A Lesson About Inflation From an Oreo Cookie Can Help YOU
Profit During the Coming Crisis
Governments mess around with inflation figures all the
time. They try to paint a rosy picture. But a little lesson from an Oreo
cookie tells a truer story. And it can make you very wealthy if you learn the
lesson…
I recently bought some Oreo Cookies for my 7-year old
to take to his baseball game as an after-game "treat."
I had done the same thing last year and knew there were
45 cookies in a package. Three rows of 15 cookies.
Since his team has 14 players, I knew I'd have a enough to give each kid 3
cookies … and even have 3 leftover for me!
Unfortunately, it didn't work out that way.
After giving 3 cookies to the first 13 players, I ran
out. I had a 7 year-old smiling up at me with his hand out, and nothing to
give him.
I'm looking down into the bag, digging around with my
hands. Nothing.
All the other kids were already munching their cookies
down, so it was too late to re-divvy.
Momentary panic was staved off by a nearby snack bar.
Kid #14 got an ice cream bar for his wait.
But I was still confused. Had I miscounted? Did I give
out too many cookies?
So I looked on the back of the package.
It read: Serving size 3 cookies. Servings per package
13.
39 total cookies.
What the…?!?
I was positive there had been 45 cookies in the package
the year before.
So, I did a little research. And what I discovered
turned my confusion into anger.
It turns out I was right. A standard sized Oreo cookie
package has always had three rows of 15 cookies, for 45 total in the package.
This year, however, they reduced the package size to 39
cookies.
That's 13.3% less cookies. But… here's the thing that
made me mad…
They were selling these smaller packages for the exact
same price as last year!
Six less cookies. Same price.
This is exactly what we teach Elevation Group members
in Lesson 7, "How To Profit From Hyperinflation."
The expert who teaches that lesson calls this
"hidden inflation" and … he says it's an early warning signal you
need to pay attention to.
Why? Because it is a known indicator for…
Much Higher Inflation Coming
It turns out manufacturers have used this sneaky little
trick for decades. Especially in the food industry.
Candy bar makers are famous for shrinking the size of
their product.
Here's why they do it:
As the costs of raw materials go up, manufacturers have
three choices.
- Keep
product size and price the same (they lose profits)
- Keep
product size the same, but charge more
- Keep
price the same but reduce the product size
Since they don't want to lose profits, and raising
prices can drive customers away, they usually choose #3.
Reduce product size (but don't lower the price).
We looked at the price of Oreos going back to 1970, and
found they've been fooling consumers with this trick for at least 40 years
now.
One year they decrease the package size, but keep the
price the same.
The next year, they restore the larger package size, but also with a
considerable price increase.
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 (using MSRP).
That's a 1050% price increase in 42 years.
But that set off a new alarm.
See, according to the US government Consumer Price
Index (CPI), inflation has only increased 499% during that same time.
This is clear evidence the government is
under-reporting the true inflation rate.
But it gets worse. Take a look at this chart below:
The top black line is the real price of Oreos. The bottom gray line is the US
government's idea of how much inflation has occurred.According to the
government, Oreos should only cost $2.88 per pound today.
They really cost over $5.
See how close the two lines are together on the far
left side of the graph?
That means that back in the 1970's the government
inflation rate was actually pretty accurate.
Not anymore.
Look how the "gap" between the two lines
starts to increase after 1980.
And notice how much the real price has shot up in just
the last few years.
The government data (bottom line) makes it look like
inflation has leveled off since 2010.
The Oreo line shows that REAL Inflation is not only
increasing, it's accelerating.
It's Not Just Oreo's
The Oreo cookie inflation data is alarming, but let's
face it. Oreo's don't make a very large portion of anyone's personal budget.
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.
The results were stunningly similar. And several items
showed far more "real" inflation than even the Oreo cookie example.
The conclusion? Higher inflation is already here … and
it's only going to get worse.
So … Why Is Any of This Important?
Once you see the signs of inflation, even if it is
hidden, it tells you to make preparations.
Once inflation hits in visible form, panic will set in.
Right now, the US government says inflation is at
2.65%.
We know it's really much higher, but the general public
isn't too concerned since the government number is so low.
But … the government can't hide true inflation forever.
Once they start reporting 10%, 15% … or 20+% inflation,
the public will panic. Stock markets will stumble. Financial stability will
crumble. And an economic disaster worse than 2008 will be upon us.
Here's what's scary. It will come upon us much faster
than most realize.
Noted economist Amity Shales puts it this way:
"The thing about inflation is
that it comes out of nowhere and hits you. It's like sailing. You're 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't know it.
"Sudden" has happened to
us before. In World War I, inflation went from1% for 1915 to 7% in 1916 to
17% in 1917. To returning vets, that felt awful sudden."
You Need to Take Action … the Sooner the Better Now is
the time to take advantage of inflation-hedged investments.
By the time government-reported inflation hits double
digits, it will be too late.
Elevation Group members have access to 5 different ways
to protect themselves from the coming inflation.
These strategies aren't just about "getting
by." They'll help you to really prosper … and even become incredibly
wealthy in the process.
Just one of those strategies has returned 363% since
2008 (and it's not gold, stocks or real estate).
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