Federal Reserve Admits Truth In Internal Memo: "Prices Continue To Rise Between 3% And 33%"

Tyler Durden's picture

We are confused: on one hand the Fed is injecting hundreds of billions of liquidity into the market, boosting the S&P to all time highs and making the rich richer (Piketty taking Excel lessons from Rogoff notwithstanding) while the economy remains stagnant because, according to the BLS, inflation is too low, and as everyone knows the biggest lament of the impoverished middle class is that "the value of my dollar isn't being destroyed fast enough for me to feel confident about the future." On the other hand, the very same Federal Reserve Bank (of Chicago), just announced that as a result of "prices continuing to increase between 3% and 33%" (!), beginning May 27 it is hiking the prices in its cafeteria. So, clearly prices are rising at a 33% clip due to, how does the IMF put it, lowflation, right? Oh, and harsh weather.

From the Chicago Fed, highlights ours

Subject: Reserve Center Cafe changes coming


Reserve CenterTM Tenants,


Due to rising product prices in the past several years, The Reserve Center will increase its prices in the cafeteria effective May 27. 


Over the past five years, many of you may have experience product price increases in grocery stores. Prices continue to rise between 3% – 33%.  For the past eight years, The Reserve Center has been absorbing these increases. The last overall price increase in The Reserve Center cafeteria took place in 2006, followed by a limited increase on sugar-based products in 2012. 


For the upcoming price increase, a thorough review of café items was conducted and, while some prices will remain flat, others will increase to recognize these market increases. The price increase will help The Reserve Center cafeteria continue to maintain high standards and service levels by providing quality products.


Another change includes the introduction of new menu program changes to provide greater variety as we continue to refresh the cafeteria menu offerings.  In the following months, we will be distributing a survey to obtain feedback on these new menu changes, as well as your food preferences so that we can continue to tailor menu offerings based on input we receive from our customers.


Lastly, we've reviewed feedback and in response The Reserve Center cafeteria will now close at 1:30 p.m. on Fridays. However, July 11 tahrough Aug. 29 we will close at 1 p.m. as the traffic is lighter due to vacations.


Thank you for your continued support of The Reserve Center cafeteria.


Federal Reserve Bank of Chicago

* * *

The good news (for Fed employees): as we reported last year, the average annual increase in the salaries of Federal Reserve workers over the past year has been around 13%, so a price hike should be bearable.


Everyone else? As we showed in "Real Hourly Wages Decline For The First Time Since 2012" better luck next time.

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SilverIsKing's picture

No worries. It's only the price of beef that is being hiked in the Fed café.

H. Perowne's picture

Hedonically adjust it to horsemeat, problem solved

Oldwood's picture

Soylent Green is....people!

In a world dominated politically with people who see us, you and me, as the problem, the natural solution will be OUR consumption.

Higher food prices indeed!

nope-1004's picture



Current discussions about rising food prices and fears of inflation are largely overstated.  Rising food prices in developing nations can be attributed to the citizens of those nations seeking more sophisticated diets.


- Bernocchio, June 2011


A comment so ridiculous you wouldn't even read it in a Mad Magazine.


DavidC's picture

Damn! Until that last sentence I thought I WAS reading a Mad magazine!


Stackers's picture

talking to one of my rancher buddies the other day. Cows being sold at the auctions for processing would bring $600-700 2 years ago, now bring $1,100+.

TeamDepends's picture

Only when these sumbitches are afraid to leave their dwellings will we be free from their disease.

El Oregonian's picture

Hey, all they have to do is reduce the serving size by 40% and hype up the "New Reduced Healthier Caloric intake size" while increasing the price a measily 5% and BAM! Problem solved! WINNING!!!

Son of Loki's picture

USDA warns of sticker shock on U.S. beef as grilling season starts


WASHINGTON (Reuters) - The Department of Agriculture has warned of sticker shock facing home chefs on the eve of the Memorial Day holiday weekend, the unofficial start of the U.S. summer grilling season.

The agency said conditions in California could have "large and lasting effects on U.S. fruit, vegetable, dairy and egg prices," as the most populous U.S. state struggles through what officials are calling a catastrophic drought.

The consumer price index (CPI) for U.S. beef and veal is up almost 10 percent so far in 2014, reflecting the fastest increase in retail beef prices since the end of 2003. Prices, even after adjusting for inflation, are at record highs.

max2205's picture

Who's running this country anyway. ...oh wait....

ZerOhead's picture

"For the upcoming price increase, a thorough review of café items was conducted and, while some prices will remain flat, others will increase to recognize these market increases."


What's wrong with using hedonics and substitution to solve the problem of "inflation" at the Fed cafeteria?...

Just replace the steak in the steak sandwich with cheaper (and thus now prefered) shit and you have a shit sandwich that's every bit as tasty as the original steak...

SafelyGraze's picture

Saturday Reading:

The Origin Of Dollarbleck


most people don't realize that the mechanism for covering the kingdom with green monetary slime originated before helicopters and ben

magicians, acting on the orders of the king

August's picture

Ask Obama, he might know.  The again, maybe not.

Al Gorerhythm's picture

When they start seeing numbers of upticks in the range of hundreds or thousands for comments like these, you know that they will be trembling, like Jimmy Saville at Wiggles concert.

MountainsRoam's picture

Hangin is to quick and easy, I think we need something really special for the Federal Reserve Gang..

August's picture

Back to the Old Vikings Days, I say: into the Wolf-Pit!

xtop23's picture

They have internet access, and have stolen enough of grandpa's pension plan, that they can afford armed mercs as babysitters.

Until some of these guys start swingin' from a high branch, you aren't even giving them a chill.

All Risk No Reward's picture

We are aloooooong way away.

We can't even get to the point that tax payer money isn't used to support their sybaritic living arrangements...


Read 'em and weep, lady (there has to be one!) and gentlemen.

NoDebt's picture

None of this is a problem unless you eat or use energy.  So just stop doing that.

Also most state and local governments are cutting taxes to help you out.  I pay far less in property taxes, sewer taxes, municipal taxes, etc. than I did 7 years ago.  I'm sure you've all experienced similar declines in your taxes over the last 6-7 years.  (Yes, that's sarcasm)

So to recap:  your earnings are flat to declining, your taxes are going up and what you pay for necessities like food and energy are rising as well.  Someday we'll mourn over the death of the middle class.  Someday after it's far too late.

jbvtme's picture

i'm long embalming fluid

ATM's picture

THEY want to destroy the middle class. The middle class is that portion of society that is self sufficient, ambitious, hard working and for th emost part moral.

All of those traits are incompatible with authoritarianism which seeks a docile, needy, amoral citizenry who willingly accept the meager rations of their masters. 

Jumbotron's picture

"The middle class is that portion of society that is self sufficient, ambitious, hard working and for th emost part moral."

Bullshit !

The Middle Class is a total fabrication due to a singularly unique time in human history where the industrialization of Cheap Energy....(first coal and then oil) came about at the same time as Central Bank planning (1913) and then RAMPed way up in the 50's and 60's until today with Ponzi financing.

Cheap Energy is over.  So is the Middle Class....at least the way we have known it.

Back to Feudalism we go.

BeerMe's picture

Isn't it already too late?  The middle class seems dead to me.

All Risk No Reward's picture

Yes.  The ever thinning veneer of the middle class is wholely dependent of the issuance of exponential debt (money - debt **is** money).

When that exponential debt growth curve breaks for good - and it will...  it always does...  not to mention that is an integral part of the plan to strip mine the planet Earth on behalf of the Machiavellian oligarch class...  the veneer will be gone.

Most people who are now "rich" will be impoverished to a level few can imagine today.

The Great Depression will have to be renamed "The Happy Days" before this Debt Star economy destroyer is done working its "magic" on an insouciant and ignorable galactic chump population.

Oh regional Indian's picture

This is definitely Irony Story of the Month.

Would be funny if it was....funny that is....

Is the Kool Aid free?

Cpl Hicks's picture

The Kool Aid is free.

The antidote, however, is very, very expensive.

El Vaquero's picture

Last time I looked at the price of the hotdogs that they put the red dye in to hide the shit that you really don't want to know that you're eating, they were $4.00, and that was a couple or a few months ago.  No inflation?  What goes into hotdogs to begin with is normally pretty bad, but when they have to put red dye into them to make them more palatable, you know that they are probably horrid.  And they're getting to the point where they're not exactly cheap.  

chapaev's ghost's picture

There is no inflation. A price increase based on a limitation of supply is not a sign of inflation.

The article's context is about the price of FOOD. Food is becoming more expensive for the following one reason:


Every petroleum-related production index is in decline. If you don't believe me, check out this website:


All of our food is grown/harvested/processed and delivered with fossil fuel/petroleum. For example, locally hay prices have essentially doubled. Cattle prices have more than doubled. Add to this hog virus, GMO diminishing returns, soil degradation, etc and the cost of food production will continue to soar.

Spending more money on food (which is a secondary fuel expense, ie, it really means spending more for petroleum), is NOT , I repeat NOT inflation. It is actually deflationary, because that money cannot be spent on other things. Fixed costs detract from economic growth. Food (we all have to eat) is a fixed cost at the BOTTOM OF THE PYRAMID. If the krill die, the whales die. If I have to spend more for food, Blankfiend, Ber-stankie, Yeller, and the rest of the bankster-vampire class will die.


Peak oil bitchez...



chapaev's ghost's picture

PS. Don't eat hot dogs! Really. That is cancer-sausage. Literally, hot dogs are made out of the cancerous growths cut out of the animals. Do your health a favor and spend that money on cigarettes.

Jumbotron's picture

LOL !!!   Me too.....had to do a double take on that last line.  Well played, sir !!

Dublinmick's picture


Your sense of humor is appreciated.

Socratic Dog's picture

It's not humor.  It's just fact.

El Vaquero's picture

Peak oil and an increase in the number of dollars are not incompatible.  We're printing because real growth is no longer possible across the broad economy, and the number of dollars sloshing around out there is increasing.  The thing that has kept this from blowing up is that many of those dollars have not yet come out to play, and the money velocity has tanked.  Add to that the number of dollars abroad, and you add another layer of potential inflation.  No, we are facing ever dwindling resources with an increased supply of FRNs.  While we may hit a deflationary bump along the road, I fully expect the endgame to be hyperinflation, brought on, in part by dwindling resources and in part by printing.  


EDIT: That expectation is in the event of no major war that crushes the country before we get to that point, be it a nuclear war with Russia or China, or a civil war.

Jumbotron's picture


We HAVVvvve a WINNAH !!!

Absolutely correct.  Everything begins and ends and begins again on Cheap Energy as the input for all production in the modern world.  Price inflation due to monetary policy only comes about because there is not enough Cheap Energy to keep the Debt Ponzi going.  Therefore more money is printed for fear of debt not being paid back due to the increased input cost of Expensive Energy.

And there is not enough Cheap Energy remaining....nor will there be enough new finds of Cheap Energy in the future to make up the difference in order to pay back the debt needed to bring 30-100 years of future production to the present as we have been doing for the last 60 years or so.

The organic analog to this is.....try doing the exercises needed to compete in Crossfit.  Now....try doing that full on 24 hours a day for the next week.

You will learn very quickly the concept of Peak Cheap Energy....and how that affects production....namely....your ability to ouput those exercises in the same manner you did at the beginning.


ThroxxOfVron's picture

"Spending more money on food (which is a secondary fuel expense, ie, it really means spending more for petroleum), is NOT , I repeat NOT inflation. It is actually deflationary, because that money cannot be spent on other things. Fixed costs detract from economic growth. Food (we all have to eat) is a fixed cost at the BOTTOM OF THE PYRAMID. If the krill die, the whales die. If I have to spend more for food, Blankfiend, Ber-stankie, Yeller, and the rest of the bankster-vampire class will die.


I will live off weeds and dirt if it means that the Oligarchs and Cocksuckers die a miserable death and the land is purged of them.

Bring the brutal austerity and cleansing.  Please.  Yes, I understand. No, not kidding...

Serenity Now's picture

chapaev's ghost,

It's so nice to see another poster who knows the real definition of inflation.  I think there are four of us on ZH now.  :)

jerry_theking_lawler's picture

Wrong there is 'inflation'....why?



"inflation is always and everywhere a monetary phenomenon."


MontgomeryScott's picture

Yes, petroleum prices are critical to all modern life, I agree.

As far as the 'peak oil' myth, not so much.


There is way too much evidence to possibly continue believing the 'fossil fuel' bullshit story. Look at the Gulf of Mexico issue, for example; or the Kola S/G superdeep wells that Russia drilled.

Asa far as 'inflation/deflation', these terms have NOTHING to do with the amount of fiat currency spent; they refer to the number of fiat currency units being put in to (or removed from) the overall supply. As a corollary, if all people must spend more to get the same, and all people CAN spend more, then the supply of fiat currency MUST have been increased (hence, the INFLATION of the currency supply MUST exist), and your 'deflationary' statement becomes a misnomer.

NO, the REAL issues have to do with the CONTROL of the oil supply (and, the FOOD supply). You KNOW who I'm discussing here.

I wonder what the USDA needs with body armor and submachine guns, anyway.

A lot of people discount Lindsay Williams, perhaps because he's a Baptist preacher, but I have no reason to doubt his story about Gull Island.


It takes an enormous amount of fuel to fly all those spraying planes, you know. The causes of the symptoms you are concerned about ("...locally hay prices have essentially doubled. Cattle prices have more than doubled. Add to this hog virus, GMO diminishing returns, soil degradation, etc and the cost of food production will continue to soar.") have different root causes than you appear to know of.

In order to effect a solution, one must first CORRECTLY identify the actual problem.

All Risk No Reward's picture

The main reasons for price increase, ex preconceived notions which most people can't seem to cognitively parkour over, is that Wall Street took their trillions in free bailout money, leveraged it up and bought commodities including food.  Or, in the case of GMOs, pesticide edibles and herbicide resistance edibles.  I'm not sure they are actually food or not.  Maybe slow kill food, but that's not the same as "food."

This free money being tossed at commodities bid the price up of same.

This is true of oil.  Demand for oil is primarily dependent on the issuance of exponential debt, that is money.  Money **is** debt.  The asset that enables you to "feed your family" is exactly the same as the liability that will enslave your family.

By definition.

But apathetic and insouciant people don't worry about math, abstract mathematical monetary Sun Tzu Art of War models engineered to destroy their future, do they?

Here is inflation in credit issuance...  first chart:


The debt inflation chart is skewed high because of the true debts of financial institutions are being kept in a state of unrecognition.  You know, markt o myth, not reality.  My guess is that a mark to reality chart would indicate that outstanding debt is still below 2007 levels.  Perhaps by a significant amount.

This bolsters the idea that the bailout debt proceeds (aka, money) are being targeted at breadstuffs in particular.  This creates marginally higher demand which drives the price up.

This is nothing new as Andrew Jackson was commenting on the exact same Bankster tactic in the mid 1800s.

"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out!"
~President Andrew Jackson, from the original minutes of the Philadelphia committee of citizens sent to meet with President Jackson (February 1834), according to Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels - online PDF

Note what Andrew Jackson expected of the Banksters in his day...

"The bank, Mr. Van Buren, is trying to kill me, but I will kill it."
President Andrew Jackson, said to Martin Van Buren (8 July 1832) and quoted in The Autobiography of Martin Van Buren, published in Annual Report of the American Historical Association for the Year 1918, vol. II (1920), ed. John Clement Fitzpatrick, ch. XLIII (p. 625).  Referring to the Second Bank of the United States


Herd Redirection Committee's picture

Maybe they are making the hot dogs out of cochineal, hm?  Not just using it for dye!

El Vaquero's picture

LOL.  Good thing I'm not in the habit of eating hot dogs.  

Miffed Microbiologist's picture

The problem is it is rare today to find anyone willing to face reality. As people stuff themselves with hot dogs I suggest a tour of a sausage factory. They react in horror and refuse. So, if people innately know what they would find would be unpleasant why do they stuff themselves with such an offensive "food"? It scares me how detached from the real world people are today.


BlindMonkey's picture

"A comment so ridiculous you wouldn't even read it in a Mad Magazine."

The satire event horizon has been reached. Every 'real' event forward will be indistinguishable from a past or current satire. Laugh (or cry) accordingly.

Slave's picture

Rising prices must mean more aggregate demand! Because Ben with his helicopter fixed this mother fucker!!

Oh...that doesn't make sense? Neither does what he said.

Newsboy's picture

Time to lie to each other internally, the total-lie strategy, then these slips will be avoided. 

Lying to oneself first is the best strategy, before lying to others.

:-) happy, happy