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Originally posted by projectvxn
reply to post by g146541
The moral of the story is, those who already are out of work, and on food stamps, will be hit the hardest by these increases.
One would think that after the worst financial crisis since the Great Depression, Americans could at least catch a break for a while with deflationary forces keeping the cost of living relatively low. That’s not the case.
A special index created by the Labor Department to measure the actual cost of living for Americans hit a record high in February, according to data released Thursday, surpassing the old high in July 2008. The Chained Consumer Price Index, released along with the more widely-watched CPI, increased 0.5 percent to 127.4, from 126.8 in January. In July 2008, just as the housing crisis was tightening its grip, the Chained Consumer Price Index hit its previous record of 126.9.
Financial pressures on U.S. contractors grew worse in February as prices for key construction materials rose sharply even as prices construction firms charge for completed projects remained stagnant, according to an analysis of producer price index figures released by the Associated General Contractors of America (AGC).
Association officials said the price squeeze will make it harder for the construction industry to recover and urged federal officials to act on a series of recovery measures the group recently outlined.
“With construction spending hovering near a 10-year low, contractors are holding bids steady even while being hit with staggering price increases for key inputs,” said Ken Simonson, the association’s chief economist.
“That combination threatens to add to an already appalling toll of laid-off workers and shuttered construction firms.”
Oil-exporting countries are cutting holdings of U.S. government debt as energy prices rise, helping depress the dollar, the worst-performing major currency of the past six months.
Treasuries owned by oil producers and institutions such as U.K. banks that are proxies for Middle East nations fell 9 percent in the second half of 2010 to $654.6 billion, the first decline in the final six months of a year since the Treasury Department began compiling the data in 2006. The sales may continue, if history is any guide, because Barclays Plc says Middle East petroleum exporting nations have traditionally placed only 25 percent of their savings in dollar-based assets.
“Middle Eastern oil exporters are now getting this extra windfall of dollars and the question is on the margin what they want to do with that,” said Jeffrey Young, the head of North American foreign-exchange research at Barclays in New York. “It’s dollar negative” unless political risks around the world increase and spur demand for the safety of U.S. assets, he said.
The appeal of the dollar has diminished as the Federal Reserve keeps interest rates at almost zero, prints cash to purchase $600 billion of bonds in a policy known as quantitative easing and the budget deficit holds above $1 trillion. The currency fell to 61.3 percent of global foreign-exchange reserves in the third quarter, from a peak of 72.7 percent in 2001, the latest International Monetary Fund data show.