“U.S. consumers face “serious” inflation in the months ahead for clothing, food and other products, the head of Wal-Mart’s U.S. operations warned Wednesday.”
The world’s largest retailer is working with suppliers to minimize the effect of cost increases and believes its low-cost business model will position it better than its competitors.
Still, inflation is “going to be serious,” Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY’s editorial board. “We’re seeing cost increases starting to come through at a pretty rapid rate.”
Along with steep increases in raw material costs, John Long, a retail strategist at Kurt Salmon, says labor costs in China and fuel costs for transportation are weighing heavily on retailers. He predicts prices will start increasing at all retailers in June.
“Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along,” Long says. “Except for fuel costs, U.S. consumers haven’t seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory.”
Consumer prices — or the consumer price index — rose 0.5% in February, the most since mid-2009, largely because of surging food and gasoline prices. Core inflation, which excludes volatile food and energy costs, rose a more modest 0.2%, though that still exceeded estimates. Source: USA Today (1)
Wal-mart effect prevalent?
The Wal-Mart Effect is the centralization and concentration of grocery stores resulting in the closure of smaller neighborhood grocery stores. These smaller stores, often bought by one of the handful of chain stores, are closed because they are deemed insufficiently profitable. The new big-box stores are being opened up mainly in low-density, suburban areas where people have greater disposable income and cars. These big-box stores are also near-monopolies, meaning they can dictate prices to producers and have control over shipping costs. This gives them further advantage in undercutting small grocers who can’t buy either in volume and have to pay higher costs for product and shipping. They are also likely getting less tax-breaks and land-deals from municipal governments who shill for the developers opening the door for big-box grocers to serve relentless urban sprawl.
The result is that many poorer, densely-populated neighborhoods are now “food deserts” – with no grocery stores within a reasonable walking distance (15-20 minutes). People have to spend more on transport, whether public transit, taxis or gasoline for their car. It doesn’t help that cities feel the need to increase transit fares every single year.
As a result, people are relying more upon fast food which is more expensive and less healthy, but present at even the smallest commercial strip.
With real wages stagnant for the middle 60 percent of income earners over the past thirty years, and real wages falling for the bottom 20 percent, people are also working longer hours at more jobs. Full-time employment is becoming increasingly scarce as claims about new jobs demonstrate that part-time, low-wage service sector work is “making up” the loss of full-time employment. Time is tight and traveling to grocery stores and preparing food is becoming a secondary concern.
A lot of people will simply say “it’s the individual’s fault.” They can make the effort, apparently, to remedy this. This is a total cop-out. We shouldn’t accept living in cities where grocery stores are out of reach and food costs are rising if we consider transportation costs and real wages.
A policy of maintaining existing and building new neighborhood grocery stores wouldn’t require too much genius. It requires some work on zoning, perhaps subsidies or tax-breaks as incentives, and a grassroots campaign to build up public support. This is the sort of politics that we just don’t see anymore.
Too bad we didn’t have honorable leadership in our countries. If they were honorable, they would force government to live inside its means in one fell swoop. You can’t run an economy on debt, delinquency without serious repercussions. This is unfolding more like the Great Depression than anyone realizes.
Oil is turning out to be much more stable in purchasing power than currency. If your property taxes go up 10 %, then oil seems to follow. Let the oil dividends pay your property taxes and you don’t have to worry about inflation as for 8 years now they go hand in hand.
Government/bank fraudsters don’t want you to realize this or you might demand to get paid in oil, gold, silver or even copper. If I were union, I wouldn’t go for a raise but would go for my wages directly indexed to a basket of commodities like oil, gold, silver, wheat, barley, oats; as you can’t trust government inflation numbers any more, like the rest of government they are full of bullshit.
Inflation a natural phenomenon?
Not at all. In fact inflation is a sign of sickness. As we mentioned ad nauseum previously, Roman inflation also coincided with the fall of Rome. Much like we see with the USA where China is going to be the next economic super power as the USA falls.
In fact, the most economical stable growth and prosperity in USA history was 1879 to about 1912. Zero inflation yet the economy was growing and lots of jobs. People came by the boat loads and job, jobs everywhere. The founding years as USA became a superpower.
But then came greedy government and greedy bankers who wanted to unlink currency from value, in 1914 they broke the link between currency and value and inflation picked up. A $ 19 to 20 ounce of gold in 1900 is $ 1500 today. Currency has devalued. Yet gold was $ 19 to 20 and ounce from 1887 to 1914. During this period even the stock markets were solid like a rock with none of today’s gyrations.
Government prints more valueless money and inflation runs. Look at modern day currency as a depreciating stock. You own stock in a valueless currency that is only as good as you can trade. Trade 8 bucks for coffee this year, well next year they want 14 bucks because the currency no longer has the same value.
Governments want this, as would you rather tax $ 2 litre or $ 1 litre for fuel? Government will not tell you, but this is what they want. That is also why government statistical agencies lie so blatantly about inflation. The whole premise of government strategy is to get you to pay more for government, be taxed and hope you don’t revolt.
Reserve banks are fraudsters. And with corrupt government they cause inflation. So in fact this is the kettle calling the pot black. Who gains from inflation? Government and banks. Who loses? The working and fixed income. Governments and central banks are increasing there debt slavery to the people. People need to consider organizing for a better deal and a static immutable currency we can count on or those backing it get publicly flogged.
Because oil, energy, gold, silver, copper, wheat, barley, flour, lettuce, coffee etc. didn’t go up, the value of fiat currency went down. All to enslave people with less return on their works. We doubt your employer would pay you in gold or oil, because they enjoy getting more income for you lower valued efforts. Indeed, it is all about managing the herd.