Is the price of gas determined by politicians? It would appear so, at least in the state of Indiana. On Monday and Tuesday, gas sold for 3.99 or less at every gas station in town. Wednesday morning, it shot up to $4.19. Wonder why. Were prices artificially lowered before election day, in hopes you wouldn’t hold it against Biden’s buddies when you filled out your ballot? Now, a day later, we have costly post election surprises.
The Feds also waited until Wednesday to spring another surprise. Jerome Powell announced the benchmark interest rate to a range between .75 and 1%. This is the largest hike since 2000, following a .25 percentage point increase in March. And it’s going to get worse. They’ll be raising interest rates 7 more times this year, in an effort to fight skyrocketing inflation. Mortgage payments will be higher, and maybe home prices will quit going up. They hope.
If you have an upper middle class income of $$170,00 to $373,000, you really don’t care very much. Inflation may shrink the buying power of your bank account a bit, but not enough to impact your life style. You’ll still be living in your McMansion, going to gourmet restaurants, taking cruises, paying country club dues, and shopping in upscale food markets. You might even brag a bit on Facebook about the places you’ve been and the trips you’ve taken.
However, if you live in the average US household with a median income of around $70,000 or $80,000 a year, you’re headed for a post election downgrade. Take vacation plans: Instead of flying your family to a seaside resort in California or Florida , you’ll be lucky to pitch a tent in a park campground. Steak houses that charge $60 for a 4 oz steak will be reserved for the rich, famous, or those on a company expense account. Have you noticed the long lines at drive throughs like McDonald’s or Taco Bell?
Looking for some new summer clothes? You may decide last year’s will do just fine. Never mind the celebrities who wear thousands of dollars on their backs. Just because they can afford designer clothes, it doesn’t mean you can–unless, of course, your income in in the upper percentiles.