I’m responding to the article, “Shoppers feeling bah humbug. Three reasons struggling Americans will spend cautiously this year,” published on Nov. 27. The second reason listed in that article was higher costs. An example given was “Overall food prices are up 1.7 percent from a year ago.”

Many will claim the California drought is the real reason for food prices going up. I’d like to offer a more complex explanation.

The Federal Reserve is continuously printing the U.S. dollar as the world’s reserve currency. When we anger countries like Russia and China, they react by making trade deals with each other that exclude the use of the U.S. dollar. That takes U.S. dollars out of international circulation and more U.S. dollars come home. They flood our domestic market and decrease their own value. When the dollar’s value is decreased, the cost of goods and services increases, because it takes more dollars to pay for its proper value.

Don’t take my word for it. Open up a high-end ladies fashion magazine to see women’s shoes and pocket books selling for thousands of dollars each. That’s just one way to hide inflation.

Unfortunately, the more money in domestic circulation, the more Americans pay for their food.

The bottom line is the price of food will always get more expensive, and it will cut into consumer spending for other items. Today, a person who purchases food products with a long shelf life and stores them away will spend less money over the long term than those who don’t. Those who wait to purchase food as they need it will pay more because of inflation. It’s the same food, with two different consumer prices, because of the time line and how many more U.S. dollars will be in domestic circulation.

Douglas Papa

Hallowell


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