Look How Much Less Americans Can Afford Now Compared To Six Years Ago - Business Insider
In oil markets guru Stephen Schork’s latest report, he takes issue
with the Federal Reserve’s recent argument that inflation is going to
remain subdued.
It is true that core inflation — all prices excluding food and energy — has not spiked.
But the “wealth effect” that Chairman Ben Bernanke is hoping to
create by causing the value of assets like stocks to rise will be
outweighed by everyone panicking about their grocery and electricity
bills going up.
……in 2006 (Bernanke’s first year at the helm of the Fed) the average
weekly earnings (pre-tax) of a worker in the U.S. could purchase 332
loafs of bread, 265 cartons of eggs, 109 gallons of milk, 141 gallons of
gasoline and 3,170 KWhs of electricity.
Since then, the cost of these staples has soared, while incomes have
barely moved and the value of our homes has declined by one-fifth.
Six years later and average weekly incomes can only buy 250 loafs of bread (-25%), 187 cartons of eggs (-30%), 101 gallons of milk (-7%), 94 gallons of gasoline (-34%) and 2,644 KWhs of electricity (-17%).
Yet based on the Fed’s announcement last week of QE3, clearly what we need is more inflation…
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