Don’t lose sight of the bigger picture here. A 4% pop in menu prices doubles the Fed’s mystical 2% inflation target. And this scenario is playing out across the economy. This is precisely how inflation works. The Fed prints money. Government policymakers hand out money. The price of raw materials rises. The cost of labor rises. These costs get passed on to consumers. When it’s all said and done, the entire price structure is getting higher. Everything costs more. This is the inflationary pressure the Fed insists is “transitory.” Chipotle isn’t the only company facing rising labor costs. As a Fox News report noted, “Companies from Target, Costco, McDonald’s to theme parks such as Disney World have taken similar steps to bump employee pay.” And how do you think these companies will pay for these wage hikes? You can be certain the cost of everything from your Target t-shirt to your McDonald’s Mac is going to go up. The Consumer Price Index (CPI) has increased 2.7% through the first five months of the year. At this rate, we’re looking at a 6.5% increase in consumer prices for 2021. But as Peter Schiff said in a tweet, “It’s more likely that price increases during the 2nd half of the year will exceed the 1st, as retailers finally concede reality and pass on higher costs to customers.” Chipotle is the canary in the coal mine. You can’t wish away economics. You can’t print trillions of dollars out of thin air without impacting prices – whether they be consumer or asset prices. You can’t pay people not to work and expect them to work. You can’t willy-nilly raise wages and other costs of production without a corresponding increase in consumer prices. As Peter Schiff put it in a recent podcast, “We can’t just pretend and play make-believe and hope the problem goes away.” The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more
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