Gas Prices Explode, Walmart TanksFebruary 21st, 2013
Corporate media outlets give off the impression that the US is in the middle of a roaring economic recovery. After all, the Dow Jones Industrial Average is pushing record levels. However, presenting this narrative requires skipping over a few details. First off, the US economy shrank during the last quarter of 2012.
Now, as 2013 begins, disturbing new economic trends are emerging. ABC News is reporting that gas prices have risen for 35 straight days, pushing prices up 50 cents, at a pace unmatched since 2009. Experts warn that a $5 per gallon national average might be on the way. Meanwhile, leaked internal emails at Walmart referred to the store’s February sales as a “total disaster,” citing the payroll tax hike and rising gas prices as causes of the unexpected collapse in consumer spending.
Gas Prices Expected to Rise Further
Typically, gas prices rise during certain seasons. For example, fuel prices tend to surge during the summer months. An early price surge at this point in the year might spell disaster for summer driving. If pump costs are already this high, will they push $5 per gallon by June or July?
Meanwhile, the Dow Jones Industrial Average seems to have disconnected from the market, surging to record levels despite weak data on employment, consumer spending, and GDP growth. Could this be a sign of inflationary pressure? While precious metals seem to be dropping precipitously, inflationary pressure tends to take hold before price inflation occurs in response. After all, fake paper has to be appropriated, divvied up to contractors, issued as paychecks, and then spent at the point of sale in order to affect prices. As such, it makes sense that inflation hits the Dow Jones before it hits the broader economy.
Walmart’s Struggles Reflect Those of Lower and Middle Income Families
A vast percentage of lower and middle income families rely on Walmart’s low prices for daily goods. When Walmart’s sales drop, that likely means that consumers are spending less on products that they need desperately, like groceries and household items. With gas prices rising, check-to-check workers have less to spend. The recent payroll tax hike is also putting the squeeze on already cash-strapped consumers.
Though Walmart will certainly survive, its current struggles may foreshadow a tough economy as we drift further into 2013. Rising gas prices may also mean price inflation is on the way. The US dollar is already in jeopardy as it is — a sudden burst in inflation could at any time cause other nations to reject fiat Fed notes as the world’s reserve currency.
Is this just a tiny bump on the road to recovery as the mainstream media would have you believe? Are we, instead, at the precipice of an unprecedented economic crisis? Time will tell. In the meantime, get ready for higher prices at the pump.