Now Introducing… Skimpflation!
Everybody knows about Shrinkflation… but have you heard about Skimpflation?
By now, pretty much everybody knows about inflation. It’s hard to miss at the gas pump or at the grocery store. Prices are up everywhere on just about everything.
The government says the official inflation rate is 8.6 percent. By that they mean that at the end of May, the average price on consumer goods was 8.6 percent higher that it was at the end of May 2021.
Since inflation is a monetary phenomenon, we prefer to describe it this way: It you had $100,000 in your mattress or in the bank for the last year, today it only buys you $91,400 worth of stuff.
The collapsing purchasing power of the dollar is easy to see in this chart from the Federal Reserve:
We, of course, think the government’s inflation number are way off. In fact, it has devised a number of ways to soft-pedal the real inflation rate.
We don’t feel sorry for the government taking the blame for inflation since it is the responsible agency. But we feel a tiny – very small – bit of sympathy for the businesses that have to pass higher prices along to their customers. Our sympathy for them is moderated by the knowledge that America’s largest businesses had the collective political clout to do something about the destruction of the dollar… if they had wanted to.
But they didn’t want to. Most thought inflation was either just a minor nuisance or an actual benefit to them in some way.
In any case, businesses have resorted to the incredible shrinking candy bar tactic to avoid being the bearers of bad price news. Today we call their practice shrinkflation. Trying to hide rising prices, manufacturers reduce package sizes. Cereal boxes look the same size on the shelf, but they’re narrower and hold less. Toilet paper rolls shrink.
But have you heard of skimpflation? It is like shrinkflation, but involves a deterioration in quality, instead of size. If a product once came assembled, now you have to assemble it yourself. It had a one-year warranty, now it may have only 90 days, or even no warranty at all. Furniture that was made with durable hardwood is now mostly particle board. Once upon a time a server brought food to your table. Increasingly now, you have to go pick it up yourself. Skimpflation.
A former Bank of England official describes it this way in The Guardian: “I remember it from many years ago: the price of socks remained the same and, as costs changed, the thickness of the sock changed. I don’t know how big a deal it [skimpflation] is … I’d ask a different question: to what extent does inflation measure things properly?”
Skimpflation or shrinkflation – either way, you get less for your money. Consumers need to realize that it reflects the currency being debauched by the monetary authorities.
Don’t let skimpflation or shrinkflation erode your standard of living. Don’t let inflation destroy your savings and your wealth. Speak with a Republic Monetary Exchange gold and silver professional today about a sensible plan to shift out of eroding currency and into the enduring money of the ages.