Inflation Watch:

Reader Tyson R. notes: While shopping with my wife, I picked up a bag of corn chips for the girls and didn’t notice a big difference in price, $3.99. That has always been the price as long as I can remember. The bag was the same color, about the same size as before and assumed it was the typical 16 ounce bag, to my dismay when I looked at the content weight it was only 10 ounces. Inflation doesn’t always come in the price tag but in the shrinking of the volume you get. Calculating the inflation on corn chips by reducing the volume by 37.5% equates to the old 16 ounce bag costing of $6.24!

How Droughts & Floods Will Hit Food and Clothing Prices.

R.W. wrote me to quip: If there’s no inflation, then why is the Motel 6 now $76 per night (here in California), and why do they now have a digital sign out front, to advertise the room price?

B.B. sent this dire inflation prediction: Western Economies Face Hyperinflation: Gold Bull.

T.T. in Texas wrote: Previous oil market movements usually translate quickly to movements in fuel prices. I had noticed over the years that lubricant prices stayed steady. Maybe this was because of the steady demand and they are taken from the “heavier” end of the distillation process, although much of the heavy end is now cracked into fuels. (This is what ran up diesel prices many years ago. Diesel was almost a “surplus” product. However in the last two years time the 5-40 synthetic Rotella [motor oil] that I use in all our engines; turbo-diesel, gasoline and natural gas has jumped from 13 to 19 dollars a gallon at the local Wal-Mart. The 2-1/2gallon tractor jugs of non-synthetic Rotella have gone from $20.50 to 28.00 in just the last year.

I believe it was Howard J. Ruff that hit upon the change in first class postage as a very good gauge of inflation.