End the Fed and Get More Doritos
The US government’s Consumer Price Index indicates prices have increased 7.9 percent in the last year. While this statistic shows the highest rate of increase in forty years, it still understates the amount prices have increased, in part because the statistic is manipulated to minimize reported price increases.
A stealth form of inflation is “shrinkflation.” Shrinkflation occurs when businesses reduce the size of a product so its price can stay the same. For example, Frito-Lay recently began putting fewer chips in a bag of Doritos, reducing the weight of a bag about five percent from 9.75 ounces to 9.25 ounces in the process. Of course, charging the same for less is a type of price increase.
This week the Federal Reserve increased the interest rate by .25 percent. This increase, it said, is a step in combating inflation. The Fed also announced that it plans to raise rates six more times this year. However, even if the Fed follows
Article from Mises Wire