Contrary to the official Fed line, inflation is now a real and serious factor in the US.
Some of the recent “canary in a coal mine” indicators are Whole Foods reporting lower sales due to their (wealthier) customers driving less because of high fuel prices.
Wal-Mart has already said that inflation is affecting their customers. According to CEO Mike Duke, “We’re seeing core consumers under a lot of pressure. There’s no doubt that rising fuel prices are having an impact.”
As an example of classic inflationary behavior, farmers moved “to beat the price hikes” by purchasing their fertilizer far in advance, OTR Global commentary revealed. This is indicative of a classic inflationary environment, not a normal business cycle.
Of course, this rising trend is also creating demand destruction… Full story