Off-Topic: The Two “Gs” Of Inflation
By Adam Pick on June 18, 2008
I know I typically write about all things related to heart valve replacement and heart valve repair.
However, I can’t get over what’s happening to my wallet… It’s shrinking right before my very eyes.
There’s obviously no need for me to rant-and-rave about the first G of inflation… GAS! We hear about it. We read about it. It’s all over the news. And, every time we fill up our cars, SUVs and trucks, that little voice in the back of our brain screams aloud, “OH MY GAWD!”, as the price goes up-and-up-and up. In fact, with gas prices up 20% since last June, my local gas station cuts me off when I reach $75 at the pump. A trip to Costco doesn’t make it any easier. Lines for cheaper gas are always nine-to-ten cars deep.
As for the second “G of Inflation” it is, without a doubt, GROCERIES! Two weeks ago, Robyn (my wife) and I went to our local Vons supermarket here in Redondo Beach, California. Our weekly grocery bill has hovered around $107 for the past six months. We were quite surprised when the digital display bleeped “TOTAL = $160.23”.
I did a “Huh?”, then a “No Way!” and finally another “OH MY GAWD!!!”
I was just reading the latest edition of Money Magazine. There is an interesting article titled “Surviving Inflation” that you may want to review. Here are some interesting facts about surging food prices during the last year:
- Ice cream is up 6%
- Hot dogs are up 7%
- Hot dog buns are up 15%
- Ham is up 7%
- Eggs are up 30%
- Milk is up 14%
- Beer is up less than 4%
The worst thing about that list… Robyn has eggs everyday for breakfast and I make egg salad every Sunday. We both like protein snacks. Unfortunately, we use 36 eggs each week. Rats!
As a result of inflation, I’ve become an avid fan of coupons. I’m not alone. My buddy, Rob, and I often compare coupon usage throughout the week. Last week, I saved $27 during our return trip to the supermarket. Rob saved a bunch-of-money on baby formula for Sammy, his new baby boy.
Still, the Bureau of Labor Statistics suggests that the recent 3.9% increase in the consumer price index (CPI) is nothing to be concerned about. As the report suggests, “It’s high but not panic-inducing.”
I don’t know about that… I’m hearing many “panic-like” conversations among my friends and family. What about you?
Keep on tickin!
jerry says on June 19th, 2008 at 1:19 am
There are several economists blogs that I follow. Several of them, with nice tenured positions, assure me that since the car I buy today is so much higher in quality than the one I bought last year that the stated inflation rate is overstated(*). And that since iPhones have come down in price, that also shows that inflation is overstated and not really an impact on our lives.
So armed with this new understanding of inflation, I am not worried at all about the $90 gas tank and the $100 two bags of groceries.
(*) I haven’t actually bought a car since 2005, and even then that was a three year old car (because buying 3 year old used cars from new car dealers is a much better idea than buying new cars from new car dealers.)
Adam Pick says on June 19th, 2008 at 9:05 am
Great, great, great counterpoint Jerry…
Being in the electronics industry, I’m pretty familiar with the ongoing pricing declines among wireless devices, computers and other consumer products.
However, Robyn and I believe a “good defense is a great offense” against inflation. Last night we chatted about our biggest, most frequent expenses. Considering Robyn drives 50 miles a day in her SUV that gets 17 MPG, the math makes it very clear that payback for a hybrid will be quick. That said, we are thinking about selling her SUV and getting a hybrid (Toyota Prius).
FYI, we’re like you… We have yet to purchase a new car. We target cars that are three years old and have already experienced a good chunk of depreciation. Autotrader.com is a great place to find those types of used cars.
Keep on tickin!
Kathy Mccain says on June 19th, 2008 at 3:15 pm
It is AWFUL!!
My husband commutes to the Houston area everyday. Currently he is spending appox. $500 ( possibly more ) on gas per mos. Groceries are terribly high. Utilities- forget it ! Thank goodness we only have one child left at home. Our 18yr old son! I feel guilty at times complaining, because we are doing better than alot of people, and I am very thankful for what we do have. I am, however, starting to believe that all of this is not really necessary. It is my personal belief that WE MUST STOP BEING DEPENDENT ON FOREIGN OIL. As far as I can tell, we are not going to come up with an alternative for gasoline, anytime in the too near future, so it would be logical to start drilling in this country, and building a couple of refineries. Also nuclear power is another option. I AM an environmentalist, BUT we have to be practical, and LOGICAL ! With the current technology, IT IS POSSIBLE TO DO THIS WITHOUT HARMING THE ENVIRONMENT!
Well those are just some of my thoughts, but I’m know politician, so what do I know. (Ha!)
Keep looking toward tomorrow!