The Shadow
Recent polling shows that the number one concern of Americans today is soaring prices they must pay at the grocery store and at the gas pump.
Statistics from the U.S. Bureau of Labor’s consumer price index reveal that the inflation rate for 2020 was 1.23 percent and that in 2021, on average, consumers had to pay 4.70 percent more for the same item in 2021.
John Williams, President of the Federal Reserve Bank of New York, recently said that the Federal Reserve would most likely have to raise interest rates in March to help curb inflation.
The U.S. inflation rate stood at 3.2 percent in 2011, and by the end of 2021, inflation had risen to the 4.70 percent.
The increase in inflation shot up to 7.0 percent in Dec. of 2021, and it rose even higher in Jan. of 2022, to 7.5 percent.
President Joe Biden in 2021 evaluated the inflation situation in 2021 and labeled it as “transitory.”
However, prices continued to soar at the pump and throughout America’s grocery stores.
For example, one gallon of gasoline at Farm & Fuel in Covington one year ago sold for $2.43 per gallon compared to $3.69 per gallon currently, and Black Label bacon at Kroger in Clifton Forge sold for $3.99 a year ago compared to $7.49 today.
The increased inflation has robbed workers of their pay raises that averaged 5.5 percent in 2021, and from 2021-2022, the 7.48 percent inflation rate continues to wipe out pay raises across the nation.
Higher gas prices mean higher prices for goods that must be trucked from farms and factories to sales outlets across the nation, and the skyrocketing price of gas forces the truck drivers to increase their cost for deliveries.
Also, the bottleneck delivery system that has left as many as 100 ships off the coast of Los Angeles waiting to unload their shipping containers has resulted in inflation as well.
For example, the global supply chain from China that has resulted in a shortage of consumer goods and machines has risen from the pre-pandemic cost of $1,525 to ship one 40’ shipping container from Shanghai to Los Angeles to $3,000, and contracts for shipping products increased by 14 percent in 2021.
The acceleration of shipping cost rates, delivery delays and falling inventories have pushed up inflation data, weighing negatively on the bond market to provide an incentive to the Federal Reserve to increase its rates.
The 8.3 percent increase in inflation rate since the COVID-19 negatively impacted the U.S. in March of 2020 has investors in the stock market on edge, and with rumors of war between Russia and Ukraine, the stock market has been on the downturn recently.
Today, in terms of the purchasing power of the U.S. dollar, the purchaser will have to spend $1.09 for the same item that cost $1.00 in 2020 if the same rate of inflation continues.
That also means that those who store their dollar bills away will find that each dollar saved will now purchase only 91 cents of what it would have purchased in 2020.
While Biden is now plagued with a multitude of problems at home, inflation that is proving not to be transitory as he predicted, a Southern Border problem that saw the number of illegal immigrants double in Jan. of 2022 compared to Jan. of 2021 and record-breaking crime rates in many American cities, he has now offered to meet with Russian President Latimer Putin to defuse the powder keg that consists of 140,000 Russian troops assembled in attack formation on Ukraine’s eastern border.
With the danger of war looming and with the prices of goods and services soaring, President Biden’s threat to cut off Nord Stream II, the pipeline that will deliver oil from Russia over 700 miles under the Baltic Sea to Germany, and the promise to levy heavy sanctions on Russia should Ukraine’s borders be crossed may be enough to dissuade Putin from launching an attack.
Whatever the case may be, inflation continues to hurt the middle class in America the most because those who are wealthy can better afford to pay higher costs for goods and services.
