It turns out manufacturers have used this sneaky little trick for decades. Especially in the food industry.<\/p>\n
Candy bar makers are famous for shrinking the size of their product.<\/p>\n
Here\u2019s why they do it:<\/p>\n
As the costs of raw materials go up, manufacturers have three choices.
\n1. Keep product size and price the same (they lose profits)
\n2. Keep product size the same, but charge more
\n3. Keep price the same but reduce the product size<\/p>\n
Since they don\u2019t want to lose profits, and raising prices can drive customers away, they usually choose #3.<\/p>\n
Reduce product size (but don\u2019t lower the price).<\/p>\n
We looked at the price of Oreos going back to 1970, and found they\u2019ve been fooling consumers with this trick for at least 40 years now.<\/p>\n
One year they decrease the package size, but keep the price the same.<\/p>\n
The next year, they restore the larger package size, but also with a considerable price increase.<\/p>\n
This step-ladder approach to raising prices has taken the price per pound of Oreo cookies from $0.48 per pound in 1970 to $5.52 per pound in 2012.<\/p>\n
That\u2019s a 1050% price increase in 42 years.<\/p>\n
But that set off a new alarm for our research team.<\/p>\n
See, according to the US government Consumer Price Index (CPI), inflation has only increased 499% during that same time.<\/p>\n
This is clear evidence the government is under-reporting the true inflation rate.<\/p>\n
But it gets worse. Take a look at this chart below:<\/p>\n
<\/p>\n
![\"stock](\"http:\/\/www.apisbull.com\/images\/Oreo_Cookie_Inflation_Chart.png\")
<\/p>\n
<\/p>\n
The top black line is the real price of Oreos. The bottom gray line is the US government\u2019s idea of how much inflation has occurred.<\/p>\n
According to the government, Oreos should only cost $2.88 per pound today.<\/p>\n
They really cost over $5.<\/p>\n
See how close the two lines are together on the far left side of the graph?<\/p>\n
That means that back in the 1970\u2019s the government inflation rate was actually pretty accurate.<\/p>\n
Not anymore.<\/p>\n
Look how the \u201cgap\u201d between the two lines starts to increase after 1980.<\/p>\n
And notice how much the real price has shot up in just the last few years.<\/p>\n
The government data (bottom line) makes it look like inflation has leveled off since 2010.<\/p>\n
The Oreo line shows that REAL Inflation is not only increasing, it\u2019s accelerating.<\/p>\n
It\u2019s Not Just Oreo\u2019s<\/strong><\/p>\n The Oreo cookie inflation data is alarming, but let\u2019s face it. Oreo\u2019s don\u2019t make a very large portion of anyone\u2019s personal budget.<\/p>\n So we took a look at other consumer goods. Things like bread, milk, sugar, gasoline and a dozen other common items people use every day.<\/p>\n The results were stunningly similar.<\/p>\n And several tems showed far more \u201creal\u201d inflation than even the Oreo cookie example.<\/p>\n The conclusion? Higher inflation is already here \u2026 and it\u2019s only going to get worse.<\/p>\n So … Why Is Any of This Important?<\/strong><\/p>\n Once you see the signs of inflation, even if it is hidden, it tells you to make preparations.<\/p>\n Once inflation hits in visible form, panic will set in.<\/p>\n Right now, the US government says inflation is at 2.65%.<\/p>\n We know it\u2019s really much higher, but the general public isn\u2019t too concerned since the government number is so low.<\/p>\n But \u2026 the government can\u2019t hide true inflation forever.<\/p>\n Once they start reporting 10%, 15% \u2026 or 20+% inflation, panic will set in.<\/p>\n And it will come upon us much faster than most realize.<\/p>\n Noted economist Amity Shales puts it this way: \u201cSudden\u201d has happened to us before. In World War I, inflation went from 1% for 1915 to 7% in 1916 to 17% in 1917. To returning vets, that felt awful sudden.<\/p>\n
\nThe thing about inflation is that it comes out of nowhere and hits you. It\u2019s like sailing. You\u2019re gliding along, passing the peninsula, and you come about. Nothing. Then the wind fills the sail so fast it knocks you into the sea. Right now, the U.S. is a sailboat that has just made open water, and has already come about. That wind is coming. The sailor just doesn\u2019t know it.<\/p>\n