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U.S. Consumers Face this Growing Threat in 2013

U.S. consumers spent less than expected this winter, which resulted in the worst holiday retail sales since 2008.

Analysts blame bad weather, but Money Morning Chief Investment Strategist Keith Fitz-Gerald disagrees.

Fitz-Gerald appeared on FOX Business Network's "Varney & Co." program Wednesday morning to discuss the reasons weighing on retail sales.

He said, simply put, U.S. consumers are worried about parting with their money. With the fiscal cliff still unresolved, Americans are worried that higher taxes could cut into already strained household budgets.

But Fitz-Gerald warned that there's more than uncertainty threatening U.S. consumers. There's a looming nightmare scenario that could hit them harder than fiscal cliff fears.

He's talking about rising inflation.

The consumer price index and the Federal Reserve will tell you otherwise, but it's hard to argue that there's inflation at the gas pump, the grocery store, and almost everywhere else you look.

"Reality is everybody's experiencing 9, 12, 15, 20% [inflation] in their pocketbooks," said Fitz-Gerald. "Evidently these guys in Washington don't eat, they don't shop for their own food, and they don't drive."

As a fiscal cliff resolution looks less likely, the impact of higher prices will only intensify and most Americans seem unaware of the dangers. Watch the accompanying video to hear Fitz-Gerald's analysis on how inflation could impact you and all U.S. consumers in 2013, as well as his favorite source for tracking inflation.

More Stories by Keith Fitz-Gerald:

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  1. Maria Aurora Inchaustegui Carlo | December 29, 2012

    thank you for to give help to the mothers to sigth the invest world and the people to sight the relity economic all the american have to know this reality we life give steps with a liberty finance to all america include south america peeru when i live we have to know more about the finance and economy administration because my people want to know about these thing for job join and the economies our bether that other past times and will go join of the hands to the future economic finance and no as other central american say have a finance liberty of the united states america u.s.a that is bad to our him dont know that lost
    i prefer my country have all the thecnology economics and finiance to know how to works and job in perfect armony for the good future of my the families without poor live
    very thanks
    maria inchaustegui

  2. H. Craig Bradley | December 29, 2012


    Pardon Me, but aren't you doing the same you accuse the Federal Government of doing with their CPI numbers by stating we currently have "up to 20% inflation/yr.". When questioned on camera in the video above, you responded that "your wife keeps careful records of food prices" at the local Costco. You substantiated 20% inflation based on the cost per pound of Salmon. O.k., but honestly Keith, is that a fair or accurate estimate of overall inflation? One item??

    Most Salmon available to retail customers is farm-raised, not wild salmon. So, if you paid $17/lb. this year for Wild Chinook Salmon (Alaska) compared to $8/lb. the same time last year, then it would suggest inflation is present. We already knew this fact, intuitively. However, Salmon seasons and therefore, harvests are notoriously variable from year to year. Supply and demand. In fact, most seafoods are this way ( Dungeness
    Crabs this year, for example). So, instead, why not collect data on at least a half dozen separate food items such as Costco Steaks, Cashew Nuts, etc. That way one item (wild salmon) does not bias your numbers.

  3. Forrest Byers | December 31, 2012

    The current fiasco of the loss of personal , individual freedom and liberty, by some apparent need to compromise with Keynesian Marxist idiocy is in my book, simply, "a bridge, too far". If the left, now that it is largely in power with the exception of the House of Representatives, where all spending, according to the Constitution has to start, being controlled by conservatives (Pray to God, that they do not buckle.)wants a revolution of overturning the status quo, for their utopia of gun confiscation, death panels, taxes so high as to kill individual initiative, wreaking economic havoc upon everyone except the selected elite, state enforced abortion, neighborhood citizen goon squads and God knows what else, then I say, defy them, refused to follow any law, pay any tax or comply with any edict, that violates the Constitution, its original intent and its respect for the rights of individual citizens, with its limitations on government of what that government cannot do. In other words, the left wants revolution, we as American citizens, can, will and should assert our "natural rights" as found in the Declaration of Independence, to declare our justified complaints with the offending governmental body and to declare our independence from the rule of such tyranny! This time, we bargain with not the seeming remnants of political consequence in games of chicken or Russian roulette, but with an armed citizenry defending their future, their country, their fortunes,their families, and their very lives!

  4. robert | January 2, 2013

    Obviously Keith knows zip about shopping. Reminds me of the time GHW Bush visited a supermarket and was amazed at the scanners.
    If the republicans have their way, all the old folks will be living the chained CPI. For the uninitiated, that is when you substitute chicken for steak, mullet for salmon, chicory for coffee, and a Corrola for your Cadillac. Live much lower on the hog, so to speak.
    The government, which is the actual source of all inflation, feels that it is fine for people who had nothing to do with it to suffer the consequences of inflation. Thus the chained CPI.
    Never mind that the elites wrecked the economy for their own profit, they must not be taxed to help restore it, so the Fed must print to cover, and create more inflation.
    Leave Costco, Keith, and go shopping in a supermarket. There is much to be learned.

    • Felix | January 7, 2013

      Robert, thanks for the chuckle, I also remember seeing the t.v. and Bush amazed while doing his FIRST shopping, I think it was for socks at the NEW scanners, not new to us of course.

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