Mrcauser’s Weblog

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Check out Walmart for inflation…..

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Smaller packaging same price. Price for ounce goes up. Buy less and inflation stays in check statistically. But Walmart domestic sales are down. Big shots in the company are running scared and trying to save the stores margins. A lot of these guys have lost their jobs for fucking up and trying to cater to upper middle class woman with Martha Stewart, Hanna Montana, cooking guru Paula Odean etc. They remodeled the stores and removed the impulse counters in the middle of the aisles and discontinued many favorite items like the institutional sizes and we lack rapid replenishment of everyday items that consumers have been buying for years.

Not exactly a recipe for success you know!

Gonzalo Lira: The Boiling Frog: Effects of QE2 On The Bottom 80% of the U.S. Population

We can’t because, as prices rise, people buy less of a necessity: Higher gas prices means people drive less. Higher food prices means people eat less, or less quality of food. Higher heating oil prices means people heat their homes at a lower temperature—or in some cases not at all.

But although we can’t easily quantify it, we can comfortably make certain claims about the effects of rising consumer prices on the population.

The first claim I would venture to make—and one that I don’t think will be particularly controversial—is this: Any household spending more than two-thirds of their after-tax income on food, housing, clothing and transportation will suffer an immediate, negative impact from the Fed’s efforts at induced inflation.

That covers pretty much the bottom three quintiles of American households. So 60% of the U.S. population will suffer an immediate effect of rising prices—the stated policy goal of Ben Bernanke’s QE2.


Written by mrcauser

November 21, 2010 at 8:52 pm

Posted in Uncategorized

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