Thursday, April 21, 2011

McDonald's Doubles Its U.S. Inflation Rate Forecast

Get ready, the BIG inflation is coming.

Here's more anecdotal evidence. McDonald's now expects food costs to rise between 4 percent and 4.5 percent in the United States this year. That is up from its prior call for a rise of 2 percent to 2.5 percent. Expect the forecast to be raised again in coming months. Bernanke can't get away with printing the money he has since the financial crisis bailout started and not expect eventual price inflation ramifications.

Chief Financial Officer Pete Bensen said McDonald's in March put through a 1 percent menu price rise in the United States, and that it plans additional increases. It's still holding on to it's dollar menu, but that's going to be tough to do through the end of the year.

Of course, there is another view on inflation from Paul Krugman. Earlier this week, he wrote:
....there’s nothing here to suggest any reason to consider inflation a problem.

1 comment:

  1. The real rate of inflation, which is not reported by the Fed and curiously little considered by the financial press, is 2X to 3X what the Fed reports. This is the mechanism by which government debt is funded, and it will lead to a loss of value of the dollar of between forty and sixty percent. Forget gains. Preservation of wealth should be an investor's entire focus. The 40% loss of household wealth in the '08-'12 period is only a beginning.