Based On These Numbers, Inflation Is Getting Really Bad…

Have you noticed that prices are going up rapidly?  If so, you are certainly not alone.  But Federal Reserve chair Janet Yellen, the Obama administration and the mainstream media would have us believe that inflation is completely under control and exactly where it should be.  Perhaps if the highly manipulated numbers that they quote us were real, everything would be fine.  But of course the way that the inflation rate is calculated has been changed more than 20 times since the 1970s, and at this point it bears so little relation to reality that it is essentially meaningless.  Anyone that has to regularly pay for food, water, gas, electricity or anything else knows that inflation is too high.  In fact, if inflation was calculated the same way that it was back in 1980, the inflation rate would be close to 10 percent right now.

But you would never know that listening to Federal Reserve chair Janet Yellen.  In the video posted below, you can listen to her telling the media that there is absolutely nothing to be concerned about…


And it is really hard to get too upset with Janet Yellen.

 

After all, she reminds many people of a sweet little grandmother.

But the reality of the matter is that she is simply not telling us the truth.  Everywhere we look, prices are aggressively moving higher.

Just the other day, the Bureau of Labor Statistics announced that the price index for meat, poultry, fish, and eggs has just soared to a new all-time high.

This is something that I have repeatedly warned would happen.  Just check out this article and this article.

And it isn’t just meat prices that are going up.  One of the largest coffee producers in the entire world just announced that it is going to be raising coffee prices by 9 percent

It took the Fed long enough but finally even it succumbed to the reality of surging food prices when, as we reported previously, it hiked cafeteria prices at ground zero: the cafeteria of the Chicago Fed, stating that “prices continue to rise between 3% and 33%.” So with input costs rising across the board not just for the Fed, but certainly for food manufacturers everywhere, it was only a matter of time before the latter also threw in the towel and followed in the Fed’s footsteps. Which is what happened earlier today when J.M. Smucker Co. said it raised the prices on most of its coffee products by an average of 9% to reflect higher green-coffee costs.

Not that coffee isn’t expensive enough already.  It absolutely stuns me that some people are willing to pay 3 dollars for a cup of coffee.

I still remember the days when you could get a cup of coffee for 25 cents.

Also, I can’t get over how expensive groceries are becoming these days.  Earlier this month I took my wife over to the grocery store to do some shopping.  We are really ramping up our food storage this summer, and so we grabbed as much stuff on sale as we could find.  When we got our cart to the register, I was expecting the bill to be large, but I didn’t expect it to be over 300 dollars.

And remember, this was just for a single shopping cart and we had consciously tried to grab things that were significantly reduced from regular price.

I almost felt like asking the cashier which organ I should donate to pay the bill.

Sadly, this is just the beginning.  Food prices are eventually going to go much, much higher than this.

Also, you should get ready to pay substantially more for water as well.

According to CNBC, one recent report warned that “your water bill will likely increase” in the coming months…

U.S. water utilities face a critical economic squeeze,according to a new report—and that will likely mean higher prices at the water tap for consumers.

A survey by water-engineering firm Black & Veatchof 368 water utility companies across the country shows that 66 percent of them are not generating enough revenue to cover their costs.

To make up for the financial shortfall, prices for water are heading upward, said Michael Orth, one of the co-authors of the report and senior vice president at Black & Veatch.

“People will have to pay more for water to make up the falling revenues,” he said. “And that’s likely to be more than the rate of inflation.”

Of even greater concern is what is happening to gas prices.

According to Bloomberg, the price of gasoline hasn’t been this high at this time of the year for six years…

Gasoline in the U.S. climbed this week, boosted by a surge in oil, and is expected to reach the highest level for this time of year since 2008.

The pump price averaged $3.686 a gallon yesterday, up 1.2 cents from a week earlier, data posted on the Energy Information Administration’s website late yesterday show. Oil, which accounts for two-thirds of the retail price of gasoline, gained $2.49 a barrel on the New York Mercantile Exchange in the same period and $4.88 in the month ended yesterday.

The jump in crude, driven by concern that the crisis in Iraq will disrupt supplies, may boost pump prices by 10 cents a gallon at a time when they normally drop, according to forecasts including one from the EIA.

And the conflicts in Iraq, Ukraine and elsewhere could potentially send gas prices screaming far higher.

In fact, T. Boone Pickens recently told CNBC that if Baghdad falls to ISIS that the price of a barrel of oil could potentially hit $200.

Of course the big oil companies are not exactly complaining about this.  This week energy stocks are hitting record highs, and further escalation of the conflict in Iraq will probably send them even higher.

Meanwhile, a “bipartisan Senate proposal” (that means both Democrats and Republicans) would raise the gas tax by 12 cents a gallon over the next two years.

Our politicians have such good timing, don’t they?

Ugh.

And our electricity rates are going up too.  The electricity price index just set a brand new record high and there are no signs of relief on the horizon…

The electricity price index and the average price for a kilowatthour (KWH) of electricity both hit records for May, according to data released today by the Bureau of Labor Statistics.

The average price for a KWH hit 13.6 cents during the month, up about 3.8 percent from 13.1 cents in May 2013.

The seasonally adjusted electricity price index rose from 201.431 in May 2013 to 208.655 in May 2014—an increase of about 3.6 percent.

If our paychecks were increasing at the same rate as inflation, perhaps most families would be able to weather all of this.

Unfortunately, that is not the case at all.

As I wrote about recently, median household income in the U.S. is nowabout 7 percent lower than it was in the year 2000 after adjusting for inflation.

And if realistic inflation numbers were used instead of the government-manipulated ones, it would look a lot worse than that.

Inflation is a hidden tax that all of us pay, and it is systematically eviscerating the middle class.

So what are prices like in your neck of the woods?

Is your family feeling the pain of inflation?

Please feel free to share your thoughts by posting a comment below…

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About the Author: The Economic Collapse Blog

  • g13man

    well said , their children will spit on
    their own politician ancestors graves when the collapse happens. Like Russia in the 90’s federal retires will get subsistence pensions [if lucky] . Unions will cry with the baby’s . the population will not care , they will be trying to survive themselves. Paper money will be just that -paper

  • Patriot159

    ‘But the reality of the matter is that she is simply not telling us the truth.’
    Yep, more BS from an administration that’s full of more BS then all others combined.

  • Joe Cabot

    This article pointed out the reasons to your question. We don’t have leaders or statesmen. Government is infested with politicians who are living in the here and now, and have no interest in a future that they will not be a part of. The grifters have only a few goals: getting elected, getting reelected, and getting wealthy. Providing leadership is not on the list.

  • Ruvy

    Most of you reading this are in the United States and (having once lived there) I can safely say that to Americans, anyplace outside of the United States is kinda non-existent. But I hate to tell you, there is a wide world out there. My corner of it is in Israel, in Samaria, to be precise, near the REAL Shilo(h)- the one where there was once an altar to the G-d of Israel.

    But let’s stick to the money. I go shopping at a huge (for Israel) food warehouse named Rami Levi, and the reason I do is that they deliver the goods to my door. So, let’s start there, with the price of delivery. The price of delivery to my village is 35 shekels – a couple of cents less than $10.00. Now, let’s look at a few of the items that make it on my shopping list on a regular basis. But before I do, let me note that food cravings from the home country are the last thing to go when one emigrates – and I suspect that my American eating habits will remain till they bury me in a shroud in a cemetery in Shilo.

    Coffee – Taster’s Choice, 200 grams – normally 35 shekels (NIS 35) – but this week, it was on sale for NIS 29.90 – about $9.41.
    Cereals – Multi-grain Cheerios, 475 grams (just over a pound) – 24 shekels – $6.96;
    Kelloggs Corn Flakes, 750 grams (1.5 pounds) – 18 shekels – $5.22.
    Yellow cheese (9% fat), 400 grams – NIS 29.90 – $9.41.
    Tomato sauce, 26 oz. (a product of the United States) – NIS 15 – $4.70.
    Pasta or Spaghetti, four 500 gram packages (4.4 lbs.) – NIS 10 – $2.90.*
    Three Whole Chickens, 4 kilos (almost 9 lbs.) – NIS 77 – $22.30.*
    1% Milk, 2 liters – NIS 11.50 – $3.35*
    Fresh White Bread, 1 kilo – NIS 4.65 – $1.35.*
    Toilet Paper, 40 rolls – NIS 32 $9.28.

    A couple of explanatory points for you. The prices with the asterisks are subsidized in part by the government of Israel (the wonders of socialism!). There are no food stamps here – but folks who are poor tend to stick to the subsidized items and go heavier on them. Secondly, there are not many prices that I remember from the States, but I do remember paying about $4.00 for a gallon of milk at Cub Foods in St. Paul, 13 years ago. The price of milk here is double what we paid in St. Paul – even with the subsidy. Oh yeah – I almost forgot. EVERYTHING in Israel comes with an 18% value added tax tacked on.

    I hadn’t gone seriously shopping for three weeks, so my bill came to NIS 1,060 – $307.40. It usually tops off at about half that, and that is to feed three adults and 5 cats.

    Now, I don’t want to get you Americans all pissed off, so I WON’T tell you how much health insurance costs. Just a hint – we have SOCIALIZED MEDICINE THAT WORKS!

  • c_hickam

    I love this e-mail I received from the trading report. An article on massive inflation and one on a pending stock market crash on the same page. Brilliant consistency.

  • Ken

    What people do not want to face is where this is all going to end. When a country like Argentina or Mexico default, the big banks and some countries get caught with the bill, because these economies are small. But look at the U.S., the largest economy in the world, and then look at the dollar as the “reserve currency.” All of these international financial transactions are taking place using dollars. These dollars are out there somewhere and they have no effect on our economy. But when the dollar is no longer the reserve currency, all of those dollars are going to come back to our economy, and then look out for disaster. (I’m looking for someone who can prove me wrong on this.) Then there is all of the world debt. This country now spends a lot more than it takes in in taxes, and the expenditures and promises of more continue to grow. The economy is the backbone of any society, and when that goes, people lose faith in the government and the entire society crashes socially and politically.
    Since there is so much debt out there, it must be either paid off in full or the entire society has to collapse and go through the painful process of reforming, i.e., it must go through a middle age, when technology goes and people are left to battle for survival.
    There is one answer, and only one government in history has followed that course. During the Middle Ages, Rome collapsed in much the same way as we are, and it was followed by Persia, and the Gupta Empire completely collapsed. Cina and the Arabic countries collapsed economically, but even though the central governments survived, they became places where you would not want to live. Only one government retained a lot of its former glory – the Byzantine Empire. When Alexios I Komnenos saw what was happening, he returned to real gold coinage and his moire lasted another 350 years before it was conquered by the Turks. Why can’t we come to our senses and emulate his example?

  • Justin

    Hey guys I’m a local business owner in northern New Jersey. Just would like to share that this year alone I’ve had an increase of about 20% through majority of bills. My electric bill is up about 20% from last year with approximately the same usage along with my cable bill. Insurance is up around 20% also. The only bills that stood the same were the dumpster I have and my cintas bill lol. Please comment back and share your experience.