I remember what my mom and dad said about the inflation of the 1970's. My dad called it the "thief of the night" because it robbed the people of purchasing power and lead to retirees on fixed incomes having to go back into the job market just to get by. They called in "stagflation" at the time! Does this sound familiar! I ran into a friend of mine "Doug" working at a local gas station. I asked him if he retired from his job as a service rep. for a beverage firm, and he told me that the gas station was his 2nd job. He explained that he had to get the 2nd job to pay his bills. Then, the 60 year old clerk standing next to him added that she retireed and had to work there to supliment her social security.
As most of my blog readers know, I have been commenting on the hidden inflation rate that has been eating into the purchasing power of the average American for years. We have a government supplied inflation rate measurement that doesn't take in "food, medication and energy" into the equation for inflation. This false number is used to give retirees and workers cost of living increases every year. Well, if you understate inflation by 2-4% every year, the compounding of this it would lead to a 10-20% cut to your standard of living every 10 years!
Read the following article for a view on stagflation-
February 21, 2013
The Wal-Mart Indicator: We're Heading for a Stagflationary Disaster
In the second half of 2012, the media, Federal Reserve, and various Governmental economic bean counters engaged in what we call Great Global Rigging of 2012 in an effort to make the US economy look better to help the Obama campaign re-election bid.
Now that the election is over, the ugly economic realities have begun to creep out from where they were swept under the rug. And while the official economic data is bad (a negative GDP in the fourth quarter of 2012), it's nothing compared to what real-time indicators are showing:
Wal-Mart Stores Inc. (WMT) had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.
"In case you haven't seen a sales report these days, February MTD sales are a total disaster," Jerry Murray, Wal- Mart's vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. "The worst start to a month I have seen in my ~7 years with the company."
Wal-Mart and discounters such as Family Dollar Stores Inc (FDO). are bracing for a rise in the payroll tax to take a bigger bite from the paychecks of shoppers already dealing with elevated unemployment. The world's largest retailer's struggles come after executives expected a strong start to February because of the Super Bowl, milder weather and paycheck cycles, according to the minutes of a Feb. 1 officers meeting Bloomberg obtained.
http://www.businessweek.com/news/2013-02-15/wal-mart-executives-sweat-slow-february-start-in-e-mails
Here's Wal-Mart, the single largest retailer in the US, reporting that it just had the single worst start to any month in over seven years. Indeed, the company missed just revenues expectations as families adjust to a "reduced paycheck and increased gas prices.
The increased gas prices is most important. Inflation is already seeping into the system in a big way. Indeed, if you account for real inflation (not the Fed's phony CPI measure), the US economy contracted by over 1% last quarter.
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