Inflation, the cruelest tax of all, is here. Under the insane monetary agenda of this socialist administration, America and Americans are all going to feel the terrible affects of inflation. There is no other option as they, the Democrats, resort to previously failed policies and discard any attempt at being fiscally conservative or responsible. Hyper inflation is coming shortly to every store and household in America. Thanks Joe! NOT!
Manufacturers are all facing major dilemmas now. Raise prices or suffer the losses and increased overheads. Unfortunately most will have no other option than to raise prices, and once that route is selected, it will become continuous as inflation rises. I spoke recently to an Israeli who has a tea import/export business. He used to pay only 6 months ago, $1800 per container shipped from China to the US. He now pays $8300 for the same container load and his company is losing money daily. He has large contracts with fixed pricing with companies like CVS and May have to break contracts as the losses mount. That, America, is inflation.
A little later in this blog I am going to give some more examples of companies that produce everyday products we all buy and consume which have already increased in pricing and they intend to continue that process as inflation increases.
The surging cost increases that are a direct result of the Democrats policies have increased fuel costs, raw materials, energy and transportation. These increases in many cases are in double figures. Sometimes triple figures.
18 of 26 S&P500 companies have already acknowledged increases in their products. The other 8 will follow shortly. Treasury Secretary Janet Yellen said Wednesday the WH will raise its inflation forecast for the year in its forthcoming midyear economic projections amid growing concerns about surging consumer prices. That shows they understand their policies will hurt all Americans but they do not care. They use a figure excluding food and energy data to try say inflation in May alone was 3.8% as opposed to well over 5% which I think is also understated and low.
The following companies have, as I said already, committed themselves to continuous price increases.
Clorox has committed to increases from July. In the words of the Company CEO Linda Rendle:- “Given the volatility and the increases we’re seeing in the resin market, we’re looking at taking additional pricing in Glad based on what we’ve seen.”
Constellation Brands, the beer and wine producer, have increased prices 2% and further increases will follow, possibly monthly, as their raw product and material prices soar.
General Mills financial officers stated that increases will continue as global, broad based inflation increases. You all eat cereal? Maybe have to cut back on that!
Coca Cola is having to increase prices, and those increases appear to be large and the company is expecting headwinds from consumers as the financial year 2021 and 2022 proceeds. They expect to keep their increases coming monthly in line with inflation.
Kimberley-Clark stated in April they had no option but to increase prices on all their products, the best known being Scott toilet paper and Huggies diapers. They raised them all from high single digits to double figure increases. These will continue as inflation grows.
Kraft Heinz has stated that they haven’t increased prices yet but are examining everything. Remember America, these corporations, regardless of size, will only absorb a certain amount of losses before shareholders object. Up to now they have mitigated those extra costs by reducing their own costs with efficiencies in staffing levels etc.
Kellogg’s, the other major cereal producer of fame, state they have examined many levers to deal with inflation with price increases and what they call “price park architecture.” This is putting smaller amounts of product into the same size or similar box to make you feel it’s not too expensive. A con job. To me that is wrong. It shows immorality in that company but they are not alone in that fraudulent application.
Tyson, the US second largest producer of chicken, pork and beef product, have already increased their prices as animal feed and other basic materials have increased exponentially. They have seen substantial increases from their entire supply chain and have had no option other than to raise pricing.
When you add the ever increasing cost of fuel, wages, energy costs and staff shortages into this bleak picture, we are in for a rocky road. Wages will not keep up with inflation and our standard of living will go down dramatically. Jobs will be lost as companies try to stop losses or slow them down. Luxuries will not be bought. Unhealthy foods will be bought as they are far cheaper when feeding a family. Vacations will be cancelled. There will be Trades Union actions against companies that will not be able to afford increases in salaries and benefits as their bottom line contracts.
I have seen this play out in countries I have lived in or visited. It is not a pretty picture. It is very destructive to any society and a great leveler of financial groups from middle class down.
A recent Axios/Momentive survey showed that the majority of young people (18 to 35) are willing to get rid of capitalism and move to socialism. These younger folk are led mainly by African Americans and women. In pre Covid days the same group were asked about socialism and capitalism and just 39% held a positive view on socialism. Now that figure has gone up over 50%.
I wonder if they still will as socialism plays out and they begin to suffer!
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