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No Inflation? That's Not What Food Prices Are Saying
CNBC.com | February 28, 2011 | 01:18 PM EST

With all the talk about $4 a gallon gas and the crisis in the Middle East, the specter of surging food prices has gotten pushed to the background.

That’s a mistake, considering that the struggle to put food on the table is what generated the riots in the first place. In the US we focus so much on gas because of the way higher transportation costs infect every sector of the economy, but rising grocery costs are a major threat as well.

Of course, we live in the land of no inflation.

Core cost of living is cruising along in the 1 to 2 percent range, according to government calculations, indicating that we have nothing to worry about when it comes to inflation concerns.

One can only imagine that the economists who project these assertions don’t have to eat.

By any measure imaginable, food prices are climbing and climbing fast and it’s not only in developing countries where income can’t keep up with the rise in the cost of goods.

Here in the US, food is putting a big bite on household budgets. More than 12 percent of after-tax income is now being spent on fuel and food, with more than half that number on the latter.

Commodity prices, as measured through the Standard & Poor’s GSCI, are up about 7 percent this year alone..

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