Government spokesmen always like to downplay inflation numbers, for a very good reason. To anyone old enough to remember the 1970s, inflation is a very scary word. Yet we're already seeing signs that the cost of living in this country（USA) has begun accelerating.
Let's consider one of the basic necessities for a moment — food.
This year alone, corn, oats, coffee, cocoa, sugar, soybeans, rice and many other staple foods have all went up sharply in price. At the same time, oil has gone from $50 a barrel to over $80. Most industrial commodities are near or at record highs, despite the recent recession. Precious metals too have hit record highs.
Soon, we expect, many more people will feel the pain as companies will start passing higher costs on to the consumer. As the Fed continues to devalue the dollar via quantitative easing, even the official inflation figures will start racing higher.
Higher inflation will act like a tax — biting into your income and the value of your investments.
（Modified from Dr. Stephen Leeb's e-mail)