Is Inflation in the US Actually 16%? with John Williams of Shadowstats

Interview recorded - 24th of October, 2022

On todays episode of the WTFinance podcast I had the pleasure of speaking with John Williams, founder of ShadowStats, a website that calculates the “actual” inflation rate.

During our conversation we talked about what is wrong with our current measurement, why inflation may actually be 16%, whether gold moves with this measurement of inflation and more. I hope you enjoy! 

0:00 - Introduction
0:26 - What is wrong with our current measurement of inflation?
6:05 - Gold moving with inflation?
9:10 - When else did we experience this type of inflation?
11:35 - What was actual inflation like through the 2010’s?
13:00 - Any indicators to watch what real CPI might be in the coming months?
21:00 - How does the FED reduce Q1?
21:45 - Impact on precious metals
23:45 - One message to take away from interview?

Walter J. "John" Williams was born in 1949. He received an A.B. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth's Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies.

John has been a private consulting economist and, out of necessity, had to become a specialist in government economic reporting. 

One of his early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles. The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now GDP) as reported by the Department of Commerce.  Suddenly, their model stopped working, and they asked John if he could fix it. He realised the GNP numbers were faulty, corrected them for his client (official reporting was similarly revised a couple of years later) and the model worked again, at least for a while, until GNP methodological changes eventually made the underlying data worthless. 

That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present. For a number of years he conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and his results led to front page stories in 1989 in the New York Times and Investors Daily (now Investors Business Daily), considerable coverage in the broadcast media and a joint meeting with representatives of all the government's statistical agencies.  

Nonetheless, the quality of government reporting has deteriorated sharply in the last couple of decades. Reporting problems have included methodological changes to economic reporting that have pushed headline economic and inflation results out of the realm of real-world or common experience.

Over the decades, well in excess of 1,000 presentations have been given on the economic outlook, or on approaches to analyzing economic data, to clients—large and small—including talks with members of the business, banking, government, press, academic, brokerage and investment communities. John has also have provided testimony before Congress. 

John Williams - 

Shadowstats- http://www.shadowstats.com/
Twitter - https://twitter.com/shadowstats?s=21&t=Sfk6z767icOb135AC_Kx0w

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