Tuesday, January 11, 2011

Seven Things That Will Cost More in 2011

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.

5. Colleges and Universities

For the 2010-2011 school year, tuitions are up by almost 8% at public, four-year colleges and 4.5% at private colleges. Expect more hikes for 2011-2012 as schools try to cope with a reduction in alumni giving, state funding and more students asking for financial aid.
Not surprising. The heavy government influence in education results in the entire sector being a mess.

6. Raising Kids

Let's face it: Kids aren't cheap. It isn't just feeding and clothing them, it's also sending them to soccer camp, arranging after-school care, paying for the math tutor. Babysitters charge as much as $12 to $15 an hour, even higher for late nights. Public schools are turning to parents to help them make up budget deficits.
Just another sector where inflation is becoming obvious.

7. Bank and Bank Card Fees

Checking fees, ATM fees, safety deposit box fees, talking to a teller fees. Our bank just charged us $3 to view a check that was cashed from our account; we had forgotten who we wrote it to and clicked on the online "view" button. Silly us. Lesson learned. New banking laws have meant new banking fees.
Nice touch here. AOL gets it that the Dodd-Frank Act and the new regulations is responsible for some of the increasing costs here.



  1. Wow. Kudos to them for getting the message out. The Austrians saw it first, the government will be the last to admit to it.

  2. The political terrorists in DC are going to starve you into obedience by printing money and proping up commodity prices. The murdering psychopath parasites need to produce hyper-inflation in order to "paydown" their debts.

  3. Thank You Federal Reserve !!! Nice to know that you are issuing another $600 Billion dollar poison pill to our society.

  4. Food has been going astronomical here for over a year now. Public school added fees are over a hundred annually for core required subjects. This does not include extracurricular. So much for "free" education for the poor. Utilities are a growing nightmare. Add to that creative tax revenue by law enforcement by fraudulent traffic violations and economic disaster is here. Looking at real world reality versus "official statistical data" convinced me long ago that even most libertarian and Austrian writers don't realize how fraudulent the data is. Collapse for the middle class outside of the cartel is now, not 10-20 years away.

  5. The mentally retarded bratty parasites (Liberals) will disagree with you.

  6. The voting public school peasants have no idea that they are voting themselves into slavery. The feebleminded runts try to vote themselves something for nothing and end up with nothing for something. Medical insurance has gone up 35% in the last 2 years as the payers pay for the voting parasites who want "Free" medical care. The are truely brats and psychopaths.

  7. Americans are getting what they deserve, good and hard.

  8. Wow, what financial geniuses these AOL writers are. They pretty much identified all the major consumer groups of living as being prone to inflation.

    I think we have a candidate for the next Fed Reserve chairman.

  9. Very on spot catch. Out here in West Texas this last half of the year, we saw very few circles of peanuts compared to cotton. My brother and I made a considerable amount of pocket change putting tarps on modules of cotton, and the gin we were working for couldn't get enough tarpers and drivers.

  10. The collapse is taking place in slow, very slow motion. Before you know it though, we'll be cooking in the boiling water. Be prepared. Gold, silver, food, garden, tools, guns and ammo, more food, water and accessories for filtering, seeds, sleeping bags, friends, more food, etc., etc., etc.

    It's coming!

  11. Unless global financial markets experience a 2008-like stock market and commodities crash (which is not completely out of the question), prices for food are going much higher than the AOL projected 10%. Wheat is up over 75% Year over year, and just about every other commodity is up over 30%. Once companies can no longer take the price compression they are forced to deal with by not raising prices on the retail side while their production costs sky rocket, we're looking at very rapid and massive increases in all essential goods like food and energy.

    Of course, dotGOV and interested parties like the Fed will suggest it is all 'speculators' causing the price bumps, but the reality is that the US dollar is being purposefully weakened (to what end, I can only guess), which will lead to continued price increases in the future.

    Perhaps we see 25% increases in food this year. 25% in 2012, and when the Chinese finally pull the plug on our credit card it will go parabolic, at which point we're all toast. Hyperinflation can happen overnight in the event China pulls out of US debt instruments (and the rest of our creditors follow), or, the more likely scenario, it is devalued over the course of several years... Zimbabwe started with inflation rates of 25% per year too... 6 or 7 years later it was in the thousands of percent annual inflation.

    However it happens, one thing is clear: Just as the US dollar has lost over 95% of its value since 1913, it will continue to depreciate against other assets, especially commodity-based assets, going forward - and there's not a dawg'on thing our elected officials, appointees or the Federal Reserve will do about it.


  12. What about Health insurance costs? They have ripped off entire country with unlimited cost increases.

  13. where is the tar and fethers for these scum bags/

  14. Wow! They didn't even mention the increases in the price of tar and feathers. Don't think the Fed and Obama are worth the expense...

  15. Its time we start the next revolution.