughly convinced that they are smoking something.

And I’m not talking about the insane amounts of spending that’s going on in our capital, or even about the patently unpayable debts and promises they’re making to all of us and our foreign creditors. Although I think these things, too, result from whatever drugs they’re on inside the beltway.

No, what I am referring to here is the way Washington manipulates its official statistics.

Consider the absurdly bizarre inflation figures Washington puts out each month.

Case in point: March’s Consumer Price Index (CPI) data. The so-called “core” inflation rate rose a modest 0.1%. So every politician on the Hill plus all the idiot Wall Street analysts grabbed onto that figure to proclaim that inflation is “dead.”

Inflation? “Not a problem” … “tame” … “easy to deal with” — those were some of the comments and headlines that came out after the figure was released.

Give me a break! No, give us all a break. Anyone with half a brain in their head can see that prices are going up all around them.

Here are just a few examples …

• The price of oil is up 14.9% since the first week of February
• Soybean prices are up 7.4%
• Cotton is up 20.1%
• Copper prices are up 13.1%
• Lumber prices are up a whopping 51.7%
• A gallon of unleaded gas is up 10.4% since February

Now, you tell me, is that 0.1% inflation? I don’t think so! The average price appreciation of the above, which are pretty much staple items, is almost 20%.

That’s even a bit higher than the action we’ve seen in the Commodity Research Bureau’s Index (CRB Index) of 19 widely-traded natural resources and commodities. According to the index, prices of raw materials are up nearly 8.5% since the beginning of February.

And that’s just recent figures. College tuitions are projected to increase into the double-digits in many cases for the 2010-2011 school year.

The cost of a first-class postage stamp increased 4.8% in 2009.

Moreover, where are the deals in hotel room rates … or in airline fares? I don’t see any. A junior executive suite at a 5-star hotel in Asia cost about $165 a night a few years ago. Today it runs nearly $500 a night.

I used to fly business class round trip from West Palm Beach to just about any big city in Asia for about $1,800. Now, a coach seat runs more than $2,000.

My auto insurance rates in the U.S. are up about 12% in the past year.  Health care costs are still exploding higher. Property taxes and a whole slew of other items are jumping like crazy all over the country.

Haven’t you had it with the people in Washington (and on Wall Street) that buy into the “no inflation” scenario. I mean, are they living on another planet? If not, perhaps they should be.

Or, perhaps they should all be sent to rehab to dry out from whatever drugs they’re on!

Meanwhile, the value of the U.S. dollars you get paid in … you invest in … you save in … continue to lose purchasing power as Congress spends even more money that doesn’t exist — until the Fed prints it up to cover their spending.

And that just means even more inflation is coming down the pike.

So I urge you — no, I implore you — do NOT buy into the low inflation B.S.!

If you do, the money you’ve worked so hard for will disintegrate right before your eyes. It will crumble in value, just like the U.S. dollar is inevitably going to continue to do …

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This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.

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