Shadow Government Statistics, usually referred to as simply Shadow Stats, is a company that provides, “Analysis Behind and Beyond Government Economic Reporting.” And by and large, people who ought to know think they do a pretty decent job of gather information and grind it into data. But it is also conspiratorial. It claims to be a newsletter that “exposes and analyzes flaws in current US government economic data and reporting.” And it is the ultimate fallback source for those who claim that inflation is actually really high but the government is hiding it from you.
Let me say something about that “inflation is higher than the government claims” claim. Wouldn’t you notice? I mean, a Sausage McMuffin is one dollar. And a Sausage McMuffin has been one dollar since at least the last Bush administration. If inflation were really high, I would have noticed it. Everyone would have noticed it! Some things, like milk do go up and down in price. So do gas prices, but even that tends to be pretty stable. But there is no talking to some people. I think it mostly comes from libertarians and others who really believe in the gold standard. They want there to be high inflation so they can justify their preferred policy. But the fact remains that inflation in the United States has been far lower and less volatile than it was when we were on the gold standard. Really: I want to pull my hair out talking to these people.
Anyway, there is this guy Cullen Roche. He runs a financial research company called, Orcam Financial Group, LLC. So unlike Shadow Stats that seems mostly to appeal to cranks who have an ideological ax to grind, Orcam has customers who have actual money on the line and need good information. Thus, we have a bit of a conflict here. Back in 2011, Roche wrote, “Shadow Stats has been predicting hyperinflation for at least 6 years now and every year the forecast gets bumped to the next year.”
In that same article, he used the Wayback Machine to show that while the prices of some things might have gone up, the price for a subscription of Shadow Stats had not. In 2006, it was $175 per year. And in 2011, it was $175 per year. Well, two months ago, Roche was back, Update: There’s Still Deflation in Hyperinflation Forecasts. In it, he noted that it is now eight years and Shadow Stats is still $175 per year. I decided to graph it to look at the trend in the price:
Now, Cullen Roche is not serious and neither am I. Or at least, not especially serious. But let’s just imagine for a second that the inflation rate in the United States was 15% per year since 2006 when Shadow Stats began predicting hyperinflation. The $175 subscription price would now be the equivalent of less than $50—just over 25% of it’s original value. Or to put it the other way, if the price had kept up with this “real” inflation level of 15%, it would now cost over $500 for a subscription. So if John Williams (the owner and writer of Shadow Stats) really saw his cost of living increase at that rate (Much less 50% per month!) he would have increased the price.
But I’m sure that John Williams and everyone else knows intuitively that inflation isn’t high, because the cost of living is very much the same as it has been for a long time. Which of course, brings us back to Roche’s original complaint: that Shadow Stats (and all of the inflation hysterics) always say that next year the inflation will arrive. It’s like Linus after the Great Pumpkin doesn’t arrive, “Just wait until next year!” The only problem is that Linus is five years old and a cartoon character. I don’t know what excuse the Shadow Stats folks have.
H/T: Paul Krugman