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Consumer prices surged 0.4% in April, as higher gasoline prices accounted for more than half the increase, according to government figures released today (May 13).

Consumer prices have now risen 3.2% over the past year. As recently as November, the 12-month increase was 1.1%, according to MarketWatch. The government's "food at home" index, which doesn't include restaurant and takeout orders, zoomed 0.5% in April and has gone up 3.9% over the past 12 months.

The Federal Reserve, however, watches the so-called core rate of inflation, which excludes food and fuel. It only rose 0.2% in April. So the Fed will probably continue to shovel out more liquidity and the dollar will keep dropping. The dollar's weakness is one factor in the rise of oil and other commodities prices. The key is that average hourly earnings of U.S. workers fell 0.3% in April after adjustment for inflation and are down 1.2% over the last year.

Recent drops in commodity prices (oil went from $115 to $100 a barrel) may eventually bring lower gas prices, but, says MarketWatch, "Oil prices would have to continue to drop to offer consumers much relief."

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Founder May 13, 2011 @ 7:10 a.m.

This is just the first "tick" on the "individual" finance chart that will project doom for what is now left of the middle class...

I think the real triple dip on housing prices is on it's way (if it is not here already) and here is why:

Wall Street rules now and they want to make damn sure that Americans can NEVER use their homes as banks again... Remember the good old days when folks were buying and selling homes because they could make more money than investing in the stock market; well those days are GONE thanks to the cozy relationship between the Fed and Wall Street. Never again at least in our lifetimes will folks get to do that, as Wall Street and the Big Banks tag team the economy, while the Gov't. cheers them on!

How bad can it get, how about home values one quarter to one-third of what they were at the peak of the market! That way even those home owners that have small mortgages at good rates will be "locked in" for the near future!


Visduh May 13, 2011 @ 8:33 a.m.

Founder, you seem to think that it is a bad thing that homes are no longer going to be bank accounts. One of the reasons that homes have been so costly and out of reach for so many people is that speculators got into the mix and played the craziness for pecuniary gain. Homes are not, in the usual economic definition, "investments." They are actually durable consumer goods in that they produce nothing (such as a factory, mine, retail store, etc.) and eventually wear out and need to be replaced or rebuilt. That speculation started in the 70's as the baby boomers started to "play house", and continued until about 1980 when sky-high mortgage interest rates choked it off. Later there was a big run-up that peaked in 1989, and then the latest bout of craziness. Homes should be something we live in, care for, and enjoy. They should never become a personal ATM or something that preoccupies ones every waking hour. If you can pay off a home and then draw on its value during retirement by way of a reverse mortgage, that is fine, but trying to milk money out of your home as you go along just distorts everything.

The pain has not ended yet for those who grossly overpaid for homes in the past decade or so. Maybe, just maybe, this adjustment will get home prices back in line with the incomes of real working people and avoid another round of speculative madness. One can only hope.


Founder May 13, 2011 @ 11:03 a.m.

Sounds great if you are wealthy and want Wall Street and Big Banks to keep profiting on the backs of the middle class!

Homes or stock investments they all both investments and taking money out of either just benefit a different group of business people!

I'd rather the middle class get jobs and or Gov't financing to buy homes and start living the American dream again instead of the current American Fiscal Nightmare!


Don Bauder May 13, 2011 @ 8:03 a.m.

As the Fed keeps interest rates close to zero, prices of commodities denominated in dollars, such as oil, will tend to rise, screwing the consumer. The consumer is also screwed by zero interest rates, which make savings rates below 1%. Stocks go up, as the Fed desires, feeding the richest 10% at the expense of the rest of society. But remember: the big banks run the Federal Reserve. Bernanke is working for the banks, not for you. The big money in the U.S. wants unemployment to remain high so Bernanke will keep shoveling out near-zero interest rate money. Best, Don Bauder


Founder May 13, 2011 @ 8:07 a.m.

The Middle Class takes it in the "shorts" again...


Don Bauder May 13, 2011 @ 10:41 a.m.

Tax and monetary policy since the 1980s is destroying the middle class. That's exactly what our leadership wants -- a plutonomy, or an economy that only benefits the rich. However, businesses that cater to middle-to-lower income people will wake up one day and wonder where their markets went. It will be too late. Wal-Mart's same-store sales (sales in stores open at least a year) have been weak for more than a year, particularly in the U.S. Best, Don Bauder


Founder May 13, 2011 @ 11:06 a.m.

America is like Great Britain after they lost the Colonial War, America is on it's way down as a World Leader and the wealthy are hell bent on solidifying their position (and control) over the working masses!


Don Bauder May 13, 2011 @ 5:25 p.m.

There are definite similarities between the decline of Great Britain and the decline of the U.S. Best, Don Bauder


Visduh May 14, 2011 @ 8:48 a.m.

One of the missteps made by Walmart was to reduce or eliminate some lines of merchandise that they thought appealed to low-income customers. They used the space to add things that were "upscale" in an attempt to reach a better-heeled customer (the market segment that Target caters to) and it flopped. Now they're putting those things back into their stores. Who, pray tell, did Wally's World think they were reaching? It was obvious here in SD County (painfully obvious to me) that their core of customers were the low-income and minority groups. Oh, yes, one of those low-income merchandise lines was fabrics for the DIY crowd. I never thought of those as something that appealed to any certain economic group, and I'd wonder of the poorest folks even have sewing machines or the inclination to use them in their spare time. Bentonville should have known ahead of time just who bought various things, and who would buy others. It appears that they were using educated guesswork and guessed wrong.


Don Bauder May 13, 2011 @ 10:36 a.m.

Response to Visduh 8:33 a.m.: Good points. Homes became gambling chips several decades ago in hot markets such as San Diego. Then the gambling went berserk in the early 2000s -- particularly in still-hot markets such as San Diego, although Phoenix and Vegas went crazier and took much bigger tumbles from their peaks. I believe it will take some time before housing prices get back to levels consistent with consumer income, economic growth, etc. It was a colossal bubble that burst and it won't snap back soon. Best, Don Bauder


Founder May 13, 2011 @ 11:08 a.m.

Consumer income is on it's way down toward peanuts and for most folks home ownership is but a past dream, since home loans are now almost impossible to qualify for!


Don Bauder May 13, 2011 @ 9:13 p.m.

Inflation-adjusted consumer income has been flat for a long time. However, it normally does not drop quickly -- just a slow descent. Best, Don Bauder


Don Bauder May 13, 2011 @ 5:23 p.m.

Response to Founder's comment of 11:03 a.m.: Yes, it would be nice if our leadership tried to help people get and remain in homes rather than help Wall St. get even richer. But that's not how things work these days. Remember: the Federal Reserve exists to massage Wall Street. It doesn't give a hoot about Main Street, despite its rhetoric. Best, Don Bauder


Founder May 13, 2011 @ 6:25 p.m.

Sad, but true! Both Party's have sold out to the Wealthy, despite their rhetoric... BEST


Don Bauder May 13, 2011 @ 9:15 p.m.

I'm afraid you are right. Both parties have sold out to Wall Street and those with higher incomes. Best, Don Bauder


Founder May 14, 2011 @ 7:47 a.m.

Business is giving US the business

If gun legislation is passed that will to me indicate the Wealthy are getting nervous about the economic divide.


Visduh May 14, 2011 @ 8:51 a.m.

Who keeps campaigning for gun control laws, and outlawing various firearms? It is the self-proclaimed liberals in almost all instances. Does that tell you something about them and what they fear?


Don Bauder May 14, 2011 @ 11:10 a.m.

There are a lot of wealthy supporting liberals. They have always been called "limousine liberals." Best, Don Bauder


Don Bauder May 14, 2011 @ 11:08 a.m.

I don't think the wealthy have historically favored anti-gun legislation. It's usually the so-called conservatives who are against gun control. But your point is something to think about. Best, Don Bauder


Don Bauder May 14, 2011 @ 11:05 a.m.

Response to Visduh 8:48 a.m. May 14: Yes, Walmart's paring of downscale product lines in favor of trying to go upscale may be one of those business mistakes that lives in infamy, rather like Coca-Cola's attempt to kill its old formula and impose a new one on customers. Best, Don Bauder


Twister May 14, 2011 @ 8:31 p.m.

We've got two choices, frugality or poverty, and the wealthy will soon outlaw the former, leaving the latter.

The squeaky "liberals" are just spoiled brats who know nothing of real life, much like the so-called "conservatives" who are consumed by the delusion that they can win the lottery or otherwise realize the American Dream of conquest (which should be known as big-time looting). These unfortunate fools "know" only what the Mad Ave spin-meisters want them to believe. Both, unfortunately care little for the hard work of thinking on the basis of what IS, and prefer the fantasy of what "should be."

Tragically, these "camps" include some very smart people who have gained some success and have been "dumbed-up" by their reflections rather than reflecting upon their errors.

But as I have proposed before, parasites soon exhaust the supply of victims, sealing their own fate. We've seen McArthur slay the "World War I" vets, Kent State, and the current grinding poverty and abandonment and slow death to which we are consigning our current heroes ((9/11 first-responders and "Desert Storm to Afghanistan/Pakistan vets). What will happen when we have our own “Jasmine Revolution?” Who will control the “rioting?” “Heroes,” of course, initiated by some unseasoned 19-year-old “patriot” willing to die for his country. The medals and privileges will flow and bayonets will eviscerate the starry-eyed “liberals” while the obsessed “conservatives” will be raided, their guns pried from their cold, dead hands.

The masses, huddled in their bathrooms, will die of thirst, hunger, and “loss of essential services.” The “survivalists” will kill each other for the last MRE, and the potentates will be left with a handful of wage (bread and water) slaves, who will be shot by the boss’ guard after said slave, back against the wall, has cut said boss’ throat with a sharpened toothbrush or bitten off his blood-filled organ, finally tired of being raped. The guard, lobotomized will wander the gilded halls alone. (Fade to Black.)

There is, of course, no “conspiracy.” It’s the natural course of things.

PS: Please advise the computer folks that the box into which we type our responses now shifts horizontally, obscuring the left-most character. Is that ironic, or what?


Don Bauder May 14, 2011 @ 9:53 p.m.

Response to Twister's 8:31 p.m. post, May 14: When it gets as bad as you describe, I think the potentates will be in the same boat -- or moat -- we are in. We will have long since stormed the Bastille and taken them captive. You spoke of Kent State. It happened when we were in Cleveland. The Cleveland Orchestra, then the nation's best, was headed by George Szell. It was a couple of days after Kent State. Szell, the autocrat, who was imperious and seemingly emotionless, asked for a moment of silence. We all knew that Kent State would prove to be a watershed in American history. Best, Don Bauder


Twister May 15, 2011 @ 2:53 p.m.

But don't forget the WW1 vets and McArthur.


Don Bauder May 15, 2011 @ 6:18 p.m.

That incident stained the general's reputation. Actually, as I understand it, FDR didn't particularly like MacArthur, who had retired from the Army before WWII started. (I think.) However, FDR knew he needed MacArthur. (Later, Truman didn't think so.) Best, Don Bauder


Twister May 15, 2011 @ 8:21 p.m.

I remember MacArthur as a vaingloroious puffball. One of the stories was that during evaucation, he had several guys left on the beach to (die) make room for his wife's furniture. I don't know whether true or not, but the WW2 GI's preferred Patton to MacArthur, and they weren't fond of Patton, another egocentric narcissist. But I suppose the real question is, did he/they prevent more loss of life and treasure than he caused, compared to the alternatives.


Visduh May 15, 2011 @ 9:22 p.m.

Wow, have there been some mixed metaphors in these postings. Referring to MacArthur's rousting (not killing) the WWI veteran Bonus Marchers in DC on the same breath as Kent State and the treatment of veterans of the current conflicts is a real stretch. MacArthur was under some sort of orders--exactly what they were is still unclear--to restore order to the capital. Why he chose to handle it so roughly is the real question, and why he turned on his WWI brethren-in-arms is a big blot on his career. Was he vainglorious? That's all in the mind of the viewer, but he never was anything like an ordinary guy. Many people accused him of appalling conduct, but nothing was ever proved.

But mixing him into the mess at Kent State in 1970 reveals nothing. That was a totally avoidable tragedy. Nobody in a position of real authority ordered that shooting; if one had he would have been charged and convicted long ago. It was an inevitable result of lack of training of the National Guard troops called to duty and who, under stress of the situation--or what they thought was stress--lost their composure and shot down innocent bystanders, while trying to control a small riot.

I fail to see the link between those two incidents, one of which goes back almost 80 years, and the treatment of Afghanistan/Iraq/War on Terror veterans. It is becoming clear that the US is not properly caring for the current generation of veterans, just as it fell down on the job in previous conflicts. But as it neglected the needs of WWII veterans until many years afterwards, and then gave short shrift to the Korean War generation, and followed up by its disgraceful treatment of the Vietnam War vets, finally ignoring its Desert Storm (Gulf War I) vets until pressured by Congress and courts, it is repeating its malfeasance once again as we comment.

Put your effort into insuring that the VA is properly funded, properly staffed, properly rewarded, properly held accountable, and the results might surprise.

I'm not clear on how a blog about consumer inflation became something that is so far off-topic. But it is and we need to keep focused on the things that matter. Are we doing our best to keep consumer prices flat? And are we making sure that we have the proper level of military staffing in the current era of being the sole remaining superpower in the world. (That distinction can be a huge tool to promote democracy.)

Just where are we on these continua? I don't know, but I do know that we need to get it RIGHT this time. Wrong, or sorta' wrong just won't make it this time


Don Bauder May 16, 2011 @ 7:17 a.m.

Re Kent State, those National Guard troops should never been given live ammunition. I was in the National Guard; we were ill-trained. Probably many at Kent State hated college students. I agree with you that we owe returning veterans proper care. Some things going on now are disgraceful. Now to consumer inflation: one thing you could do is pray for things to worsen in Portugal, Ireland and Greece. This will put pressure on the euro. Thus, Bernanke could continue his irresponsible policy of hyping stocks by loaning money to banks at almost zero percent, thus sending the dollar down and commodities prices higher. A weak euro would delay the day of reckoning. Best, Don Bauder


Don Bauder May 16, 2011 @ 7 a.m.

MacArthur certainly had a huge ego. I remember film footage of him strutting after he had cleaned out the WWI veterans' camp. His detractors called him a megalo- or egomaniac. I suppose it takes that kind of confidence -- plus a great deal of politicking -- to become a general in the first place. Best, Don Bauder


Twister May 16, 2011 @ 10:57 p.m.

Digression can be a form of evasion--one of the standard tools of (political)"debate." But debate itself is child's play (for the vainglorious) compared to intellectual enquiry (either intra- inter-), which requires a suspension of judgment and a citation of the specific subject under consideration (e.g., citation of the statement to one is responding). Cherry-picking cases when responding to some statement of principle is itself a diversionary tactic.

True, digressions do develop from initial issues of intellectual enquiry, but the question is whether or not the digression was evasive or fundamentally relevant in some way to the original issue. In attempting to "return" to the original subject, one can simply do just that--return to the original subject.

But when one makes a claim that a discussion has drifted "off-topic," one can either do so because one feels uncomfortable with the digression or because the digression appears to be itself evasive. That is, one can "derail" the discussion that is considered "off-topic," by one person and taken up by others by attempting to intimidate those who have committed the sin of digression by trying to kill that outgrowth. This has become a common (and often successful) tactic by those who are, for one reason or another, offended by some statement or tone who don't want to be specific about the specific statement(s) to which they have taken offense.

The underlying principles under discussion can and should be illuminated by specific examples, and flaws in those examples should be corrected (preferably with appropriate references to primary sources). But flaws in specific examples used to illustrate principles or are taken from the text of the original issue do not necessarily invalidate the principle(s) under discussion itself/themselves.

But when one wishes to criticize something that has been said/written, additional evasions through general statements is not likely to dispatch the issue (unless intimidation is successful); respondents should be given something specific upon which to hang their hat.


Don Bauder May 17, 2011 @ 6:37 a.m.

When this blog veers off topic, I seldom try to steer it back. We get some of our most piquant comments when someone is wandering off the subject at hand. Usually, the discussion returns to the main theme. Best, Don Bauder


Founder May 17, 2011 @ 7:52 p.m.

Thank Goodness for digression... Like ice cream, without digression life is meaning less...

BTW: The (BAD nuclear) news blackout about the global pollution thanks to the Japanese reactor disaster is news worthy IMO...

Consider: Highly radioactive substances detected in Tokyo — Higher than what was found near Fukushima plant May 15th, 2011 at 01:11 PM

http://enenews.com/highly-radioactive-substances-detected-in-tokyo-... ...] highly radioactive substances were detected in parts of Tokyo.

Japan’s Asahi Shimbun reports about 3,200 and nearly 2-thousand becquerels of radioactive cesium per kilogram were found in the soil of Tokyo districts of Koto and Chiyoda, respectively, from testing conducted between April 10th and the 20th.

This amount is higher than what was found in the prefectures near the Fukushima plant and experts warn that other areas may be subject to radiation contamination as clusters of clouds containing radioactive material remain in the atmosphere. [...


Visduh May 17, 2011 @ 9:04 p.m.

Many of the more interesting and intellectual sets of exchange to blogs have come when the subject wandered widely. Don, I think you called it being discursive. But as I look at the "Post a comment" rules of the Reader, I read the sentence: "Any off-topic comments stand a change of being removed." That rarely happens at the Reader.


Don Bauder May 17, 2011 @ 9:53 p.m.

I have no authority to remove any blog items, although I can suggest a deletion to the monitors. If I had such authority, I wouldn't remove discursive posts if they are cerebrally stimulating, or just plain funny. Best, Don Bauder


Don Bauder May 17, 2011 @ 9:51 p.m.

Response to Founder, 7:52 p.m. May 17: I've been in the media nearly 50 years and it always puzzles me when extremely important stories, such as the one you cite, drop out sight and are not covered. The Japanese disaster should be providing news for another year, but it's being ignored. Best, Don Bauder


Founder May 18, 2011 @ 7:20 a.m.

I think it is more that puzzling, I think it is yet another indication that our lives are being "managed" by the Ultra Wealthy as they have never been before! Inflation, housing, credit, even access to news are now being "controlled" by Congress/Big Banks/Wall Street and most citizens are left to fend for themselves.

During the Sixties, it was "Power to the People, Right Now", now in the "Teens", it is "More Power to the Ultra Wealthy, Right Now" but the rich are the only ones singing...

The longer inflation stays very low the firmer the grip that the Ultra Wealthy have on both our Economy and everyones lives in America!


tomjohnston May 18, 2011 @ 9:28 a.m.

Founder, actually, John Lennon didn't write Power to the People until 1971.


Twister May 23, 2011 @ 1:24 a.m.

Vis, here's the Wikipedia entry for the Bonus March; please point out any errors. http://en.wikipedia.org/wiki/Bonus_Army

There's a book on it, but I've forgotten the title. MacArthur and the rest were "just following orders." Burning and brutality?


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