Inflation in the Bernanke era

We're told that inflation is currently low. Um, just don't tell that to the food shopper.

It's hard to ignore rising food prices, especially when they just keep going up and up. Here's how one food producer is handling it. See the two packages in the photo? Both of those packages cost exactly the same at the local HEB grocery store. The big one was the only one of the old packages left on the shelf, and all the rest were the smaller packages.

Note the weight. The new, smaller one is four ounces, and the old, bigger one is eight ounces. But the price was exactly the same.

Well, what's a producer to do? The wholesale price must be going up too, but they don't want to raise the price. So the solution is to reduce the quantity. Kind of a sneaky, but in this age of the mathematically challenged shopper, it probably goes unnoticed.

But never mind. Food prices are not factored into the inflation rate. Nothing to see here. Move along.