Seven Things That Will Cost More in 2011

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This
is serious. The very mainstream AOL is warning about price inflation.

I guarantee
you that no one at AOL is anxiously waiting for the Fed money supply
numbers that are issued in the Fed’s H.6 release every Thursday
afternoon. They are writing about price inflation because they feel
it, and they think they can write about it without getting flack
from their readers.

If AOL writers
are noticing price inflation, it is a very ominous sign that price
inflation is about to kick to the next level, where consumers start
acting like prices will be higher in the future and thus cause an
acceleration in the price inflation process by deciding to hold
smaller cash balances.

Here are the
seven inflation points AOL is warning about:

1. A Trip
to the Grocery Store

The USDA
forecasts a 2% to 3% hike in the cost of all foods in 2011…Expect
a big spike in the dairy case and meat counter, where pork alone
is forecast to rise between 3% and 4%.

Keep in mind
this is AOL so they are buying into the USDA forecast of overall
2% to 3% food price increases. By the end of 2011, it’s likely to
be more like 10%

2. The Cost
of Gas and Heating Fuel

Some fast-and-loose
talk by former Shell
Oil President John Hofmeister says gas will be back to $5 a gallon

this year. That’s about $2 more per gallon than the current average
price of $3.05, says the Department of Energy.

I’m impressed
with this call. AOL discussing a near doubling in the price of gasoline.
Inflation at the pump. People are starting to feel it and suspect
more is on the way.

3. Health
Insurance and Medical Costs

Blue Shield
in California said it was going to raise premiums by almost 60%
and you can bet that your insurer has something similar planned.
Don’t look for much help from the government here. The Obama administration
wants individual and small-group insurers to justify when they
raise rates by 10% or more. But it’s a toothless gesture.

Consumers know
that ObamaCare is not going to cut health expenses.

4. The Cost
of Clothing

Cotton prices
are on the upswing and you’re going to feel it in the stitched
pocket. Cotton is now 80% more expensive than it was at the start
of 2010 and many manufacturers believe they have no choice but
to pass it on to you.

I don’t think
consumers are on to the coming boost in clothing prices, yet. AOL
is really giving its readers a heads up on this one.

Read
the rest of the article

January
12, 2011

2011
Economic Policy Journal

The
Best of Robert Wenzel

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