HIDDEN INFLATION

H/T Surviving in Argentina

A month or so ago I bought a bag of charcoal at Lowe's and paid about $8.50 for it. Sticker shock!! A couple weeks ago we went to Alps, a local discount grocery where we do most of our shopping. I saw a bag of charcoal, same brand and same size bag for about $5.75. Woo-Hoo!!

I'm sitting outside by the pit, cooking syrup and I look over at the new sack. The one I got at Lowe's was 20 pounds which has always been the standard size. The new sack, even though it appeared to be the same size container, held only 16.8 pounds.

My wife and I have been watching this happen over the last year or so. I was happy to find this video because it graphically illustrates something that I don't think most people have been paying attention to.

The most recent measurements of consumer spending showed a 2.8% rise to the highest level in three years. All the financial talking heads went wild saying this was just further evidence of economic recovery. Really?

My guess is that it's just further evidence of inflationary increase in the cost of living. We're not buying more stuff. We are probably buying less, which would account for the drop in durable goods and housing. The rise in consumer spending is the result of spending more of the money we have less of to buy fewer goods because the price of everything has gone through the roof. And it's just beginning.

Everything we see,read or hear about the economy is an illusion, just like the toilet paper rolls in the video above and the charcoal sitting by the pit. At least the toilet paper has a useful purpose.