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The government tells us there is no inflation. That’s because the government’s “official” numbers exclude food
and energy prices! How ridiculous is that?
So says Michael Lombardi (ProfitConfidential.com) in edited excerpts from his original article* entitled No Inflation? Why Breakfast Prices Are Going Up?
The following article is presented by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and the FREE Market Intelligence Report newsletter (sample here; register here) and has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.
Lombardi goes on to say in further edited excerpts:
Aside from food, gasoline prices are also moving higher. As the chart below shows, since November, gasoline prices have gone up 20%. Higher gas prices means it costs more to deliver goods to the end user [which is] a signal that goods in general could be rising in price.
Non-price Inflation
Effect on Buying Power
As inflation continues to rise, it will kill the buying power of the average American Joe because incomes in the U.S. economy are not keeping up with inflation. Rising inflation puts severe pressure on disposable income as more buys less. That means the saving rate will go down. It’s the spiral effect: the more inflation rises, the more severe the problems.
If anyone ever thought the Federal Reserve could print $4.0 trillion out of thin air and inflation would not be a problem, they obviously never studied the history of economics. Every economy in the world that has printed mass amounts of its money (and none have printed more than the U.S.) has encountered inflation as a consequence of money printing. The U.S. will be no different.
Conclusion
Don’t listen to what the official numbers say. Inflation is a big problem already for the U.S. economy – and in an inflationary environment, gold bullion goes up and stock prices go down, because materials cost more and consumers spend less.
I’d adjust my portfolio accordingly for the rapid inflation that awaits us.
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
*http://www.profitconfidential.com/economic-analysis/cost-breakfast-going/
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