The Virus We Can’t Escape

The Virus We Can’t EscapeOne of my earliest childhood memories was my grandmother and me bringing home groceries in my wagon. I’ve never forgotten her ranting about rising grocery prices. She seldom raised her voice, but over dinner, she let it out…. “I’ve never been able to carry home $25 worth of groceries. We had to use the wagon – it’s outrageous!”

Michael Maharrey writes about government deficit spending morphing into inflation:

“We’re starting to see signs of inflation in the commodities markets. Oil is back above $50 a barrel. Remember $4 per gallon gas in the mid-2000s?

And at some point, you’re going to see the impact in the supermarket. In fact, my wife insists we already are.”

Chuck Butler believes inflation is different for all of us. Home prices skyrocketed 14% over the last year. If you bought or sold a house you would see it. For those of us who didn’t, we are not directly impacted.

I asked him how he calculates the “Butler household index”. He grinned and says it’s directly correlated to how much his wife complains when she is done shopping. I get that. My wife Jo has been educating me about rising grocery prices a lot lately.

We all have to eat, drive and have medical care. There is no escape from the inflation virus!

Wolf Street reports:

“Inflation pressures are building up. Two reports out today show a large-scale surge in price pressures for manufacturers – and they’re able to pass them on to their customers.

The Prices Index surged dramatically in January, to a level of 82.1%, after an eight-month upward trajectory,…January saw the fastest expansion of the Prices Index since April 2011:”

ISM Manufacturing Prices Paid - Credit: Wolfstreet.com

These stats conflict with the Bureau of Labor Statistics (BLS) inflation reports. John Williams at shadowstats.com, tells us the BLS has gerrymandered the calculations for the benefit of the government. Social Security increases are geared to “official inflation” numbers.

He calculates inflation, in the same manner, it was calculated in 1990 and compares it to the new math put out by the BLS:

Consumer Inflation - Official vs. ShadowStats (1990-Based) Alternate - Credit: ShadowStats.com

This BLS index tells us inflation increased 1.4% for “all items.” Using the same method, they did in 1990, it would be 5%. My grandmother wouldn’t be snookered, she was a savvy shopper.

Today’s challenges

Peeking past the headline number, “Food at Home” increased 3.9%, with meat and dairy leading the increase at close to 4.5%. Gas decreased 15.2% and medical care increased 2.8%.

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