America Has A 1.6% Inflation Rate. Aren’t You Lucky?

In the Socialist Paradise where I live, inflation (as reported by the government) was 56% last year. This year the projects are for an inflation of 85% or more. But, you, my dear friends, don’t have an inflation problem back there in America, do you? I Googled US Inflation this morning and found this graph:

United States Inflation Rate

Wow! 1.6% inflation last month. I guess those blood-sucking Social Security recipients (like me) won’t being getting any adjustment to their benefits this year. Unfortunately, according to this article, those fixed-income blood-suckers and most everyone else are going to be in for some sticker shock and the grocery store very shortly. (Keep in mind that the government’s reported inflation rate does not take into effect price changes in volatile things like food or gasoline.) Take a look at what is happening to these food commodities so far this year:

Cattle              Hogs               Grains             Milk                Coffee

+28%              +25%              14%                +17%              +67%

Those increases should up in what you pay a the grocery store in April and May.

Why are these food commodity prices on the rise? The article linked above suggest it is due to speculators using the Feds easy money as the cause. I’m not buying that. The Fed’s Zero Interest Rate Policy( ZIRP) has been in effect for nearly five years now and the source the author used for the above table shows that these commodity prices were either flat or falling for all that time until just recently.  It is more likely due to normal supply and demand factors than anything else.

At any rate, your 1.6% inflation rate is about to bite you in the …

Well, that’s what I’m thinking. What are your thoughts?

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11 thoughts on “America Has A 1.6% Inflation Rate. Aren’t You Lucky?

  1. Jim: As usual, things are not as they seem. The government changed the “basket” of consumer goods used for price data, and what we have is a deceptive. It is my impression that the government included items that contributed to household wealth, like the price of your house. As you know, the housing bubble crash is a long way from healing. It is large lumps like this that make the numbers look low. However, don’t take my word for this as things are always changing.

    Ancedotally:

    2013:
    Bacon – $4.50/lb
    Chicken – $3.00/lb (boneless breasts)
    Premium Bread – $2.89/lb

    2014:
    Bacon – $6.00/lb
    Chicken – $4.59 /lb (boneless breasts)
    Premium Bread – $3.69/lb

    We are seeing large increases in the price of food, and those who have jobs can so far absorb it. Gasoline is all over the map, currently at $3.29/gal in Atlanta.

    Yes, people are seeing inflation, but the government is masking the numbers.

    1. Bob, thank you for that information. I’ve been wanting someone to give me some examples of what is really happening. It’s worse than I thought and it looks like prices are going to take another hit very soon.

  2. Inflation, where? I reckon if we stay out of the grocery store and hitch hike we can still live the american dream.
    P.S. I was watching a show about candy manufacturing and a small size cotton candy on the boardwalk somewhere in California was $3.50. That was better than the special running at the cineplex here in Jersey: Two hot dogs and a medium soda for $17.50. Damn, I could cross the Washington Bridge for that kind of money!

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