(Commentary) Ron Paul: End the Fed and Get More Doritos – By Ron Paul (CNS News) / March 25, 2022
The U.S. government’s Consumer Price Index indicates prices have increased 7.9 percent between February 2021 and February 2022. While this statistic shows the highest rate of increase in 40 years, it still understates the amount prices have increased, in part because the statistic is manipulated to minimize reported price increases.
A stealth form of inflation is “shrinkflation.” Shrinkflation occurs when businesses reduce the size of a product so its price can stay the same. For example, Frito-Lay recently began putting fewer chips in a bag of Doritos, reducing the weight of a bag about five percent from 9.75 ounces to 9.25 ounces in the process. Of course, charging the same for less is a type of price increase.
In late March, the Federal Reserve increased the interest rate by .25 percent. This increase, it said, is a step in combating inflation. The Fed also announced that it plans to raise rates six more times this year. However, even if the Fed follows through on this plan, rates will only increase from near zero to around 1.9 percent. This is unlikely to effectively combat inflation. The Fed also indicated a commitment to reducing its almost $9 trillion balance sheet, although its official statement did not specify details such as when the Federal Reserve would start reducing holdings.
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