As I sit here writing this essay, Mr. Mark Haines, Co-Host of CNBC's Squawk on the Street, is disputing the need to "seasonally adjust" economic data. Although he's out-numbered, three to one, he hangs in there and says, "Just give me the number, all I want is the truth."

Lots of luck buddy boy. Mr. Haines is not a flashy, financial kind of guy, often seen on CNBC. He's a lawyer by training and consistently challenges his co-workers and guests on the credibility of what they say and the data they present. When last Wednesday's durable goods data was spun around to make a down report look like it went up, he said he'd like to have an economist keep score for his struggling Mets. Now he's accused of being an old curmudgeon.

Frankly, I feel a lot like Mr. Haines does. I'm tired of being lied to. I'm tired of hearing about durable goods orders, ex-transportation, and CPI inflation data, ex food and energy. I read an article in the Wall Street Journal this morning which explained why the CPI did not fully reflect the runaway housing prices during the bubble and will mask the drop in housing prices in the current market. The CPI does not include housing prices, actually. It uses a measure called "owner's equivalent rent," which is supposed to reflect what homeowners would pay to live in their homes if they were renters. Brilliant!

Regardless of what you hear or read, you've got to understand that a tidal wave of inflation is sweeping around the world and engulfing America. This month's CPI report of 3.9% inflation, year-over-year, is a joke. Everyone knows that the cost of living is going up much faster than that. Yes, I'm talking about the cost of living, not a phony number, conjured up by a slick government economist.

Crude oil prices have skyrocketed and gasoline is up 30% from a year ago. Food prices have soared, thanks in part to the ethanol fiasco, and now, Dow Chemical is raising prices as much as 20% on its products. USA TODAY says it's just the most recent of a flurry of price hikes affecting everything from tissues, to coffee to paint. I can go on and on with stunning examples of price increases on steel, copper, coal and so on, but where can we get the truth on inflation?

Many observers believe the price of gold is the best leading indicator of inflation. I have no reason not to believe them. When I created VectorVest, I used the CPI in my valuation formulas and I still do. But VectorVest also tracks the Commodity Research Bureau Index, which we report in the Investment Climate section of these Views. You may see an 11-year, weekly graph on the CRB Index by clicking on Graphs on the main toolbar, clicking on Market Climate Graph and selecting the CRB Indicators.

Note that the CRB formed a double bottom in 1999 and 2001; then made a long steady climb from 184.49 to a high of 338.64 in May 2006. It fell to a low of 290.62 in January 2007 and embarked upon a parabolic rise to 431.07 since then. That's a 48% increase in 16 months, i.e. an average of 3% a month, not a measly 3.9% per year. Coincidently, the price of gold has gone up an average of about 3% per month since the middle of 2001.

The thing I like about using the price of gold or the CRB Index to track inflation is that their prices are what they are. No B.S. No Lies.

P.S. You may also enjoy reading my essays of 06/08/2007 and 06/15/2007.