My Inflation Watch

In preparing my third quarter estimated taxes over the weekend, I made the mistake of looking over our spending patterns and household budget. As many of you could probably confirm with your budgets, we seem to be paying quite a bit more this year for two main things: travel & food. Quite a lot more.

In fact, what was our usual $100 per week in grocery bills is now averaging around $140 (a +40% year-over-year increase). I guess I shouldn't be surprised with the Fed more than willing to print money to throw at the economy. I suspect that in a couple of years these prices will seem really cheap in comparison to the amount we'll have to spend for the same items.

Clearly those who think inflation is dead must not be spending money the way we do. For now, I'll lump this behavior in the same category with those who previously thought that "you can't lose money in the housing market" and "all tech stocks will grow over 100% per year forever."

Yes, Bernanke is flooding the market with liquidity, but there is no free lunch. Enjoy it while it lasts.