Secret Walmart Survey Shows Inflation Already Here

[WestVirginiaRebel]

CNBC:

There might not have been a second round of quantitative easing, if Federal Reserve Chairman Ben Bernanke shopped at Walmart.

A new pricing survey of products sold at the world’s largest retailer [WMT 54.13 -0.21 (-0.39%) ] showed a 0.6 percent price increase in just the last two months, according to MKM Partners. At that rate, prices would be close to four percent higher a year from now, double the Fed’s mandate.

The “inaugural price survey shows a small, but meaningful increase on an 86-item grocery basket,” said Patrick McKeever, MKM Partners analyst, in a note. Most of the items McKeever chose to track were every day items like food and detergent and made by national brands.

On November 3, the Fed announced its much-anticipated purchase of $600 billion in Treasury securities. An effort to keep market rates low since the central bank’s benchmark rate is already at zero. The Federal Open Market Committee’s statement said, “Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate.”

But since that statement, interest rates have actually gone up, backfiring on a Fed chief who wants his quantitative easing to spark inflation of 2 percent annually. A moderate amount of inflation would be considered good for the economy. The problem is that inflation is already running well above a healthy level, investors said, Bernanke is just not looking in the right place, like a Walmart.

“I suspect that when the Chairman thinks about reflation he has a difficult time seeing any other asset besides real estate,” said Jim Iuorio of TJM Institutional Services. “Somehow the Fed thinks that if its not ‘wage driven’ inflation that it is somehow unimportant. It’s not unimportant to people who see everything they own (homes) going down in value and everything they need (food and energy) going up in price.”
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People notice inflation, even in small amounts.

[Valin]

WestVirginiaRebel

 

Over the last couple of months whenever I mention the I word, people nod and say they are expecting it.

[Evad]

[AceRimmer]

I went to the grocery store early this morning to get some beer and pops. I also wanted to pick up a ribeye and potato for dinner tonight. Only when I saw that the ribeyes were about $3 higher than normal did I settle for the beer and soda. I'll go to Wendy's and get a burger before I pay $10 for a steak that I have to cook myself.

 

BTW: restaurant prices have skyrocketed, locally, in the past few months since the oil spill.

[Pepper]

(I am sorry, this is fiction. My heros are Sudeep Reddy from the WSJ and Ryan Chittum from the Columbia Journalism Review who said Palin was wrong on inflation.)^sarcasm