Inflation Beginning to Show its Ugliness

If you look you’ll begin to see the charges increasing in certain industries.

Here’s two examples from just today:

1.  I spoke with the person that is in charge of all of our shipping today. He’s purchasing shipping boxes for us. Being in software we do more and more delivery via the internet and download and need less and less shipping of boxes. However, we do still ship boxes of software.

The cost of having boxes shipped to us has doubled in cost from just one year ago.

I asked him what about our costs for shipping to customers. Shipping a DVD case via UPS Ground costs us between $6 and $7 today. A year ago it cost between $4 and $5. That’s a 50% increase in just a year.

2.  Our local power company, Progress Energy, was recently rewarded with a $132 million rate increase by the state public utilities commission. With oil prices high, but nowhere near where they were 18 months ago, there is actually no justification for a rate increase except to cover increasing costs, which is, of course, inflation.

Don’t believe the government’s CPI (Consumer Price Index) numbers. The government fudges these to hold down inflation adjusted bonds that need to be paid back and to make the GDP (Gross Domestic Product) numbers look better. Just start comparing your bills now to last year and the year before to see if and how inflation is affecting you.

With unemployment still getting worse, not better, the Obama Administration and the Federal Reserve will stay under pressure to keep rates near zero. This will bring on more inflation as these low rates continue to devalue the US Dollar.

I wouldn’t sell that gold or other metals just yet. The US Dollar Index is being artificially held up because the Euro is presently devaluing more than the dollar is. This does not mean that the dollar is maintaining its value. On the contrary, when all currencies the US dollar is being measured against are devaluing the US Dollar Index would need to rise in order for the dollar to maintain its value.

Instead, we see the US Dollar Index remaining flat, which means it’s being devalued. It is for this reason that the US Dollar Index is not a good measure when one is attempting to value gold or commodities, such as oil.

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