Inflation surges to 9.1%, which is a 40 year high and higher than economists expected. Fox Business. The prices have increased by 9.1% since last June and 1.3% since this May. Both numbers are considerably higher than predicted. Core prices, which remove volatile energy and food prices, went up 5.7% from last year and .7% from May. Food, energy, rent and housing prices all increased as well. The high rate of inflation has wiped out wage increases. Joe Biden said the numbers were misleading as gas prices have decreased since highs in May. However, they are still much higher than they were before Biden took office.
My Comment:
As expected, the rate of inflation has continued to rise dramatically. This is the worst rate we have had in 40 years and it shows no signs of quitting anytime soon. Indeed, I expect things to get much, much worse.
Why? Because the drop of gas prices is temporary at best. Prices have decreased due to a combination of Biden emptying out our strategic oil reserves, China going back into coronavirus lockdown and people traveling less due to high prices. Only the third thing seems likely to continue. We are blasting through our oil reserves and we will have completely depleted it by this fall. And China will continue to go in and out of lockdown as long as they pursue the zero covid strategy that has largely failed for them.
Other energy prices are going to go up as well. Though we aren't as dependent on natural gas as Europe is we are using it quite a bit for producing power. With demand likely to raise dramatically due to sanctions related to the Ukraine war and the fact that Russia is gleefully cutting of Europe from natural gas, we should expect to see prices explode soon.
If there is any news that is good, wheat prices are starting to drop. Some wheat is getting out of the war zone in Ukraine and much of the environmental problems we had globally with winter wheat do not seem to be an issue with our summer crops. That doesn't mean that other food prices are going to drop, as much of the problem is related to transporting the food.
Speaking of food prices, I was pretty shocked last week when I got through my groceries without spending $100. I don't have a whole lot of groceries to buy each week, but I know just a few years ago I was averaging between $70 and $80 with more recent grocery trips costing closer to $100 to $115. And that's just for one person. How are people with three kids handling this?
I don't buy Biden's excuses at all. Slightly lower gas prices are not going to help things much. Having to pay $4.25 at the pump is better than $5 but we really need prices to be down to under $3 before we see things improve. And it's not like gasoline prices are the only reason why prices have skyrocketed, other energy prices are part of it as well. Not to mention the government printing money like it is out of style.
This is going to cause a recession. People are already starting to buy less stuff. I know that I personally haven't been spending as much as I could be. In my case it's more being cautious with my money but a lot of people just can't afford to buy all the things they used to due to massive price increases. This is going to eventually lead to layoffs and business closures. We are already seeing that in the high end electric car industry and other industries will likely follow suit.
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