Do spiraling costs pose any national security threat? Remember that the issues causing the initial uprisings in Tunisia had to do with food becoming unaffordable.
Having what Ben Bernanke and his Fed cronies consider to be stable prices in the US economy is really the only way that the Federal Reserve can justify keeping interest rates near 0%. Especially since as he stated more than once in his press conference the Fed mandate is to keep inflation at bay.
The problem is Fed Chairman Bernanke, that inflation is eating us common folk up. You probably don't get as much of a whiff of it as we do on high in your Ivory Tower, but rest assured it is out there and it hurts. $4.20 a gallon for regular gas? Think about it when your driver is using the government credit card to fill the tank of your government issue car. Then consider this article that points out the 9 areas where inflation is "killing" us.
From MarketWatch: Commentary: Meat, gas, even diapers are costing regular folks
Inflation is far from under control and it's time that Americans demand our government officials do something about it.
The Federal Reserve would have you believe that everything is fine, focusing on core inflation rates and ignoring broader measures of inflation as they affect food and energy. These commodity-driven prices, as our central banking overlords would have you believe, are naturally more volatile and shouldn't be overstated.
You would think after Fed bureaucrat William Dudley was castigated for talking up the affordability of iPads while ignoring real family expenses, our Federal Reserve officials would have woken up to reality. But after the publicity stunt by Chairman Ben Bernanke on Wednesday, it's clear that the Fed — and perhaps many Americans as a result — is in denial when it comes to the inflationary trends crippling U.S. households.
While it's all well and good for investors to focus on surging precious metals and the profit opportunities there, let's not overlook the dark side of inflation that is eating away at family budgets. Here are nine crushing costs of inflation that are breaking many American households:
In a revised forecast Monday, the U.S. Department of Agriculture said consumers will see higher price tags on ground beef and steak, projecting 6% to 7% increases year over year. That's up from a previous forecast of just 4.5% to 5.5% inflation for beef prices. Beef prices have surged in the last several months as supplies shrink, exports boom and grain costs soar.
Don't think you can just switch from cow to pig to avoid this trend — pork could see retail price increases of as much as 7.5% over 2010 levels according to the USDA.
Even going vegetarian is more expensive than it was a year ago. Corn prices have doubled, from $3.49 a bushel in July to well over $7.70 currently. Wheat prices have rolled back a bit in recent weeks, but topped 2008 highs in February to set a new record and remain very high currently.
The average U.S. price of a gallon of gasoline has jumped about 12 cents over the last two weeks to $3.88, with the highest average price for gas tallying $4.27 in Tucson, Ariz. This is with oil at $112 a barrel — if crude prices reach 2008 peak levels of $145, four bucks for gas may seem cheap.
The price of copper at the end of 2008 was just $1.30 per pound. Currently, copper is trading around $4.30 after setting a record of $4.60 in February. Unlike gold and silver, which are largely used in luxury goods or as investments, copper is used in a wide range of household items — from electrical wiring to air conditioners to water pipes.
Consumer-products company Procter & Gamble PG (NYSE: PG - News) said this week that list prices for Pampers are up 7% on average over last year, with even Pampers wipes up 3%. To be clear, that's not a retail price hike, just a cost increase to stores. Retailers will decide how much of those price increases to pass along to shoppers. Kimberly-Clark KMB (NYSE: KMB - News), maker of Huggies, said Monday it plans to raise prices for similar reasons — rising costs for the petroleum products and paper pulp that go into the diapers. It will be the third such announcement for Kimberly-Clark since the middle of March.
7. Paper towels and toilet paper
If you don't have infants, you're not off the hook. P&G also said that Charmin toilet paper and Bounty paper towels are both listing for 5% more now with retailers and distributors than they were a year ago. KMB's diaper price update will also be accompanied by a boost for its flagship Kleenex tissues.
8. Shipping surcharges
Freight shipper United Parcel Service UPS (NYSE: UPS - News) will be hiking its fuel surcharges from 7.5% to 8.5% as of May 2 for ground freight and from 13% to 15% for air freight. That really hurts small businesses. If you are a storekeeper simply trying to keep your shelves stocked, you have no choice but to pay more and endure smaller margins — or hike prices yourself and add to this inflationary mess.
Perhaps the most insidious factor of our current inflationary spiral is the fact that while all these other items are costing more, household purchasing power is shrinking because wages and salaries aren't keeping up. While the consumer price index rose 2.7% in March to clock the fastest 12-month pace since December 2009, a staggering 18.3% of personal income is now made up of food stamps while wages account for just 50.5%. That's the lowest since the government started keeping records in 1929.