Gasoline, up 50% in one year. Housing, up 12% nationwide. Medical insurance, up 17%. Natural gas, up 70%.

     These are the major items in most people’s budgets. So how can price inflation be under 4%, as the Federal Reserve claims?

     The answer: Fed inflation figures are lies.

     Many of us have known that for a long time. But now it's official!

     The Federal Reserve has announced that effective March, 2006, they will no longer report M3 money supply statistics. ("Coincidentally", March 2006 is the same month that Iran will stop accepting dollars in payment for their oil, and instead require payment in Euros.)

     Since the Fed was created in 1913, M3 has been the most widely-used and most accurate measure of the U.S. money supply – which in turn is one of the major factors in price inflation. M3 includes currency and checking accounts (M1), plus savings deposits, CDs and money market funds (M2), and large-denomination savings deposits and institutional money-market funds.

     In general, the faster the Fed increases the money supply, the higher price inflation. While the government was claiming under 4% inflation in 2005, the Fed was actually increasing the money supply by 14% a year annualized, according to Dr. Robert McHugh of Main Line Investors, Inc. Also "coincidentally": "Over the past few years, no less than six Federal Reserve Regional Bank Presidents have resigned," Dr. McHugh reports.

     But it gets even worse. Next year, this time, we may fondly remember the "good old days" when inflation was a "mere" 14% a year. In mid-December, the Fed began increasing the money supply at an annualized rate of 24-30%! (During the first two weeks in December, the Fed added $93.5 billion to the money supply, a 24% annualized rate).

     If this keeps up – and there is every reason to believe that it will – the real rate of inflation in the U.S. could soon be over 20%. However, the Fed will be able to deny everything, because M3 will officially no longer exist!

     What does that mean for you? The price of everything you buy will soar in 2006. The value of your savings will sink in real terms. Finally, you will need to get 20% annual returns from your investments and 20% annual salary increases, just to break even!

     But since there will be no more official reporting of the total U.S. money supply, government officials will be able to say with a straight face how great our economy is doing since the stock market, retail sales, corporate profits, even many salaries are all up a huge 5-10%!

     In other words thanks to the Fed's planned deceit, everything will be officially getting better and better, while living standards plummet.

To view back issues of Jarret Wollstein's Towards Liberty, Click here.