Image © pepsico.com

If you are a consumer that enjoys Mountain Dew, Pepsi, Lipton Tea, Aquafina Water, or the AMP line of energy drinks; Be prepared to pay 3 to 5% more for your products.

These price increases are directly linked to inflation.

In a memo sent to retailers dated June 29th, 2012, PepsiCo Foodservice’s Senior Vice President Timothy F. Trant stated the following:

Commodity inflation has been very high over the past several years and will continue in the coming year, so internal productivity must be supplemented with price actions in order to continue to deliver the high quality products and services you have come to expect from us.
With that in mind, we are announcing price adjustments that will increase the cost of our products +3-5 percent depending on the brand and package, PBC will honor existing pricing as published through 7/28/12, and these changes will take effect on 7/29/12.

Beginning on July 29th – the day of the Brickyard 400 NASCAR race in Indianapolis – the retail price of your PepsiCo products will be rising.

Which commodities are feeling the inflation?  Could it be corn?  Most of PepsiCo’s products do contain High Fructose Corn Syrup, after all.  Is it the plastics?  Is it the aluminum?

Mr. Trant had not returned our phone call for comment at the time of publishing.  The post will be updated accordingly should we receive comment from Mr. Trant, or another PepsiCo representative.

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I have done my best not to sound like Chicken Little, but there was absolutely no way I could in good conscience influence my readers into putting their assets into this bubble after the bubble.  The government needs you leveraged, consuming and cash-strapped.  This is not the time to be any of those.  Despite the GDP rise, which is quickly-becoming a false indicator, we are not recovering.  The government can’t even figure out why the GDP rose, but both of their explanations point to government liquidity in the market, not economic recovery.  My recommendations?  Put away some cash, get out of debt, invest, by cool stuff.  In that order.

I am not hedged against gold, a short on the market or in any other way trying to influence you so that I can make a buck.  I am conveying my current position.  My positions in the market during this whole fiasco have allowed me to increase my retirement account by11%, make money on a few equities, and overall protect my family’s assets.  Why?  Because I did not believe the Bush crew, I do not believe the Obama team, and I never believe the media.  I do my own research, look for true indicators, not just the cool meter that CNBC flashes or that Bernanke points at.

If I am wrong, I’ll admit it (my promise is that if Q4’09 and Q1’10 show growth over last year… I’ll write an article entitled, “I was wrong”), but so far… hasn’t happened.  I am struggling to figure out if we will go inflationary or deflationary because our government can’t make a decision and is making some of the most dramatic and ill-advised moves in history.  That is the same reason that business will cease to spend money.  A wise investor will not put money into a market if they cannot understand the principles upon which the market it based.  Our leadership wants to disassemble capitalism “brick-by-brick”, redistribute wealth, control the media, etc.  These uncertainties prevent me from doing any real investing.

In September we see that consumer spending dropped off dramatically.  Why?   Because the government wasn’t buying cars and houses for people anymore.  It proves that the economy isn’t recovering, only that the government was propping it up.  Even the administration admits that the growth in GDP was due to cash-for-clunkers and the stimulus bill.  That means that the American economy didn’t do anything.  It also means that the government’s artificial propping-up of the auto and housing industries will just cause a secondary crash in both.

I do not intend to cry, “the sky is falling”, but if that’s what it takes to prevent you from losing your nest egg, house, or livelihood, then so-be-it.  Call me Mr. Little if you must, but save, de-leverage, invest… then buy cool stuff.