by Michael Snyder, The Economic Collapse Blog:
Inflation is a hidden tax on all of us. Unfortunately, most Americans don’t understand this. Most of them cheered when the federal government was handing out free checks as if they were candy. And most Americans fully approved of the Federal Reserve propping up our financial markets by flooding the system with obscene amounts of money. But now we are paying the price. Our money doesn’t go nearly as far as it once did, and the cost of living has become extremely oppressive.
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When I heard that one woman had financed a 1998 Ford Escort for $289 a month for 84 months, I initially thought that there must be some mistake.
I knew that used car prices had risen to insane levels, but I never expected to see something like this…
During tax season, people are often using their returns to buy outrageous things. Normally, people will buy an older model of luxury car, which they usually end up taking a loss on. Other times, people price themselves out by buying a new car that is out of their normal budget. However, there is a woman who has gone viral from Facebook for buying a 1998 Ford Escort under a horrible deal. Not only is she paying over $200 a month for the car, she is paying on it for the next seven years.
Obviously, someone really took advantage of this woman, because a 1998 Ford Escort is not worth much.
But this is the day and age that we are living in. 25 year old Ford Escorts are considered to be valuable assets, and financing of used vehicles is often stretched over 7 years so that poor Americans can afford to make the payments…
While she is spending less than $300 a month for her car, the car is already twenty-five years old. This lady has gone viral, because of the promo post, where she is making $289 monthly payments for the next 84 months, which is seven years.
The gap between the wealthy and the poor in the U.S. has never been larger than it is right now.
In fact, an entire industry has developed that literally sucks the blood out of poor people so that it can be given to rich people…
It consists of a network of hundreds of plasma extraction centers, deliberately built in economically disadvantaged neighborhoods, towns, and cities. Places like Flint, Michigan, and Rexburg, Idaho, and El Paso, Texas. Places where companies know people need money and might do something a little unpleasant to get it. The centers prey on the precarity of people who live in these places, often ignored by the wider public, and a little bit too dark to dive deep under the surface. They use an American mixture of cheery customer service and ever-changing payment schemes that can make plasma sellers feel like they are the ones gaming the system, when reality is the other way around. They draw in more people of color because they are often built in the places where most people aren’t white. It is an industry that takes advantage of baked-in American economic and racial inequities.
When the cost of living rises, it hits those at the bottom of the economic food chain the hardest.
The Federal Reserve has been aggressively hiking interest rates in a desperate attempt to get inflation under control, but it is not working…
The Fed pays particular attention to the Personal Consumption Expenditures (PCE) price index. The “Core PCE” price index (which excludes the volatile food and energy components) is its measuring stick for the 2% inflation target. Powell has been pointing at the services components of the PCE price index as a hotbed of inflation. And the PCE price index for January, released today by the Bureau of Economic Analysis, was a horror show on all counts.
Not only did all the relevant measures get a lot worse in January, but the prior three months, October through December, were revised higher – much like the CPI inflation readings a couple of weeks ago – showing substantially greater inflation momentum at the end of the year than originally shown. The whole thing throws a lot of cold water on the “disinflation” hoopla.
In particular, food inflation has gotten wildly out of control.
At this point, even Costco is charging ridiculous prices…
On Sunday, a Reddit post showcasing the new roast beef sandwich at a Costco location in Lynnwood, Washington, went viral because of the sandwich’s eye-popping asking price.
Costco wants customers to pay $9.99 for sliced roast beef with onion, relish, mayo/mustard blend, lettuce, roasted cherry tomatoes and red onions on a ciabatta roll.
While the 790-calorie sandwich looks good, Reddit users were astounded by the price tag — which is equivalent to a whole Costco pizza.
“10 dollars? Is it the same size as the pizza?” one user commented.
No matter how high the Fed hikes interest rates, food prices are going to continue to go up.
But higher rates are having an impact on employment. In fact, today another prominent tech company announced that it will be conducting layoffs…
Palantir confirmed on Monday that it’s cutting about 2% of its workforce as layoffs continue to hammer the tech industry.
“We believe our company is at an inflection point and to continue to evolve, we are making the tough choice of reducing teams in several areas,” the company said in an emailed statement. “While less than 2% of our workforce is impacted by these changes, these are incredibly painful decisions but the right ones for the company’s future.”
There is no more debate.
The economy is clearly getting worse.
In fact, a brand new Fox News poll discovered that 78 percent of all Americans believe that “the economy is in only fair or poor condition”…
Fully 78% say the economy is in only fair or poor condition, mostly unchanged for the last year.
That’s how the economy remains the top issue, with 36% saying it’s the most important problem facing the country — and it’s the number one choice among Democrats, Republicans, and independents.
But what most people don’t understand is that this is just the very beginning of this new crisis.
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