While the cost of electronics may be dropping, consumer goods such as food and fuel which make up 40% of the average household budget have risen by 8%:
Forget the modest 3.1 percent rise in the Consumer Price Index, the government's widely used measure of inflation. Everyday prices are up some 8 percent over the past year, according to the American Institute for Economic Research.
The not-for-profit research group measures inflation without looking at the big, one-time purchases that can skew the numbers. That means they don't look at the price of houses, furniture, appliances, cars, or computers. Instead, AIER focuses on Americans' typical daily purchases, such as food, gasoline, child care, prescription drugs, phone and television service, and other household products. […]
Over the past year, the EPI is up just over 8 percent, according to the economics group. The biggest factor: Motor fuel and transportation costs are up 21.06 percent from year-ago levels. The cost of food, prescription drugs, and tobacco also have increased faster than the government's inflation measure, rising 3.56 percent, 4.21 percent, and 3.4 percent, respectively.
MIT's Billion Prices Project shows inflation rate exceeds CPI
One reason for the increase in consumer prices is that on average more than one trillion dollars per year has been added to the global money supply over the last five years:
The mixed assets of the 4 central banking institutions will top $9 trillion by the end of March, compared to $3.5 trillion 5 years back, Deutsche Bank says. The European Central Bank’s three trillion ( $3.93 trillion ) balance sheet is the most important relative to the economy, at 32% of nominal euro-zone GDP, followed by the Bank of Japan with thirty percent, the UK Central Bank with 21% and the Fed Reserve with 19%. The BOE’s balance sheet has expanded quickest in the emergency, more than tripling to £321 bln ($504.6 bln). [...]
The ECB has concentrated on loans to banks. From 450 bln of usually one-week loans in Jan 2007, its exposure has risen to 1.1 trillion of usually three-year loans. So although it has acquired 284 bill of government and covered bonds, the maturity of its assets is weighted towards shorter-maturity bank loans.
But the ECB is taking higher credit risk than the BOE or Fed thanks to the loan collateral it is accepting, even after big haircuts.
The BOJ is both offering loans and purchasing Japanese govt. bonds and other assets under its latest sixty five trillion ($803.5 bill) program but has centered purchases on 2 year bonds so far.
The cheap funds created by the money masters makes it easy for traders to speculate on commodities:
U.S. demand for oil and refined products – including gasoline – is down sharply from last year, so much that the United States has actually become a net exporter of gasoline, unable to consume all that it makes.
Yet oil and gasoline prices are surging.
On Tuesday, oil rose past $106 a barrel and gasoline averaged $3.57 a gallon – thanks again in no small part to rampant financial speculation on top of fears of supply disruptions.
Loose cash tends to concentrate in sectors where suppliers collude to inflate prices. Big PhRMA is currently working on the Trans-Pacific Partnership, a deal that would extend its quasi-monopoly across the globe:
Add up Daley’s power and experience, and experts who follow public health policy suspect his influence in the U.S. stance in negotiations over a major international trade deal -- a stance with hugely profitable implications for giant American drugmakers.
The United States is in talks with eight other Pacific nations to establish the Trans-Pacific Partnership, which the administration hopes will serve as a template for other trade pacts. According to leaked documents from the negotiations, the Obama administration is using the deal to push hard-line intellectual property standards that could drive up medicine prices overseas, boosting the bottom line for U.S. drugmakers like Abbott Labs at the expense of public health.