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Wednesday, November 02, 2005

Scott Burns predicts a recession

And I believe him. Together with the imminent collapse of the housing bubble, we're going to see some tough times:

... Skeptics should consider this brief list:

•The rising cost of gasoline. With the typical household consuming about 1,000 gallons a year, an increase from $1.50 a gallon to $3 meant a purchasing-power loss of $1,500.

•Rate increases for electricity and natural gas.

•Rising medical co-pays and other out-of-pocket expenses for health care, plus rising employee health insurance premium costs. Premium costs were up 10 percent in 2004 alone.

Another way to see the same thing is to examine wage gains.

In 2004, the average weekly earnings of private nonagricultural workers rose only 2.2 percent. The consumer price index rose 3.3 percent over the same period.


Scarlet said...

Have you read this article?


It's about why high fuel prices haven't impacted restaurant and food prices yet. When it does, it'll be scary.

Sorry I haven't had a chance to listen to the Margaret Atwood interview yet. This weekend I think I'll have time.

Piaw Na said...

No I haven't seen this article. The cost of raw materials don't figure very much into restaurant pricing, which are largely priced on the rent and salaries of the staff.

Food prices, however, will definitely go up eventually. The latest inflation numbers look scary (4.7% so far this year!).

Incidentally, I Bonds are paying 6.73% right now, an incredibly good deal, and one I urge you to look into, if you haven't already.