Inflation Pinch

When a middle of the road suburban paper like Newsday has a story like What’s putting the pinch on consumers? on the front page, you know that Inflation expectations are no longer "well contained."

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Source:
What’s putting the pinch on consumers?
KEIKO MORRIS
Newsday, March 31, 2008
http://www.newsday.com/business/ny-bzecon0331x,0,3085764.story

Graphic
http://www.newsday.com/business/ny-lifood0331pg,0,4548295.photogallery

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What's been said:

Discussions found on the web:
  1. RNL commented on Apr 1

    ..and yet gold, the magical inflation hedge, is nosediving, and TIPS are useless since they’re indexed to the fake (wildly understated) official numbers. Hold cash and watch your holdings in real dollars disintegrate. Is there anywhere left to hide?

  2. michael schumacher commented on Apr 1

    RNL-

    of course!!! the one place that the Fed is forcing you to go.

    Stocks

    I don’t like it when I am forced to do anything (there are things you just have to do) but making my choices for my money is what I want to do not the hand of some politician who can’t look beyond November 2008.

    Unfortunately Ben and Co. are telling us (through it’s destructive policies) that equities are it for the short term……they will have destroyed enough value to make everything else other than PM’s too risky.

    And since they have no clue about risk…..

    Ciao
    MS

  3. RNL commented on Apr 1

    MS, it’s even better with the latest writedowns from UBS, D. Bank, etc. Bad news? TIME FOR A RALLY! WOOHOO!

    HEY GUYS THE HOUSE IS ON FIRE! LET’S THROW A PARTY!

  4. Michael Donnelly commented on Apr 1

    We’ve switched to the generic supermarket brand of ice cream, saves about $1 per gallon two containers that we go thru per week.

    Biggest change has been I do the grocery shopping now and I actually pay attention to $ per item, vs the wife who took whatever.

    But still the grocery bill is hideous.

  5. KirkH commented on Apr 1

    It would suck to be on food stamps right now. 7% less food every year.

  6. Movie Guy commented on Apr 1

    Milk for $3.80/gallon? Not in Atlanta. Try $4.00-4.25 or more.

    **

  7. Francis Hwang commented on Apr 1

    RNL —

    Me, I’ve got some of my savings in various ETFs that have high-quality (govt and corporate) bonds in other currencies. It’s not so much the solvency problem that makes me think the dollar is toast for years to come — it’s the political reaction, the scores of people from all walks of life asking for a free lunch. It’s going to take everyone a long time to understand that all the various bailouts, high and low, are affecting the price of milk.

  8. Mr. Obvious commented on Apr 1

    My inflation ancedote:

    Went to buy some donuts this weekend. Had a coupon: buy 6, get 6 free.

    Cashier rang up the price: $5.29. Said, “Oh, you forgot my coupon.” She said: “No, I got it.”

    Looked at the prices and damn if a dozen donuts wasn’t $8.00!

    Not looking forward to the pizza places jacking up their prices. I can live w/o donuts..but not so sure about pizza….

  9. Pat G. commented on Apr 1

    And per the government actions there’s more inflation headed our way wouldn’t you think?

  10. Todd commented on Apr 1

    Well in these times of inflation turbulence, its very comforting to see that the price of Kix cereal remains steady like a rock!
    Kix Kix As*

  11. cyber_rigger commented on Apr 1

    Gold is dropping too fast to make sense.

    My theory is that market makers are shorting gold to scare people out so they can get in. A short squeeze on gold would be interesting.

    Remember that you can’t go out a print up some bullion.

  12. Jim S. commented on Apr 1

    Is $12K really the average wage on Long Island?

    What’s the poverty level?

  13. Jim S. commented on Apr 1

    Is $12K really the average wage on Long Island?

    What’s the poverty level?

  14. Jim S. commented on Apr 1

    Oh, I see now that it’s for the second quarter. So the average wage is more like $48K.

  15. Mr. Stupid commented on Apr 1

    Since when did “inflation” become a bad thing? The prices of everything goes up every year? Good! My wages are going up, too.

    If the price of nearly everything was going down, I’d be a helluva lot more worried.

    Inflation is natural. Deflation is insidious.

    Mr. Stupid

  16. Waynerite commented on Apr 1

    Ethanol critics please take note: it is not just the increases in corn/soybean/wheat prices that are effecting higher food prices. Apples, bananas, tomatoes, etc. price increases are equal to and more than milk, bread, and even Kix. We all pay when trucking costs $.80 a mile just for diesel.

  17. cyber_rigger commented on Apr 1

    >Since when did “inflation” become a bad thing?

    Inflation is GREAT!, … for politicians that is,

    wanting a hidden way to steal more from taxpayers.

  18. john commented on Apr 1

    I can see why you chose the nom de plume. Inflation when running in the teens and twenties for staples like food and energy when real incomes are flat is appalling news even if you can’t figure it out. Perhaps you can’t figure out what the real increase in your wages are.

  19. Howard Veit commented on Apr 1

    Prices of food? Food, for God’s sake? How about the prices on weed?

  20. Howard Veit commented on Apr 1

    Prices of food? Food, for God’s sake? How about the prices on weed?

  21. John T commented on Apr 1

    the price of Kix did not rise but General Mills made all their boxes smaller so in actuality the price has increased.

  22. Michael Donnelly commented on Apr 1

    Mr. Stupid,

    except for those that don’t get a wage increase or who live on a fixed pension, or for anyone on SS who gets paid the sucker rate (increase) of CORE inflation

  23. Flic commented on Apr 1

    I’ve noticed packaging weights being reduced but prices staying the same. Noticed last night the pasta we always buy which has always been 16oz is now 14.5 oz. 5 lb bag of sugar is now….4lb…..same price.

  24. MouseJunior commented on Apr 1

    Francis –

    Which ETFs are you holding? I’ve been looking for a fund like the one you describe, but haven’t found one I like yet.

  25. pft commented on Apr 1

    Long Island wages of 11 K are quarterly wages.

    Good thing inflation was only 4% so real wages could increase 1.7%.

    I guess CPI will say we are all eating Purdue Chicken Nuggets, Kix Cereal and drinking Can Melta Columbian Coffee, and food inflation will be low.

  26. Josh commented on Apr 1

    Data reflect one-year changes in certain necessities.

    Since when is ice cream a necessity? It’s not even good for you! I don’t disagree with the point of the story, but seeing ice cream on the list made me chuckle.

  27. njAndrew commented on Apr 1

    I have been switching to store brands on more and more products as food price keep going up (unlike my salary). Started with seltzer, then butter, sour cream, etc.

    Also noticed package sizes shrinking. Had a coupon (yes using more and more of those) for some OJ and when I picked it up I noticed the smaller size. Package stated “New, easier to pour size!” Not smaller size same old price.

    Andrew

  28. Jim S. commented on Apr 2

    Wasn’t it General Mills that dropped prices and package sizes a few months ago? Their internal research showed that people noticed the price decrease more than the size decrease. So even though the price/lb had gone up, people got a warm fuzzy.

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