One of the problems with having a mortal existence is that, in spite of the ever-constant grind to secure our material needs, many things are simply beyond our control. Two of these things are market forces and the weather. And when these two forces combine, we are often left stranded on the intersection of supply and demand, and market expectations. The result is usually a choice of us consumers having to deal with less of what we want/need, or having to pay more. In two particular cases from last week, consumers can soon expect to pay more due to instances of things being beyond our control.
Late last week, the major credit card and many of the nation's retailer reached a record settlement in a long-running lawsuit that alleged the card issuers conspired to fix the fees that stores pay to accept credit cards. Visa, MasterCard and banks agreed to pay retailers at least $6 billion in a 10-year case that alleged the card issuers conspired to fix the fees that stores pay to accept credit cards.
Called by lawyers involved in the case the "largest antitrust settlement in U.S. history," the settlement is seen as a major victory for merchants that have long complained about the billions of dollars in so-called "swipe" or "interchange" fees that they pay to banks for purchases made using plastic. But at a time when shoppers increasingly are using credit and debit cards, merchants will face a dilemma: Whether to charge shoppers extra for using plastic, and if so, how to do so without angering them.
As part of the settlement, announced last Friday, retailers will be allowed to charge customers more if they pay using a credit card, just as many gas stations do currently. The upshot...expect to pay more every time you swipe your credit and debit cards.
The winners in this Big Money settlement: the major credit card issuing banks and retailers! The losers...you and I as consumers. The advice here is to avoid being nickeled-and-dimed by banks for using debit and credit cards, and use cash whenever possible
Late last week, the National Climatic Data Center announced that 55% of the country “was in a moderate to extreme drought” ending for the month of June; no improvement in this condition is predicted for the month of July. The immediate result is horribly-impaired yields and major plant damage to many water-dependent crops, including soybeans, corn, and wheat…the latter two being hit particularly hard. The intermediate result is the expected rise in prices we will all be feeling in the coming months. Current trends portent this impending reality.
As of this writing the price of corn is already up 38% in price, while wheat is up 29%, both due to the current drought. What’s more, there is a better than good chance that we will experience record beef prices in the near future because of the rising prices of feed, and the time it takes for shrinking beef yields to recover.
And with food-themed occasions such as Thanksgiving and Christmas in the not-too-distant future, expect to spend more about that time of year…and not just on gifts. The time to plan ahead is now.
For a detailed explanation of this year's drought effect on farm crops and food prices, watch the video: