From USA Today:
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.”…
Whatever one might thing of Wal Mart – plus or minus – it is Wal Mart’s business to know what is really happening with consumer prices. This is Wal Mart’s bread and butter. This is a far more reliable forecast than the twaddle coming out of the Federal Reserve that inflation is tame…something anyone who buys groceries or gas knows to be a lie.
The American public are being squeezed. On the one hand is Bernanke printing money like mad to support the banks, on the other is Obama who is deliberately refusing to allow Americans to create wealth…so, our prices are going up as our dollars decline in value while our wages remain flat or down because the economic pie is not growing. Because of this I fully expect another recession – and I expect it will begin in a few months, thought it won’t show up in the data until late this year or early next (just like the recession of 2008 really began in 2007, though hardly anyone noticed it in 2007). As Americans have to spend more and more of their disposable income on the basics there will be that much less demand for other goods – and as demand for non-essential goods is already low, any further drop will swiftly put the economy back in to recession.
Coupled with this is the looming financial crisis. Thanks to money printing, Bernanke has avoided a resumption of the financial crash which began in 2008 but it must be remember that the financial system is every bit as insolvent today as it was in September of 2008. And, in fact, it may be more so as free money from the Federal Reserve has likely made banks and investment firms even more irresponsible than they were before (and its not like they were exemplars of financial probity in 2008). Add in the coming collapse of the real estate bubbles in China, Canada and Australia; looming financial default in the Eurozone and the crushing weight of Japanese reconstruction and all the elements are in place for a full blown Depression.
Hopefully we can avoid it – but unless something changes very soon or we have an incredible run of good luck, I don’t see how we get out without a lot of pain.
Blogs For Victory 