They Are LYING About Inflation

by Martin Armstrong,Armstrong Economics:

The government will never tell the truth about inflation because if they did, confidence would collapse. They always alter the formulas, revise the definitions, and pretend the economy is improving while the average person knows damn well something is seriously wrong. The April producer price numbers are simply confirming what anyone running a business already knows. Costs are rising across the board again and this time it is working through the production side of the economy where the damage becomes far more dangerous.

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Producer prices jumped 1.4% in April, the largest monthly increase since 2022, pushing annual wholesale inflation to 6.0%. That is not some isolated blip the talking heads on television can explain away with clever slogans. This is the type of inflation that bleeds through the entire economic chain because producers cannot absorb rising costs indefinitely. Eventually they pass everything directly onto the consumer because survival comes first.

This is what people fail to understand about inflation. It does not begin at the checkout counter. By the time consumers notice prices exploding, the inflationary wave has already moved through energy, transportation, raw materials, warehousing, financing, and manufacturing. The disease starts deep inside the production structure itself.

Energy was once again the primary culprit. Gasoline prices surged over 15% during the month while diesel fuel climbed sharply as tensions in the Middle East continue escalating. Every war in the Middle East eventually becomes an economic event because oil remains the lifeblood of industrial civilization no matter how many politicians pretend otherwise. You cannot sanction major producers, threaten shipping lanes, attack fossil fuels, and simultaneously expect stable prices. That is fantasy economics taught by people who have never run anything except deficits.