Why 2% is the "target" inflation level:

[Matt Collins]

https://www.youtube.com/watch?v=UN-O6oNes0I

[Bern]

...
You can also use the rule of 72 for expenses like inflation or interest:

If inflation rates go from 2% to 3%, your money will lose half its value in 24 years instead of 36.
...

https://betterexplained.com/articles/the-rule-of-72/

[ClaytonB]

The Book of Seigniorage, Chapter 2 verses 9 through 21:

"O Lord, bless this thy Central Bank... And the Lord spake, saying, 'First shalt thou set the Holy Target Rate. Thou shalt count to two, no more, no less. Two shall be the number thou shalt count, and the number of the counting shall be two. Three shalt thou not count, neither count thou one, excepting that thou then proceed to two. Four is right out. Once the number two, being the second number, be reached, then shalt thou rest from all thine labors."

[Swordsmyth]

Because that level of theft is as high as is sustainable.

[ClaytonB]

Because that level of theft is as high as is sustainable.

Oh no, they devalue the currency at a much faster rate than 2% per year. Something more like 15-ish percent when they started QE, and around 7% average in recent memory. All while telling us that inflation is "2-3%". One only need go to the grocery store or gas station to get a wakeup call as to the real rate of inflation. Last year alone, rents and house payments skyrocketed. I got two sequential 10% YoY rent increases. That's not "2-3%" or even close.

[Krugminator2]

Oh no, they devalue the currency at a much faster rate than 2% per year. Something more like 15-ish percent when they started QE, and around 7% average in recent memory. All while telling us that inflation is "2-3%". One only need go to the grocery store or gas station to get a wakeup call as to the real rate of inflation. Last year alone, rents and house payments skyrocketed. I got two sequential 10% YoY rent increases. That's not "2-3%" or even close.

I don't get the fetish of making up inflation numbers that are ridiculously easy to prove false. Inflation was never 15% after QE1 started Not even close. More like 1-2%. If inflation averaged 7% after 2008 prices would have more than doubled by the start of Covid in 2020. Which they didn't. Just pull up a price chart all the listed commodities. https://finviz.com/futures_charts.ashx?p=m1

Right now no one (except a few free market economists) is saying inflation is 2-3% and likely to drop. The official numbers peaked at 9% and are currently 6.4%

Here is the reality. "They" systematically overstate inflation. The government is lying but in the other direction than you think to make it look like the economy has grown more slowly than it actually has.

Inflation is Even More Inflated Than We Thought https://www.econlib.org/archives/201...ion_is_ev.html

[oyarde]

If we ever get back to inflation under 4 without crashing the economy I'll be impressed . Of course the GDP is going to continue to suck no matter what.

[ClaytonB]

I don't get the fetish of making up inflation numbers that are ridiculously easy to prove false.

"Prove" using what? Fed numbers? Don't be ridiculous.

The real problem is not the amount of inflation, the problem is the inflation itself. Any expansion of the fiat money supply at a rate greater than 0% is criminal and the responsible parties should be hanged.



Let's explore the ways that the Fedgod fakes its fraudulent "facts".

Fraud #1: "Inflation is a general rise in prices"

This is false. Inflation may manifest as a general rise in prices, or it may manifest as prices staying the same when they would otherwise have fallen, or falling less than they otherwise would have. The "otherwise", here, refers to the central bank issuing new money. Prices may undergo a secular decline of 1% that would otherwise have been a secular decline of, say, 5%, if the central bank had not issued the money that it did.

See: Defining Inflation and Is Inflation about General Increases in Prices?.

Fraud #2: "Price measures value"

This is also false. Comparing prices over any considerable stretch of time is not automatically meaningful. Futures speculators make (and lose) money by making predictions on the future prices of goods. So, the price of a Big Mac today has practically no meaningful connection to the price of a Big Mac in 1990. The Fedgod knowingly utilizes this fact to manipulate the CPI by discounting goods based on what they call "hedonic regression". A monitor that costs $500 but has 4 times as many pixels as a $500 monitor 3 years ago, is actually $75 for the same number of pixels. Thus, the actual price of monitors (per this reasoning) has been cut from $500 to $75. There are countless absurd con-artist tricks like this that are used to invent numbers out of thin air. An $8 Big Mac with a meat patty that is half the thickness of an $7.75 Big Mac one year ago is not "3% inflation." The price of a good does not tell you what the value of that good is and just comparing SKUs is not an apples-to-apples comparison, as any tax-accountant would know. The government would not fall for such tricks if a business were to relabel all its inventory placing two items in each box instead of one, while keeping the SKU number the same, thus "halving" their inventory. But these are precisely the kinds of criminal accounting tricks that the Fed is playing constantly.

See: The Illusions of Hedonics

Fraud #3: "Inflation is a single number"

Since 2007 when my eyes were opened to the truth of how the Fed works and how it is a criminal operation that is stealing from the American public on an industrial scale that truly staggers the imagination, it has been interesting to watch the patterns of markets moving up and down as the Fed keeps spinning its bubble from one sector to the next to the next, all while saying "average inflation is not too bad! The worst predictions of the doom-and-gloomers didn't come true!" Housing prices skyrocketing is just "a hot sector" and so should not be allowed to pollute the general CPI, right? And so that's how the scam works, you just keep moving the inflation bubble from one sector, to the next, to the next, all the while saying that "this is not secular inflation, so a 20+% spike in home prices doesn't really count, people just really really like houses a lot now."

In fact, inflation affects all sectors of the economy in a non-uniform way. The final "inflation number" is extremely political and the hucksters in the Fed have already gamed every possible way to make that number seem lower than it really is. They have been extremely effective; "the number" is surely off by a factor of 2-3 on a secular basis. Real inflation is easily double or triple the headline "CPI" "number".

See: The Many Failures of the CPI and More Lies in the CPI

Fraud #4: "CPI can be measured as a basket of goods"

The CPI is, in itself, a fraudulent index. Everything about it is fraudulent, top-to-bottom. There is no "average basket of goods" of a "typical American household". And this illusion is the key to defining that politically all-important "CPI Number" that supposedly determines "the real rate" of inflation. There is only one real rate of inflation: the rate at which the central bank is issuing new money!!

Many more frauds can be listed, but this should be enough to convey some of the biggest issues with the CPI "fact" aka CPI fraud.

---

Further references:

The Origins of the 2 Percent Inflation Target

Inflation, Quick and Dirty

Don't Believe Those Inflation Numbers

What Has Government Done to Our Money?

[Swordsmyth]

Oh no, they devalue the currency at a much faster rate than 2% per year. Something more like 15-ish percent when they started QE, and around 7% average in recent memory. All while telling us that inflation is "2-3%". One only need go to the grocery store or gas station to get a wakeup call as to the real rate of inflation. Last year alone, rents and house payments skyrocketed. I got two sequential 10% YoY rent increases. That's not "2-3%" or even close.

I'm aware they lie about it.
But the level of theft that they lie and say is 2% is the optimal amount for long term theft, it also make the public think it is minimal and able to be ignored.