As you probably heard, on Thursday the government reported inflation was up 7.5 percent for the year ending January 31, the highest inflation rate in 40 years. As you may know, the government calculations under-report inflation compared to the standard used 40 years ago. According to Shadow Stats, inflation would be 15.65 percent unde the rules used in 1980 insead of the lower number reported by the government. Based on the older calvculation, inflation is at its highest level since 1947.
Anyone who’s been grocery shopping lately doesn’t need the government to tell them prices are rising, and by more than 7 percent. They know because they see it firsthand. Below are two examples from my life.
I went out on Monday for an appointment and then again on Wednesday. Somewhere between those two days, the cost of gasoline jumped 14 cents per gallon, or more than four percent. It’s now up about 80 percent since Biden was elected. Why? Because he killed the Keystone pipeline and implemented rules that restricted new drilling activity. The industry pulled back to avoid losing money as Biden emphasized green energy over fossil fuel. The result of Biden’s action made the U.S. move from a net exporter of oil to an importer.
The cost of crude oil has continued to rise, topping $90 per barrel. $100 per barrel is in our near future and there is some speculation that we may hit $150 or even $200 per barrel. I think the $200 figure is unlikely because many frackers are increasing drilling and production since it’s much easier to make money t $90 per barrel than it was at $40 or $50.
In the post I made on February 4, about a week ago, I talked about buying two six-packs of canned chicken from Sam’s Club in late January and having them shipped to me. Each six-pack cost $11.78, or $1.96 per can, as you can see in the image from my electronic receipt.
I just checked their website, and the exact same six-pack of canned chicken was now $15.98 or $2.66 per can. That’s an increase of 36 percent. Apparently, Sam’s Club raised prices on or about February 1. (Makes me wish I had bought a few more.)
Because of our Prepper Pantry Inflation Monitor, I have records of that product’s price going back a year. In February 2021, the six-pack of chicken was $9.98, or 1.66 per can. In one year, a 12-ounce can of chicken has gone up 60 percent, or $1 per can. That is a HUGE increase.
But you want to know what is worse? The equivalent product is $17.49. One year ago, in February 2021, Costco had it on sale for $9.49. That’s a whopping 84 percent increase.
We’ll publish another prepper pantry inflation monitor at the end of the month, but that figure alone should hint at what it will look like. If you took my advice and stocked up a year ago, you saved yourself a pretty penny.
No End in Sight
I’ve read a few articles in which people suggested that the supply chain disruptions may start to resolve themselves in the second half of the year. At the same time, I’ve read others reports that see no sign of it ending. With the unrest in the world and the threat of COVID-19 hitting China and curtailing production and shipping, I don’t think we’ll see much relief. Either way, it won’t affect inflation much. All the money Biden and the Fed pumped into the economy in the last year are as big or bigger a problem as the supply chain disruptions.
The rising cost of energy will also keep prices high. Unless there is a recession, we can expect prices to keep rising through 2022. Brace yourself.