Hidden Inflation: Energy Efficient Light Bulbs

Potato Chip Inflation
Potato Chip Inflation – 2 oz less for your family

Food and energy are things everyone needs that are highly susceptible to inflation, which is why both are excluded from core inflation statistics (PCE) that are routinely presented by the MSM.  Inflation does not always mean prices go up however.  Sometimes, producers can give you less product for the same amount of money, giving the perception that prices have not changed.  We don’t notice we’re getting less for our dollar because the bag of chips is the same size as it always has been, but there are actually less chips in the bag.  While some tricks to hide inflation are obvious, such as smaller packaging (or small contents in the packaging), others are more deceptive and sinister.  The push to ban incandescent light bulbs is the deceptive sort, where politicians use environmental concerns to hide the price inflation of electricity.

Almost in unison, governments around  the globe have begun limiting or phasing out incandescent light bulbs in favor of energy efficient light bulbs. When this sort of legislation began, fluorescent light bulbs (CFLs) where the only mass-market option, and they continue to dominate more expensive LED bulbs.  The environmental argument is that we have to reduce energy consumption to save the planet from global warming.  But ask yourself: how does the planet benefit from the countless numbers of fluorescent bulbs, which contain mercury vapor, being broken and dumped in land fills? In fact, each CFL contains as much as 5 milligrams of mercury, a toxin which eats brain cells non-stop and cannot be removed from the body.

While researching this article, I found a number of government-funded sources claiming that we shouldn’t worry about mercury vapor from CFLs.  For example, Nation Geographic tries to blow it off as a non-issue.  In contrast, this video from the University of Calgary Faculty of Medicine Dept. of Physiology and Biophysics which shows how mercury causes brain neuron degeneration:

The mechanism of hiding inflation in energy efficient light bulbs

The real reason governments want to ban incandescent light bulbs in favor of toxic, mercury-filled CFLs is to hide increases in energy prices.  By forcing people to use less electricity, energy companies can charge more, while providing less.  Like the half-empty potato-chip bag, the total amount of your electric bill remains the same, but you’ve consumed less electricity.

Compact fluorescent light bulbs (CFLs) contain mercury.
Compact fluorescent light bulbs (CFLs) contain mercury.

Countries that have legislation to phase out or ban incandescent light bulbs include:

  • China
  • India
  • Philippines
  • Malaysia
  • Israel
  • The entire European Union
  • United States *
  • Canada
  • Cuba
  • Australia
  • New Zealand
  • Argentina
  • Brazil
  • Venezuela

How many of these countries are in a race to devalue their currencies?  Which ones have populations suffering from inflation that the government pretends doesn’t exist?

 

* In the US, you might think this is new legislation from Obama, but in fact George W. Bush signed the Energy Independence and Security Act (EISA) into law December 19, 2007. The EISA creates a de facto ban on incandescent  bulbs by requiring unrealistic, or unobtainable, efficiency standards for standard bulbs.

Dollar Devaluation since 1913

To devalue a currency, like the dollar, means that the value of the currency decreases. In the case of the dollar, we call this dollar devaluation.  The value of a currency is also referred to as purchasing power.  The more a currency is devalued, the less you can buy with it because the purchasing power decreases.

The graph below shows the purchasing power of the US dollar since 1913. 1913 is when the Federal Reserve, which is actually a privately-owned central bank, took over the US banking system. As you can see, it’s been pretty much downhill since the Fed took over.  In fact, the dollar has lost over 96% of its value.  That means today’s dollar would be worth less than 4 cents back in 1913. How much longer will the dollar maintain its reserve-currency status at this rate?

Dollar Devaluation 1913-2013
Dollar Devaluation 1913-2013

How does the Federal Reserve devalue the dollar?  By printing more money.  Printing more money causes monetary inflation.  That means there are more dollars in circulation, but just because there is more paper money floating around, that doesn’t mean value has been created.  All you really get is price inflation.  Here’s an extreme example: Let’s say the Federal Reserve just gave everyone in America $1 million.  Wouldn’t that be great if everyone in America became a millionaire over night?  Unfortunately, nothing would change, except prices would increase. Think about it.  How much would you have to pay the plumber to come to your house, if he’s already a millionaire?

Fighting inflation

Unlike paper money dollars, which can be printed out of thin air, gold does not lose value.  In fact, gold doesn’t really go up or down.  When gold goes up, it really means the dollar is going down and when gold goes down, it’s actually the dollar getting stronger (increasing its purchasing power).  So by keeping a portion of your savings in gold, you offset the losses of your dollar being devalued by the Federal Reserve and reckless government spending.  When you buy gold or other commodities that resist inflation, it’s called a hedge against inflation.