More experts are saying what most Americans have suspected for years - the real inflation rate is much higher than the government is willing to admit.
Officially, the U.S. Bureau of Labor Statistics (BLS) says the inflation rate, or Consumer Price Index (CPI), for 2011 was 3%.
But a report issued last week by the non-profit group American Institute for Economic Research (AIER) says the U.S. inflation rate for 2011 is far higher - 8%.
AIER used criteria based only on common daily expenditures to more accurately reflect how inflation affects consumers. Their index excluded less-frequently purchased items, like automobiles.
Economic consultant John Williams, an outspoken critic of the government's economic statistics, contends things are even worse.
Using the government's old methodology from 1980 - before politicians started to monkey with the formula - he calculates the real inflation rate is north of 10%.
That's more than triple the government's figure.
Among the few in government who see this as a problem is Republican presidential candidate Rep. Ron Paul, R-TX.
"You know this argument that the prices are going up about 2%, nobody believes it," Paul bluntly told U.S. Federal Reserve Chairman Ben Bernanke during a hearing last week. "People on fixed incomes - they're really hurting, the middle class is really hurting because their inflation rate is very much higher than the government tries to tell them and that's why they lose trust in government."
Changes to the Real Inflation RateOver the years, the government has made a series of adjustments to how it calculates the CPI, ostensibly to make it more accurate.
However, critics like Williams say the inflation rate formula has been changed to serve political ends.
All You Need to Know About Iran, $200 Oil, and $6.00 Gas
If you're unsettled by the thought of gasoline at $4.00 a gallon, brace yourself.
With tensions between Iran and the West quickly escalating, we could see gas jump to $6.00 a gallon at the pump in a matter of months.
Make no mistake about it: If Iran were to follow through on its threats to close the Strait of Hormuz, oil prices would surge as high as $200 a barrel in matter of days.
But that's just the beginning...
A wider Iranian war could throw the entire region into chaos -- making $100 oil seem like a bargain.
None of this is hyperbole. In fact, these dangers are likely according to of one of world's leading energy analysts, Dr. Kent Moors.
Dr. Moors is an advisor to six of the world's top 10 oil companies, including natural gas producers throughout Russia, the Caspian Basin, the Persian Gulf and North Africa. He also consults for high-level officials from the U.S., Russian, Kazakh, Bahamian, Iraqi and Kurdish governments on all things energy related.
In short, Kent's insights are invaluable.
That's why we've given Dr. Moors a chance to address all of the concerns swirling around the energy market today.
In the interview that follows you'll learn what you really need to know about Iran, the global oil market, and most importantly, what you can do to profit...
Dr. Kent Moors on the Brewing Crisis in the GulfQ) Dr. Moors, how serious are the recent developments in Iran?
Moors: This is the most serious U.S.-Iranian crisis since the fall of the Shah in 1979. There's a very dangerous situation inside Iran that is only being accentuated by the oil market problems that have resulted from Western sanctions.
First off, on the Strait of Hormuz: This is the most significant oil choke point in the world. Some 35% of the world's seaborne oil shipments and at least 18% of daily global crude shipments pass through this narrow channel in the Persian Gulf. And while the Iranian Revolutionary Guard Navy is not large enough to blockade the Strait of Hormuz for any length of time, it could disrupt traffic.
Q) What effect would closing the Straits of Hormuz have on oil and gas prices?
Moors: Closing the strait would result in a rise in crude oil prices of between $20 and $40 a barrel in a matter of hours. Any interruption beyond 72 hours would push prices to between $150 and $200 a barrel.
As far as gas prices are concerned, the basic rule of thumb is that each $1.00 rise in a barrel of oil results in a 3.2-cent rise in a gallon of gasoline. So $200 oil would equal $6.00-plus gasoline.
Q) Why is this crisis unfolding right now?
Moors: Three major elements are causing Iran to become belligerent:
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