http://www.financialsense.com/fsu/ed...

"...The USGovt reported CPI is the biggest elaborate joke ever played upon the US public. Its purpose is to minimize Social Security annual increases, to limit federal pension lifts, to offer low phony inflation adjustments to many other statistics like economic growth (GDP), and to maintain a charade for selling USGovt debt wrapped in USTreasurys at low yield. The divergence of the CPI from reality is a story in itself.

Rely upon the Shadow Govt Statistics measures in what follows. They remove nonsense, gimmickry, false lifts from corrupt hedonic adjustments. The USGovt figures are the most corrupt in the world, of any nations. The SGS folks offer a shadow of great value. Below, the true Consumer Price Inflation is shown as raging near 12%, as its divergence from the baseline false statistic is widening steadily. This means the cost of borrowing money at the Fed Funds 2.25% rate is over 9% lower than the CPI. So money really costs MINUS 9%, which breeds speculation, and rewards it heavily. This differential is astonishing in its magnitude. Borrowing money is not only incredibly cheap, it will soon be even cheaper. Both ends will pull the differential wider, even lower rates and even higher CPI in future months. The USFed is not finished cutting interest rates, as conditions will keep it responding in desperate fashion on the defensive. The valid CPI figure is still trending up. By year end 2008, possibly the Real Cost of Money in the US might Minus 12%. That fuels speculation and a broad attempt to seek effective inflation hedges in protection. And speculators like energy and precious metals traditionally. It is a no-brainer!"