Oil Closes Above $100.00/Barrel, Toilet Paper Closes Above $1.00/Roll, Postage Rates Going Up Again !

Oil Closes Above $100.00/Barrel, Toilet Paper Closes Above $1.00/Roll, Postage Rates Going Up Again !

And yes, all of these increases are related.

Energy costs are driving up the price of all consumer goods and services. Raw materials, production and transportation costs are all being pushed higher because of the price of oil.

U.S. crude for March delivery jumped $4.51, closing yesterday at $100.01 a barrel on the New York Mercantile Exchange. The previous record close was $99.62 on January 2, 2008. It has never closed above the century mark until now.

In a recent shopping trip, I found single rolls of Scott toilet tissue selling at a national drugstore chain for $1.15 a roll. I’ve never seen single rolls of toilet paper priced at or above $1.00 a roll.

These prices levels are significant milestones, similar to when U.S. gasoline prices went above $1.00/gallon for the first time, back in the Summer of 1979. We feel that they portend even higher prices in the near future. Expect sharp increases to continue in the cost of living and inflation. Expect the size of those rolls of toilet paper to continue shrinking, while the price continues heading North. If you have any letters to mail, better do it soon. On second thought, use e-mail.

Trips to the supermarket are getting more painful every week. All of the basics, bread, milk, eggs, cereal, etc. are rising sharply. For instance, we’ve seen the price of a dozen eggs almost double in the last few months. Too bad gasoline doesn’t taste better, because milk is now almost double the price of gasoline, per gallon. We’vs seen some bakeries raising prices so often that they don’t even wait until their old packaging is used up before they raise the price. They are covering the printed prices on the plastic bags with stickers showing the new price. I’ve seen that some boxes of cereal have shrunk to less than 9 ounces. For instance, I spotted a 8.9 ounce box of General Mills Cheerios.

Who decides on these strange product sizes? Did a committee of pricing experts say that 9 ounces was way too big, but 8.75 ounces looked too small ? It’s voodoo marketing. It’s deception engineering. What’s next? The 8.1275 ounce box of Kellogg’s Frosted Flakes?

We can’t remember any time in the past 30 years that the cost of living has risen so sharply and for so long a period of time.

Nine months ago, the Postal Service raised the first class postage rate (up to one ounce) by two cents, to 41 cents. They have just announced another increase to take effect this Spring. No wonder they introduced their “Forever” stamp. They saw these frequent rate increases coming, and probably wanted to limit the public outcry. Unless you have lots of money to tie up in “Forever” stamps, the idea of locking in your postage rate is pretty meaningless. You’d be much better off investing your money anyway. What we need is the “Forever” gallon of gasoline and the “Forever” quart of milk. Shoppers going to the supermarket are looking more like stock market speculators every day. Should I buy that loaf of bread today? It might be 30 cents more tomorrow.

With these almost daily price increases and product downsizings, what we need is a new way of tracking the true cost of living. Forget about the U.S. government’s inflation index. Forget about the “market basket” price surveys. Forget about The Lundberg survey of gasoline prices. We will introduce the “Routing By Rumor National Toilet Paper Price Survey”, adjusted of course, for the shrinking size of toilet paper rolls. Laugh all you want. We think it will be a very accurate gauge of inflation.