China's Rise and the New Age of Gold: How Investors Can Profit from a Changing World

18

The Impact of Hidden Inflation

AS INEQUALITY IN the United States has widened, most Americans increasingly have struggled to keep afloat. Making this effort even harder is something that hasn’t gotten much attention. It’s that inflation has risen more than the official Consumer Price Index (CPI) figures indicate and in ways that hit hardest at those with the least to spend.

In Chapter 16, I noted that after Paul Volcker conquered inflation back in the 1980s, inflation has remained low ever since, underpinning the second postwar bull market. And this is true—as long as you’re looking at the CPI. But the CPI number doesn’t tell the whole story. A look at how it’s derived makes it clear why it’s misleading, understating actual increases in ...