I'm suprised inflation wasn't higher than they're claiming. Energy costs weren't the only thing that shot up last year...the cost of food also went up quite a bit, thanks to a big jump in corn prices fueled by the Bush administration's push for ethanol production (according to the Department of Unintended Consequences).
Corn is a major component of the U.S. food supply. Livestock, dairy products, anything using corn or corn derivatives are directly affected.
WASHINGTON - Wholesale inflation last year shot up by the largest amount in 26 years while retailers suffered their worst December shopping season in five years as mounting economic woes caused consumers to put away their wallets.
The Labor Department reported that wholesale inflation was up 6.3 percent for all of 2007, reflecting a huge increase for the year in various types of energy costs ranging from gasoline to home heating oil.
3 comments:
Everything is affected. Everything. High gas prices make shipping and distribution of any product (food or otherwise) costly. Corn demand causes other crops to not be farmed, and demand for feed corn goes up, driving prices of that limited commodity up, which drives beef up, among other things.
Don't forget that one main component of most US food is High-Fructose Corn Syrup... so there goes the price of that, too.
One tiny benefit may be that as prices go up, we see companies switch to sweeteners (and thickeners -- check out "fat free half and half" -- HFCS!) that aren't corn based.
Seriously, what jackasses didn't see this coming? Economists are supposed to be smarter than the average bear. Where were they when this started? Huddled in their underground bunker, laughing as their corn futures went up in price?
*bangs head on desk*
It's definitely going to get ugly...the ethanol push has such far-reaching effects that evidently weren't considered when this plan was hatched. The shocking thing to me is how basic staples like eggs and milk skyrocketed in price last year. Let's see, who does that hurt?
I'd better get that victory garden started, and maybe add a chicken coop.
This makes my head hurt...I think we are about to reach some kind of economical tipping point that will not be good...Factor in basic needs inflating with the bleak economical outlook. I guess I have always of a basic concept that you can't have bad inflation with a recession...but that looks possible.
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