Hidden Inflation...

This January article points to something I've been saying for quite some time now.

A recent Consumer Reports investigation found that the amount of dish detergent, toilet tissue, and first aid spray in those same old containers has shrunk as much as 20%...

Blame it on the rising costs of producing these goods, such as raw materials, energy, and facility costs, say manufacturers. As their expenses rise, they've got to find ways to make up the difference: Either charge more for the product, or give less of it to you for the same money.

The latter strategy -- charging the same amount for less-generous servings -- is the safer bet: Studies show that shoppers are more sensitive to price increases than product volume decreases. And manufacturers go to great lengths to get you to overlook the downsized items in your shopping cart.

I'm sure you've noticed in recent years that a half-gallon of ice cream is now 1.5 quarts. Orange Juice is in 59 ounce cartons instead of half-gallon ones. Cheese-its are in 13 oz boxes instead of 1 lb. Coffee is sold in 13 oz cans instead of 1 lb cans. The list goes on and on and on.

And now food commodities are going through the roof (via Daily Eudemon):

“Corn spot up 7.76%, wheat up 5.63%, Rice up 10.08%, Hogs up 10.16%, Sugar up 5.64%, Orange Juice up 3.33%, and cotton…. up 17.08%. That’s in one month!”

Here's what's also interesting about commodities and pricing (from Daily Eudemon, again):

So what are the TBTFs doing with they money that they’re getting from the Fed? They’re buying stocks, bonds, and commodities (known as “prop trading“). As a result, the prices of everything are going up (see Friday’s TDE post). It makes Bernanke happy, because the stock market is up, and when the market goes up, Americans stop thinking about economic issues. In the words of Albert Jay Nock, “A falling stock market seems to clarify and stimulate thought. When it is rising, nobody cares to know why or how, but when it falls, everyone is very eager to know all about it.”

Unfortunately, commodity prices are increasing the fastest, and the people who are hurt worst by increasing food prices are the poor. Especially the poor in developing countries. As the price of food in these countries increases, so does the discontent. As discontent increases, the chances of rioting breaks out.

Yet another reason many intelligent people think Bernanke must be insane or evil or both.

The World Bank is very concerned about food prices being at dangerous levels:

Global food prices have hit "dangerous levels" that could contribute to political instability, push millions of people into poverty and raise the cost of groceries, according to a new report from the World Bank.

The bank released a report Tuesday that said global food prices have jumped 29 percent in the past year, and are just 3 percent below the all-time peak hit in 2008. Bank President Robert Zoellick said the rising prices have hit people hardest in the developing world because they spend as much as half their income on food.

Clothing prices to go up 10% in the Spring:

Cotton has more than doubled in price over the past year, hitting all-time highs. The price of other synthetic fabrics has jumped roughly 50 percent as demand for alternatives and blends has risen.

Clothing prices are expected to rise about 10 percent in coming months, with the biggest increases coming in the second half of the year, said Burt Flickinger III president of Strategic Resource Group.

Inflation? Or stagflation? Ace knows what's going on, too.