Inflation

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I am not an economist and my math skills are horrible. But I am going to go ahead and predict that we are about to see inflaton jump. This prediction is based on what I see happening at work, and It is happening in a very dramatic fashion. I work for a manufacturer. We make construction equipment, we make stuff for the petrochemical industry, we have a little biotechnology going and we've got pet products. So, my employer has a pretty broad manufacturing base.

All of our costs have increased. Raw chemicals are up at least 20%, sometimes 40% over last year at this time. Steel has jumped, particularly stainless steel. Carboard prices are up. The most dramatic price increases have come from plastics. 16oz bottles have increased in price by 1/3. We have absorbed most of these cost increases without increasing our customer's prices because our competitors have not increased their prices - until now.

We are now hearing and seeing that our competitors have started to increase prices and they are not being shy about it either. My company will now follow suit. The little Wal-Mart Smiley Face Price Cutter is about to be laid off.

If you have any major purchases you want to make, now would be a good time because if history is any indicator, we will see interest rates and prices start to jump soon. I am still lusting for an iMac G5 but I don't know if that will even be possible if I see my daily living expenses increase by 10% or more before I even have a third mouth to feed. Thank the Goddess that we have been making our credit debt a priority.

The Prius is turning into a bit of a godsend as well. Here's why: last year we averaged about $340/month in car repairs. Now, that usually meant that we'd go two months without any, then have to pour $1,000 at a time into a car. The Prius' monthly is only slightly higher than that. Looking at the money spent on fuel in December of 2003, we were spent $107.55 on gas that month.

For December of 2004, with the Prius, we spent $78.36. That is a savings of about $30.

So, in essence, we have gotten a new car for an extra $5/month. Of course, this is based on fuel data for one month, but I know mpg will only increase as we move into warmer weather. It does not factor in repairs on the Saturn, but since it is being driven one third of the miles per month that it used to be driven, I expect maintenance costs on that car to drop.

Anyway, I have to go to work to pay for all this speculation. Blessings.