Wal Mart CEO: "Shoppers Are Running Out Of Money"; There Is "No Sign Of A Recovery"

About a month ago we wrote a post about Walmart's CEO warning American's to prepare for serious inflation.  You can see that post here.

Walmart's CEO Bill Simon said at the time that:

• "every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along. Except for fuel costs, U.S. consumers haven't seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory."

Well almost a month later, Simon is making news again on the inflation front and it comes a day after US Federal Reserve Chairman Ben Bernanke insisted that "the economic recovery was proceeding at a moderate pace, with little risk an inflationary psychology would take hold."

In an interview with USA Today, Simon says that consumers face "serious" inflation in the months ahead for clothing, food and other products and that "we're seeing cost increases starting to come through at a pretty rapid rate.".

John Long, a retail strategist, notes that labor costs in China and fuel costs for transportation are weighing heavily on retailers. He predicts prices will start increasing at all retailers in June.

"Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along," Long says. "Except for fuel costs, U.S. consumers haven't seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory."

In another article, on CNN Money, Walmart noted that the store's core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried.

• "We're seeing core consumers under a lot of pressure. There's no doubt that rising fuel prices are having an impact.  Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in. Lately, they're running out of money at a faster clip. Purchases are really dropping off by the end of the month even more than last year. This end-of-month [purchases] cycle is growing to be a concern."

To that end, Walmart says they are not seeing any signs of a recovery yet.

(Note: I hope to have the COMEX post I refered to yesterday for you later tonight)

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Wal-Mart US CEO To America: "Prepare For Serious Inflation"

Faithful readers know that beginning last September I started harping on cost push inflation. At the time I said,

• [It's] inflation that isn't (because government doesn't count it anymore).

  The quantitative easing and stimulus money are working their way into the commodity sector which is allowing the dogs of inflation to slip their leashes and work their havoc.
  

  Take a look at the way food prices are being driven to unseemly high levels once again just as they were in 2008.
  

  Corn is coming up on $5.00, wheat is more than $7.00, soybeans are over $10, sugar is over $0.24/pound, cotton is closing in on $1.00, coffee is up near $2.00 pound wholesale (which is a 13 year high), cattle are just shy of $1.00/pound, bellies are trading over $1.50/pound for fresh product.
  

  What does it all mean?
  

  It means the consumer is on the verge of watching his disposal income be decimated by high food prices.
  

  In Canada this comes at a time when most Canadians are living paycheque to paycheque and are saddled with the highest levels of household/mortgage debt ever. Disposable income is at an all time low. In the USA, a record number of Americans are on food stamps and are either unemployed or underemployed.
  

  The only saving grace is that energy prices have not YET begun moving up alongside the rest of the commodity complex. But it's only a matter of time. When the crude complex gets involved you will see home heating bills, home cooling bills, industrial energy costs and gasoline prices join the list of soaring costs nationwide.

Well 7 months down the road and we see that the CEO of Walmart has this warning Americans that U.S. consumers face "serious" inflation in the months ahead for clothing, food and other products.

Walmart says that "every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along. Except for fuel costs, U.S. consumers haven't seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory."

Read that again... inflation will be unprecedented in recent memory.

But since governments in both American and Canada changed the way they calculate inflation starting in 2000, 'official' statistics will claim there is no inflation. Which means that as workers try to negotiate wage increases to offset the ravaging effects of higher costs in just about everything important, they will be denied as employers hide behind the government sham that is the Consumer Price Index.

You may have already noticed the rising cost of things on your pocketbook. But the reality is that you haven't seen anything yet.

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Email: village_whisperer@live.ca

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Please read disclaimer at bottom of blog.