muses of the moment

January 29, 2012

groovygirl says there is consumer inflation

Filed under: Economic Crisis, Inflation — totallygroovygirlfriday @ 1:33 am

Although, Mr. Ben says there is no inflation and is keeping rates near zero until 2014, groovygirl begs to differ.

GG has been doing some financial dissecting of her bills the last 3 years. Some conclusions of her personal experiences:

  • Food is up 30%
  • Utilities (including water) are up 15%
  • Out of pocket health expenses (co-pays and Rx) are up 43%

Upon further dissecting, even if the cost of unit of utility was the same or only slightly higher on average, the fees and taxes went up. Groovygirl has mentioned this before. Even if we should have a sudden deflation in all energy commodities (but gg thinks not), US infrastructure major maintenance costs and federal, state, and local demand for fees and taxes will make living expenses go up.

Mr. Bernanke may not call that inflation, but groovygirl does. Especially when you are making .01% interest on cash in the bank.

3 Comments »

  1. Healthcare is an excellent proxy for inflation. Cant be imported from government subsidized Chinese providers.

    Comment by Curt — January 29, 2012 @ 6:28 pm

  2. Good point, GG. The distinction between inflation and cost-of-living is imaginary. Both contribute to decline in ‘Affordability.’

    Bernanke is killing the pension funds with his hijinks. There’s an ‘Affordability’ killer for ya. OWS is going to see a lot of walkers and canes in the years ahead.

    IMO the Federal Reserve is the greatest threat to national security.

    Comment by Lore — January 30, 2012 @ 1:25 am

  3. GG,

    Healthcare is a crummy proxy for inflation, but an excellent proxy for government bloat. Healthcare is not a right, and free healthcare is a catalyst for people to not take care of themselves, creating an increase in demand which always drives up the cost of a limited supply or a product with a very long supply chain (how do you increase the supply? First, someone has to go to medical schools for four years, then…).

    On food inflation, they will always cook the books, making substitutions until they have it defined as a diet of beans and rice.

    Then they will substitute dirt. But hey! Inflation will still be low!

    Of course, grass is still free–if you have the water. My longhorn steer goes to the butcher this month raised on grass and a month or two of corn for marbling here at the end. Anyone interested in buying February 21 futures (my date at the butcher) on a side of beef?

    (Just kidding–that would break so many regulations I couldn’t begin to count them). My daughters milk about 1 1/2 gallons from our Holstein cow each morning (beyond what the calf gets), but we can’t sell any because we don’t have a certified processing facility, including electricity and a public bathroom.

    -Lemming

    Comment by Lemming — January 30, 2012 @ 1:04 pm


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