In 2008 not only was the economy brought to its knees but the entire financial system was on the verge of collapse. For seven years now it’s been on life support. We found out again this afternoon from the Fed’s FOMC notes that it will remain so. Immediately after reading the notes the financial media again began their kabuki debate about when the Fed will raise rates. There has been no recovery.

The illusion of a recovery has been created and constantly served up to the public by the government’s lies massaged statistics and their propaganda wing, the controlled and scripted mainstream media.

The Fed’s shell game of “new money out of thin air” pumped into the banks and what used to be markets have kept interest rates artificially suppressed. Low rates while maintaining the status quo have been punishing savers and forcing them into higher-risk investments.

Am I the only one who gets pi$$#@* each month when I see how tiny the interest income on our savings is? So, into the rigged casino market for some yield, but watch those fees, must be held for 90 days, capital gains taxes………….blah, blah, blah.

You are being robbed.

Stock Market Bubble

The pumped-up stock market while evidence of inflation in asset prices helps create the illusion of a recovery especially for those simpletons who simply look at their 401K balances.

The information is out there if you care to look for it.


They like to use the drop in the unemployment rate and job growth as a measure of their success. We’ve covered in many posts how they simply don’t count people. For example, if you’re out of work and have not had an interview in the past four weeks – you are not counted as unemployed, you’re simply “out of the work force”. If you lost a well-paying job and are now working 2-3 part-time jobs they count those as 2-3 jobs in the jobs-created column. A simple dig into the real numbers also shows that not only have the majority of jobs created been part-time but are filled by people 55 or older. Again, no interest income means dreams of retirement are put on hold.

John Williams of when calculating the unemployment rate the way it was counted in 1992 arrives at a real number closer to 25% than it is to 5.3%.


You’d think that the lowest interest rates in the history of fractional reserve banking would lead to a real estate frenzy. They have not. Like stocks, there has been no real price discovery in Real Estate. You hear buzzwords on CNBC like “low inventory”. One reason for this is banks have held foreclosures off the market. Thus far this has kept prices afloat and like the inflated stock market gives people the illusion of the wealth affect.

A dig into sales figures has shown that most have been cash buyers, meaning banks and investment firms go in and scoop up homes to rent, which is also causing rents to rise. A look into “housing-starts” also shows that most of them are for multi-family dwellings, aka: apartments.

Homeownership Drops To 48 Year Low; Median Asking Rent Soars To All Time High

GDP & Inflation

We have shown how the government simply moved the goalposts and tweaked the formulas once the GDP numbers started looking ugly. Their methods are two-fold. The first is to simply change the formula and seasonally adjust and re-adjust it until the result sounds better.

The US Department Of Commerce Will “Double Seasonally Adjust” GDP Data

Aside from that we arrive at the main topic of this post, finally and that is the phony Inflation Rate. Technically inflation is an increase in the money supply which will fundamentally lead to higher consumer prices, in today’s vernacular it has also come to mean “higher prices”.

The Fed keeps telling us inflation is under 2%. Why do they lie about maintain this? Well first, it keeps a lid on “cost-of-living” increases for Social Security payouts (which is now 33% underfunded) and the like. Secondly, a lower inflation deflator has a softer impact on their concocted GDP figures.

Surely if you have been whistling along thinking everything is “back to normal” you at least notice something smelling fishy at the grocery store. Hasn’t your weekly bill gone up more than 2%? Have you noticed that you can almost fit a box of cereal in your pocket? If prices don’t go up servings get smaller, this is known as shrinkflation.

Certainly, you’ll notice inflation when you send a child through college, but that’s for a whole post unto itself.

The Chapwood Index

Recessions can be easily eliminated by adjusting the inflation as we have been doing for decades.

US inflation numbers are completely fake – so real US GDP is much, much lower:

The Chapwood Index for 2014 was 9.7% and official CPI in the land of the free was only 0.8%.  So the Nominal GDP of 5.6% for 2014 becomes real GDP of -4.1%.

The revised real GDP for years 2011 to 2013 worked out to -6.2%, -6.5%, -6.5% respectively.

What is the Chapwood Index?

The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation.”


It exposes why middle-class Americans — salaried workers who are given routine pay hikes and retirees who depend on annual increases in their corporate pension and Social Security payments — can’t maintain their standard of living. Plainly and simply, the Index shows that their income can’t keep up with their expenses, and it explains why they increasingly have to turn to the government for entitlements to bail them out.

It’s because salary and benefit increases are pegged to the Consumer Price Index (CPI), which for more than a century has purported to reflect the fluctuation in prices for a typical “basket of goods” in American cities — but which actually hasn’t done that for more than 30 years. 

The middle class has seen its purchasing power decline dramatically in the last three decades, forcing more and more people to seek entitlements when their savings are gone. And as long as pay raises and benefit increases are tied to a false CPI, this trend will continue. 

The myth that the CPI represents the increase in our cost of living is why the Chapwood Index was created. What differentiates it from the CPI is simple, but critically important. The Chapwood Index:

  • Reports the actual price increase of the 500 items on which most Americans spend their after-tax money. No gimmicks, no alterations, no seasonal adjustments; just real prices.
  • Shines a spotlight on the inaccuracy of the CPI, which is destroying the economic and emotional fiber of our country.
  • Shows how our dependence on the CPI is killing our middle class and why citizens increasingly are depending upon government entitlement programs to bail them out.
  • Claims to persuade Americans to become better-educated consumers and to take control of their spending habits and personal finances.

The inaccuracy of the CPI began in 1983, during a time of rampant inflation, when the U.S. Bureau of Labor Statistics began to cook the books on its calculation in order to curb the increase in Social Security and federal pension payments. 

But the change affected more than entitlements. Because increases in corporate salaries and retirement benefits have traditionally been tied to the CPI, the change affected everything. And now, 30 years later, everyone knows the long-term results. Ask anyone who relies on a salary or Social Security or a pension and he’ll tell you his annual increase in income doesn’t come close to his increase in expenses. What comes in is less than what goes out — a situation that spells disaster for average Americans.

“The data solidly supports what many Americans have suspected for years,” says the Chapwood Index’s founder, Ed Butowsky. “The CPI no longer measures the true increase required to maintain a constant standard of living. This is the main reason that more people are falling behind financially, and why more Americans rely on government entitlement programs.”

Butowsky began calculating the Chapwood Index in 2008. Using social media, he surveyed his friends across the country to determine what they bought with their after-tax income. He narrowed the list down to the most frequent 500 items and asked his friends in America’s 50 largest cities to check the prices on those items periodically. The Index shows the fluctuation in each city in the cost of items such as:
Starbucks coffee, Advil, insurance, gasoline, sales and income taxes, tolls, fast food restaurants, toothpaste, oil changes, car washes, pizza, cable TV and Internet service, cellphone service, dry cleaning, movie tickets, cosmetics, gym memberships, home repairs, piano lessons, laundry detergent, light bulbs, school supplies, parking meters, pet food, underwear and People magazine.

The Index forces middle-class Americans to recognize that their dependence on income increases pegged to the much-lower CPI virtually guarantees that they will run out of money before they die, because people are living longer and there is a huge difference between the CPI and the real world.

As an example, the CPI rose 0.8 percent in 2014. But in Boston, the Chapwood Index shows that the real cost of living increase was 10.7 percent. This means that if you work in the Boston area and got an 0.8 percent raise in your salary, it wasn’t nearly enough to cover the increase in your day-to-day expenses.

It was especially bad in San Jose, CA , where the Chapwood Index shows a 13.7 percent rise in the cost of living. Even the city with the lowest increase, Colorado Springs, CO , showed a 6.6 percent rise, a 5.8 percent higher than the CPI.

So, wherever you live, you showed a higher income. But at the end of the year, you spent all of it — and more.

“The unintended consequence of the CPI is that people who depend on Social Security and pensions don’t get what they need,” Butowsky says. “Our hope is that people will review the Index, see what the real cost of living is where they live and understand that it leaves them exposed, and consult with a financial adviser to plan for the future.”

• source:

Lies, Damned Lies, & Inflation Statistics

Inaccurate Statistics And The Threat To Bonds

US Economy Grew Less Than Expected In Q2: Worst Economic Recovery Since WWII Revised Even Weaker

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7 thoughts on “The Books Are Cooked•The Chapwood Index Unveils Real Numbers”
  1. “It exposes why middle-class Americans — salaried workers who are given routine pay hikes and retirees who depend on annual increases in their corporate pension and Social Security payments — can’t maintain their standard of living.”

    I’m on social security and over the last five years, I have been telling friends my costs to live have gone up and up until I no longer have anyway to save money back for emergencies.

    So this cost of living chart is no surprise to me, and I’m sure it’s no surprise to people like me!

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