The Wall Street Journal and Zero Hedge have recently both come out with a strong and dire warning (really more of a prediction actually) about an upcoming wave of inflation, coming to American cities near you soon. Zero Hedge put it this way in summarizing the Wall Street Journal:
“Many U.S. consumer staple and industry leading companies are either already in the process of raising prices, or have set concrete plans to do so in the very near future.”
This is not just a shadowy vague threat for the future either. According to the Journal and Zero Hedge, price increases have already started or are imminent. Airlines report having already increased their fees and fares in order to compensate for higher fuel costs.
Soft drink firms like Coca-Cola disclosed higher prices for their products in the third quarter. All-important trucking costs rose by a sharp seven percent for the year just back in September.
As far as the coming year 2019 goes, Mondelez International is leading the way forward with promises of higher costs. You may not intimately know this food giant’s name, but you definitely know the brands they own. These include the likes of Kraft, Nabisco, and Nestle (in the United States). Mondelez Chief Executive Officer Van de Put announced that the company will simply pass through the higher transportation and raw ingredient costs to their buyers.
In terms of eating out, the price increases are fairly substantial too. Chili’s Restaurants have increased their pricing of the popular two entries and appetizer couples deal by nearly 15 percent (from $22 up to $25 for the quarter). Habit Restaurants increased menu pricing 3.9 percent back in May 2018 even with their restaurant traffic slipping by 3.4 percent. The ubiquitous fast food chain McDonald’s saw higher hamburger prices.
Beloved Apple electronics prices are also skyrocketing these days. Apple increased the prices on its popular iPad Pro and MacBook Air devices by a staggering from 20 percent to 25 percent.
The inflationary bad news just keeps on coming in across the board too. Tariffs on imports have boosted the costs for cabinets and counter tops around 10 percent. Paint prices at household name Sherwin-Williams are up approximately six percent for October.
The CEO of Sherwin-Williams John Morikis blames this on an “unrelenting and accelerating inflation” in raw materials costs. This chart below demonstrates what he means by rising raw material costs, up significantly from 2017 to 2018 in nearly every major category:
ZeroHedge reminds you that unfortunately higher and increasing prices work hand in glove with the Federal Reserve boosting interest rates to stifle the growth and future prospects for the American economy, with:
“Higher prices could cause even more damage if the Fed sees raising rates as the main solution to inflation exceeding its expectations.”
Now these increasing interest rates are dangerous for the U.S. economy that has been constructed heavily based on debt. This clear and present threat includes government, business, and consumer indebtedness. The federal government has run up a historically all-time high of over $21 trillion in national debt that it can never possibly hope to repay.
Yet it will it will have to continuously service this monstrous mountain of debt at increasingly higher and crippling interest rates forever (or until it defaults on this debt, unleashing massive financial chaos and havoc on the U.S. and global economies on a scale not seen since the fall of the Roman Empire). This alarming fact alone should be enough to motivate you to take action to protect your retirement portfolios while you still can.
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