Inflation??? What inflation???

Price Inflation Is All Around Us

Robert Wenzel

But don't worry. If you don't eat or need a place to live, and just spend all day reading Paul Krugman blog posts, you will realize there is no problem.

From My Budget 360:

Inflation is accepted as a normal part of our economy similar to how we take it for granted that the sky is blue. It is close to a religion where people simply believe that inflation is part of the economic fabric of our nation. Yet inflation with no subsequent rise in wages is tantamount to a loss in living standards like a lumberjack slowly chopping away at a big pine tree. Inflation is a slow process and erodes purchasing power through a variety of avenues. We sometimes need to step out one generation to see how massive the changes are in the system. Even today inflation is hitting the pocketbooks of most Americans. First, inflation adjusted wages are simply not keeping up. You spend more at the grocery store and get the same or even less amount of goods. Sending your kids to college? More of your money is being allocated to this purchase compared to the previous generation. Housing? The large push of investors in the market has caused housing prices and rents to go up. What this means for most Americans is that more income is being siphoned away into housing. All of these are very tangible impacts of inflation so why is it that central banking policy is practically ignoring all forms of this erosion of living standards to continue monetary easing?

Food costs are certainly up in price. Families spend a good portion on food each month. Just think of the typical American family making $50,000 a year. If you are spending $500 to $750 a month that is a good portion of your disposable income. One needs to eat. We’ve seen disinflation hit in this market were producers are repackaging items with less content but for the same price. These are sneakier ways of hiding inflation since consumers feel they are purchasing the same amount of goods but in reality, they are paying more for the same item. For example, smaller tuna cans or repackaged cereal boxes.

If we look at the S&P GSCI Agriculture and Livestock Index the change in prices are very visible. Most of the changes started in 2000.

The index is up more than 133 percent since 2000. You see that corn, soybeans, and wheat are all up in the double-digits this year alone. All of these items are large staples in our food supply...

Read the rest here:
http://www.economicpolicyjournal.com/2014/04/price-inflation-is-all-around-us.html