My best estimate for inflation on my own consumer goods basket this year is 21% rather than the official 3%. Product and service quality have dropped noticeably to maintain a price point. Personal incomes have dropped largely because government spending is crowding out private spending. For the first time, imported electronics like cameras are rising in price. Imported optic have been rising in price much faster, to the tune of 40-50% over the last year alone. Personally, I do not find my own lifestyle all that greatly affected, but people who had a tight budget last year are probably in trouble now.
Over the last seventy years, average annual inflation seems to hover around 5%. Late 1970s through 1980 inflation was relatively high, and we may be returning to that state now.
Food has been especially hard hit. Meat, Fruits, and Vegetables were impacted by drought conditions. Corn, which is typically a feed for all sorts of meat, pork, and poultry not only had low yields, but diversion to the government ethanol programs. As a result of soaring feed prices, slaughters are high, which will result in even higher meat prices in the late spring 2013 when the inventory levels out.
I bought a roast yesterday. Everything beef including stew meat was north of $4/lb. In Texas! Pork is better, but my cousin who lives with us is allergic.
Gives a whole new meaning to the term “Holy cow!”
Looks like I need to dust off my squirrel and rabbit recipes, and sight in the .22.
John Williams at Shadowstats reckons that the real rate of inflation (including food and fuel, which USGOV leaves out of its inflation calculations) is about three times the official rate. For poor families that spend a disproportionate amount of their income on those commodities, make that five to six times higher.
I predict that the so-called ‘fiscal cliff’ isn’t going to be solved, which will make things much worse in the new year.
Shadow Stats is a great source for inflation and BLS-type information.
Zerohedge (www.zerohedge.com) is a great offbeat financial news / blog for information on the real financial situation, not what CNBC and Faux News want you to think.
I’m not sure why you would think “solving” the fiscal cliff will help inflation. Remember that this “cliff” is mostly a government creation intended to scare us into paying more taxes. It’s the federal equivalent to towns laying off firemen first rather than last, protecting all the useless chairwarmers, so the peons (oops, I mean taxpayers) will be scared into paying more taxes.
I think one of the reasons the official inflation rate is manipulated to look low is that the government has bonds (“TIPS”) that adjust according to inflation. Pretend inflation is low, and presto — more money screwed out of the unwary.
And then of course there is the fact that inflation makes politicians look worse.
How appropriate — next year is the 100th anniversary of the Fed, the money manipulation scam that brought us here. (For details, read “The Creature from Jekyll Island”.)
Of course, if the BLS is lying to us about the inflation rate, that means we’re still in a recession because higher inflation would mean a lower real GDP.
Obama would never lie about that, would he?
I can tell you, that trying to feed& clothe 2 adults&4 kids on one income has become very challenging.