Your mind tells you one thing and your stomach tells you another.  You know better than to have that extra piece of apple pie but your stomach and taste buds say – go ahead, what’s it going to hurt, just one little piece of pie?  Or maybe it’s supersizing those French fries at the drive-thru window.  Or maybe it’s just one more piece of chocolate.  Before you know it, when you get on the scale, you’ve put on maybe five, ten even twenty pounds and you’re wondering where they came from.  Then starts the hard work of getting the pounds back off.  Well, inflation is something like that.  Tax revenues are down 16%, government spending is up 18% plus hundreds and hundreds of billions of dollars in stimulus money that really didn’t create long term jobs.  We can’t expect anything but inflation.  Currently, the consumer price index isn’t an indication that we are in an inflationary period.  As a nation, the current administration and congress just keeps adding to the national debt; and some legislation now before congress will only increase business and consumer costs.  There’s also the value of the American dollar being questioned on a global scale.  So just like putting on those unwanted pounds, inflation is just around the corner.  Start paying attention to all the goods and services you buy looking for those price increases to start popping up.  As a business person, if you are not paying attention to the anticipated price increases down the road, even if you are doing more business, you could still be losing money because you’re not paying attention to cost increases.

Some of you may be asking, why I feel inflation is coming when the statistics aren’t showing it yet.  The answer is simple:  Someone has to pay for all this government spending and it’s going to be you.  So either the politicians will have to raise taxes, cut spending (unheard of) or we will see inflation as they borrow money to repay debt at a high rate of interest.  There is only so much money in the world to lend and now the government is in competition with you to borrow that money.  Higher interest rates, higher costs, therefore inflation.

PS:  The Wall Street Journal published an article this week about this very subject of inflation entitled, High Inflation Making Business Risky by Diana Ransom.