I mean, about inflation for you and me and Bobby McGee. Not inflation as bankers see it, as economists see it, as central bankers see it. Not about CPIs and PPIs and HICPs. Not about price-adjusted, calendar-adjusted and average-workday-weighted statistics, which economists so fondly call "real" inflation.
No, I want to talk about the little "hiccups" of rising prices as Joe or Jane Sixpack feel them. As you and I feel them ... out there in the real economy, out there at the cashier counter, at home facing electricity bills, water bills and rising taxes.
I leafed through My completely non-representative bills for any random month here at the rancho Wadhwa (see photo). And this is MY statistic of how much prices moved over the past year:
Electricity up 14%
Water/community taxes & services up 8%
Hay/straw up 18%
Horse fodder up 6%
Dog/cat food up 9%
Heating oil (hahaha) up 29% - I was lucky, I filled the tank last autumn!
Petrol (for the car) up 80% - AND rising!
I could add to that general food prices which were up anywhere between 20% and 50% here in Germany (and not much less in most other countries around us).
Need I carry on? .... Ok, ok, you might call the equine part of my cost structure an extravaganza untypical for you average consumer. Fair enough. But that's really besides the point. Fact is that practically EVERYTHING you, we consume, has seen steep and steeper price rises. And it's euphemistic economist and/or central banker gobbledygook to try and tell us that INFLATION IS NOT A PROBLEM.
You just have to walk home from the supermarket with your daily, weekly shopping and see for yourself. You just have to look at your monthly bills and see for yourself. Let alone drive away from the petrol station...
Read my lips: Inflation IS a problem. Statistics, if anything, don't do justice to it. People feel the pinch of rising prices - every day. Wages have not kept up at all and shall not do so in the near future either. The so-called FELT inflation is possibly even higher, because certain items - like petrol, heating and food - have risen over-proportionately. That's why the consumer doesn't go shoppa-happy. Simple.
So for any central banker, economist or analyst to step up to the camera and declare brazenly that INFLATION IS NO PROBLEM ... well, I for one find that downright reckless.
Of course, there IS one snag: Thanks to gross mis-speculation, incompetence and downright failure of large enough parts of the banking systems, we happen to have even bigger problems than inflation right now. But that doesn't mean the inflation problems will go away ... On the contrary. They will come to haunt us again. With a vengeance.
Ciao for now!
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