We’ve talked about the terribly destructive effects of inflation before, but the National Inflation Association recently released a report chronicling what they expect to be prices for common items by the end of the decade. If ever there was a time to get your investments into assets which mitigate against the effects of the dollar’s devaluation, this is it.
While the following estimates are obviously not definitive, this think tank came up with projections that, if accurate, ought to make all our pulses speed up a bit – and then pause to consider that we should never again cast a vote for a politician who believes the economic problems faced in America today can be solved by printing more money.
Here’s what the NIA expects to find on grocery store shelves in the near future:
- $11.43 for an ear of corn
- $23.05 for a loaf of bread
- $62.21 for a 32 oz. package of sugar
- $45.71 for a 64 oz. container of of orange juice
- $15.50 for a Hershey’s chocolate bar
As a piece of bonus inflation, the NIA expects a plain, white, men’s cotton t-shirt to sell at Wal-Mart for $55.57. Prices on the commodity markets have been rising for a few months now but, so far, grocery stores have been loathe to pass the increase on to consumers. Rest assured, food retailers will not absorb higher prices forever. Expect to see a creep upwards during 2011, which might turn into an all out surge before it’s said and done. In the months of September and October, the wholesale price of cotton has increased in price by 54%, corn 29%, soybeans 22%, orange juice 17%, and sugar by 51%. The consumer cannot expect to remain unaffected by this trend.
Ultimately, the NIA goes on to point out that food inflation is set to replace the mortgage crisis as the number one issue for Americans. If you can’t afford to put food on the table, keeping up with a house payment becomes small potatoes indeed. If the majority of your portfolio is still tied up in inflation sensitive assets like stock and bonds, today might be a good time to explore the possibility of purchasing income producing property. When financed correctly, this type of real estate investment can actually serve as a shield against inflation.
The AIPIS Team
Flickr / JoeInSouthernCA