While the biggest price paid this week seems to have been by New York Governor Eliot Spitzer whose alleged participation in a high-end prostitution ring cost him his job, other high prices are being paid, mostly by the consumer, as the cost of everything seems to be rising. Here's a few you may be feeling:
Oil hits a record high
On Monday, as the Spitzer news broke, oil hit an all-time high of $108 per barrel, but the news was mostly buried. The market soared 400 points that day due to a Federal Reserve move to infuse more money into the economy, which Wall Street loved. By Thursday though, oil hit $111 a barrel, striking yet another all-time high. So what does this mean to you? Well, to no surprise it means higher prices at the gas pump. The national average reached a record high of $3.25 a gallon and is expected to hit $3.75 a gallon around Memorial Day. In California, we're sporting an average $3.72 at the pump already (ouch). On the less obvious side, it can mean higher costs for everyday products as companies pass along higher transportation costs of moving goods from place to place
Gold hits a record high
Jewelry just got more expensive. For the first time, the price of gold topped $1,000 an ounce. Why? Mainly because the market has been in the gutter and people see gold as a more secure investment opportunity. But the price of gold also tends to move in the opposite direction of the dollar, which, by the way, continues to hit all time lows against the Euro (one dollar equals 1.5 euros) and other currencies, such as the Japanese Yen.
Wheat prices soar
Cereal, bread, and pasta may be heading up in price as the cost of wheat soars to levels not seen since the early 1980s. The combination of increased demand abroad (primarily South Korea, Taiwan, Mexico, Nigeria and Venezuela) and decreased supply due to droughts across the world have driven up costs. Wheat is sold in bushels and is trading above $10 a bushel. It's not a record but it could lead to higher costs of products that rely on wheat.
The big picture
Prices of commodities rise and fall but when staple products that support the backbone of our consumer society are at an all time high, at the same time, it starts to wear on the consumer. Highly priced commodities quickly provide a more transparent view into how these products influence our lives in unanticipated ways. Surely the presidential candidates will have to address this over the coming months or we might be too poor to drive ourselves to the polls in November.
