The mainstream financial media continues to maintain the false delusion that inflation is a possibility that
might happen.
A few headlines from the last few days:
Traders eye data this week for whiffs of inflation
Rising food prices boost wholesale inflation
Producer price gain offers cautionary note on US inflation
Futures Hold Losses as Inflation Heats Up
… and of course, the obligatory delusional Fed claim…
Low inflation an 'ongoing concern': Fed's Lockhart
All of the above headlines miss the mark by a mile. Inflation erupted in the US years ago. The signs were present to anyone who actually engaged with reality.
What is inflation? The simplest answer is higher prices.
So… if you pay the same price for a smaller amount of a good by A) shrinking the package it’s presented in or B) not filling the package to the brim… that’s inflation.
If a company charges you the same price for a lower quality good (raising the price on a good of equal value)…. that’s inflation.
Corporations have been doing all of the above for years. Kellogg’s, Snickers, Tropicana, Bounty, Heinz, Frito-Lay, Reese’s, Pantene, Oscar Meyer, Tide, and others have all been shrinking the size of their goods packaging (selling less for the same price) or changing ingredients to use lower quality goods.
Heck, even toilet paper has been shrinking. The average toilet paper panel used to be 4.5 inches by 4.5 inches. Recently. Wal-Mart and other companies began selling rolls that were 3.9 inches by 4.0 inches.
This sounds like a negligible difference, but as The Consumerist notes, this adds up to over 30 fewer square feet per package of 18 rolls. In pricing terms, this is the equivalent to a 7.5% price hike.
Again… inflation.
The big problem with this is that NONE of these facts are well publicized. The Federal Reserve certainly isn’t going to be pointing this out. And corporations won’t do it either because it is effectively the admission of PRICE HIKES… something NO consumer wants.
So… don’t look for the truth about inflation to come from the financial powers that be nor from the financial media. We’re on our own on this one.
To pick up a FREE Special Investment Report outlining how best to prepare your portfolio from inflation, swing by www.gainspainscapital.com [7].
Best Regards
Phoenix Capital Research