We have yet another food product to add to the inflation list. This time it's cattle. Cattle futures on the Chicago Mercantile Exchange closed at an all-time high of $1.1752 per pound, as reported in the Wall Street Journal.

Beef is a in a special category. Unlike grains, which are harvested yearly, it takes about three years to raise cattle and bring them to market. High grain prices and high exports have shrunk the size of herds. They are at their lowest levels since the 1950s. With prices so high, some cattle ranchers choose to slaughter their cattle rather than let them mature to full term. These young cattle are called feeder cattle.

Things are not working out so well for those at the Fed who deny that inflation exists. After all, its job is to keep the currency strong by putting out brush fires of inflationary expectations before they can become a firestorm of price spike fears. And if current consumers' expectations of inflation are any measure, the Fed is not doing its job.

That's according to the Associated Press, which reports that 90% of those it polled expect ballooning costs to squeeze them financially over the next half-year. Consumers have less money than they used to -- the median income is down since 2000 from $61,000 to $60,500. And prices have risen -- food has tripled in many cases and gasoline prices are up to around $4.20 a gallon. But the Fed does not see this -- it measures inflation excluding food and fuel -- and has kept rates at 2%.

And with housing in the tank and lenders in trouble, they can't borrow their way to balancing their budgets. Since the Fed is not controlling inflation, people are coping by cutting back. They are driving less, easing off the air conditioning and heating at home and cutting corners elsewhere. Half are curtailing vacation plans; nearly as many are considering buying cars that burn less gas.