All right, this is real money. You are the most potter pan of the show. Join our conference for the next half hour on twitter aj real money, ali velshi, facebook. Com aj real money. We read all of them. Inflation only rose by a pinch in february. Food prices overall are up about 1. 4 in the last year. The government says americans should expect to see food prices rise by as much as 3. 5 . In 2014 if thats true that would be the biggest increase weve seen in a few years. Okay, much of the rise will come from higher meat and dairy prices. Drought conditions in california and texas force farmers and ranches to cull their herds, but demand has been constant, so prices have been increasing. Meanwhile, prices for coffee and sugar are up because of dry weather in brazil. Coffee furthers have dropped up 72 . Hogs are 43 more expensive because of a virus that was killing some of them hoff as well as a midwest drought a couple of years. Oats have them for breakfast, up 29 . Wheat up 11 . Knowing which way price trends are headed helps you plan your food budget. Thats why you need to Pay Attention to these numbers. A little good news, maybe, the higher prices you paid for food last month were offset by lower prices at the bump. The government computes its price changes in a basket of goods that it believes that americans spend every month. Knowing how they calculate inflation is important to all of us because it effects everything from the Mortgage Rates to the cost of living increases to social security. Later in this show, you got to stay with me the whole time. Later in the show im going to plain just how the sausage is made when it comes to calculating inflation. In the meantime, the biggest jump for your food bill will be for beef. Sticker shock at the supermarket. Consumers are paying the highest prices for beef in 30 years. The average price per pound is now 3. 55. Thats up 5 from a year ago. Steaks and other cuts are even more, and theyre only expected to rise. Economists say the cause is simple. Low supply and high demand. A major factor weighing on supply right now is the drought both in the south and central planes particularly texas and in california. The lack of water drives up feed prices. Those high feed costs have caused losses in the beef industry. Those losses have encouraged some individuals to liquidate some of the herd so we have a very low beef herd, the lowest since 1962. That again is giving us these very small supplies and high beef prices. Reporter the professor said one reason why cattle supply has been shrinking over the past few decades is because we eat less beef. U. S. Consumption peaked in the 1970s. Today supply is low because because of the drought an there is driving demand especially in china. The economy is also boosting demand. When there is more income, people do spend more on beef and meats. Reporter expanding supply takes years and thats because of the life cycle of cows. With no quick solution in sight some analysts say the price of beef will continue to rise for the next two years. Mary snow, al jazeera. Well, today on twitter and facebook ive been asking you, the latest date that shows food prices are soaring, does the cost of few change the way you buy groceries. June bug tweets, since i buy a lot of milk for my babies ill walk an extra walk to get it cheaper. Mothers are very smart about these things. Jeff said im eating a lot of chicken, beans and rice instead of beef now. Probably healthier for my age. Dont expect the cost of your food to go down any soon. The department of agriculture expect over all food prices to rise 3. 5 this year. Specifically meats could rise up to 3 . Poultry could rise up 4 . Fruits and vegetables up 3. 5 more than what you paid for the same stuff a year ago. Chris christopher the director of consumer economics said the trend will accelerate in the second half of the year. Why the second half of the year . Well, it took time for everything to accumulate, and its going to increase. Our forecasts are not as high as what the federal government says theyre going to be, but i have in mind that food prices have not been increasing very fast for about six to seven months. Whati mean, they all seem to be Different Reasons why things are going up. In the case of the hogs there was some disease, drought in the midwest. In the case of coffee and sugar. We find oils that are made from nuts in southeast asia, its largely seems to be weather, but its not one thing. Its not one thing. What makes this particular food price spike that we saw in the cpi report this morning somewhat different is that about four to five years ago there was a global food price increase, and they were rationing rice in some whole sale club retailer. I remember that. There is a strong food supply for basics, so its not going to bethe increases in food wont be that strong. You know, you point out the rice shortage a few years ago because a lot of crops had been emphasized. Corn crops have been emphasize because of ethanol. How easy is it to change consumer and prow producing behr in the face of food crisis. Research shows if beef prices go up, americans, they like their meat. Theyll go to a lower grade type of red meat or they might switch to a cheapereven a chicken or Something Like that. Over all beef preferences are not as strong as they used to be, as you pointed out in your segment, so its easy to sort of switch things around to a certain degree. You know, one of the things that we saw in the report, and i didnt really understand this very well. Food costs at home have gone up by a certain percentage. Food costs eating out of home have gone up by a higher percentage. What is the relationship . Well, part of thepart of having the restaurant you pay for the ingredients, and you pay for the labor thats involved. We have to be a little careful when were looking at this cti report. Not one report makes a trend, but over all there is a tendency for these food prices to increase, and there is good reason as you mentioned the drought, texas and california and what is happening to the live stock. Is there an economic effect prodly if this continues . I dont know how serious 3. 5 increase in food over all would be . Will this effect the economy as a whole . It does effect the economy as a whole. We dont think the numbers will be that strong. We think it will be around 2 . However, people who live paycheck to paycheck, theyre going to have a hard time. However, in this particular report food prices went up, Natural Gas Services went up because people are cranking up the heat, costing more money. However, gasoline price asks fall, and that is keeping the over all inflation sort of subdued. That is a good point you make there. Thank you for that. Chris christopher is the director of consumer economics at ihs global insight. Just as the collapse of the Housing Market helped drive america into a recession, housing comeback is critical to boosting economic recovery. Today we learned that the construction of new homes fell again in february. That is the Third Straight month. Chris said dont look at one report as a trend. Three starts to look like a trend. Thats bad news. But there is a silver lining. Building permits surged 7. 7 from january to the highest level in four months. Thats a sign that American Builders are getting ready for more Construction Projects in the coming months. A lot of them are looking to build multi family homes. Those would be apartments and condos. The Federal Reserve used to be notoriously fight lipped about potential policy moves. Former chair Alan Greenspan were so elusive people would stare at his briefcase where the trend would continue. If greenspans briefcase was bulging, it was full of evidence that he gathered to persuade other fed members to raise rates. A whole lot changed when ben bernanke took over in 2006. The fed chief ushered in a new era of transparency. He began to hold Quarterly Press conferences to reveal more to the public and public forecasts four times a year. He pinpointed where inflation rates had to be before the fed would begin raising rates begin. Why does this all matter . Because now there is a new fed chief in town and the way she carries her term could change the cores of economic recovery. Janet yellen has declined to speak since she took over. No one knows what to expect when she speaks for the first time. President putin has the upper hand in europe, and president reagan predicted it three decades earlier. And microsoft with a surge not seen since the tech boom. Those stories and more as real money continues. Keep it here. Today russian president Vladimir Putin raised the ante by signing the treaty to annex crimea too the russian federation. Europes dependence on Russian Energy goes back to the 1980s. A lot can change in three decades, yet a lot stays the same. When president reagan took office in 1981 the United States and soviet union were Nuclear Superpowers confronting each other. Popular unrest against moscows iron grip was stirring in poland. Moscow amassed troops on Poland Border and threatened to invade. I have discussed on other occasions the elements of western policies towards the soviet union. To safeguard our interests and protect the peace. What im describing now is a plan and hope for the long term, the march for freedom and democracy that will leave marxism and leninism on the ash. Reporter european allies werallieswere sympathetic, but t the same time signing contracts with moscow. For europe the deals meant new Energy Sources to fuel their economies. For moscow it meant making money and maintaining influence. But the Reagan Administration abscessed over how to thwart the deals. This c. I. A. Report warned the president. Moscow would be loathed to use its gas as a blunt weapon to pressure western europe because it needs the gas revenue badly, it would be able to exert subtle political pressure. Despite reagans warnings, europe went ahead with the contracts and three decades later russia is an energy superpower. The European Union now depends on russia for a quarter of its natural gas supplies through that very pipeline network. So much has changed in three decades. The fall of the berlin wall. The fall of communism. The end of the cold war, yet so much remains the same. All these years later reagans warwarnings that reliance on mow energy is proving to be true. They opened to western Businesses Companies that only had limited opportunities there before. While u. S. Trade with russia was a small 40 billion last year several big businesses have a lot at stake there. Joining me now to discuss the investments is danny, staff writer lets start with two companies we know very well, pepsi and its rival cocacola. Yes, so pepsi did 5 billion in net revenue last year in russia, that was more than 7 of their total net revenue on the year. If they lose access to that market it would be a significant loss for them. Cocacolaer, on the other happened, has been a bottle maker since 2016 and they have investments there and revenue there. So if they get caught as well it wont be as bad as pepsi but coke will still feel a hit. Were interested in the Energy Situation in russia, and russia is a major energy producer. Exxonmobil has a big deal with a russian company. Yes, exxon signed an agreement with the staterun oil company to drill in the arctic, and theyre getting ready to start that drilling. We dont know how much oil is up there, but it has the potential to be extremely lucrative, were talking hundreds of billions of dollars, and any sanctions that dont allow them to work together, it could deny them a lucrative source of energy for the years to come. These are companies that people hold in their 401ks or investment in, and the relationship there is very intricate. Lets talk about a car company. Lets start with General Motors and then well talk about ford. Gm sold more than 250,000 cars there last year which is a surprising amount. They have seen really good growth in recent years and theyre looking forward to stronger growth in the upcoming years. The potential for that market as well, and any potential sanctions that come out of it would really hurt them and we dues that potential growth. Ford has a smaller footprint but still significant. They do. They have 105,000 cars they sold there last year. They both have Production Facility there is. It wont be quite as big of a hit. Ford would feel it as well. What is the senseclearly these are american companies. They cant find themselves on the wrong side of history, saying the wrong thing, but at the same time, but these companies have a history of working in troubled spots in the world. Any particular sense of how they would operate under a sanctions environment . Right now theyre nervous. They were happy today that the sanctions were only on russian individuals and people involved in the ukraine crisis and there wasnt substantial sanctions on russian firms. Theyre working under the table hoping to avoid sanctions. Im not sure if they formulated a plan for what they would do if that outcome were to happen, but its a concern of theirs. Thank you, staff writer at the new republic. Microsoft might not be the Coolest Company on the block any more, but its stock was on a terror today. Coming up we ask if the Software Giant is turning another corner with its new boss, and how to use your familys grocery list to come up with inflation for america. That and more on real money. Keep it right here. Lisa fletcher with what is coming up on the stream. Youre talking about hazing. What is new about it . The fraternity dubbed the deadliest in the nation is banning hazing, and many are saying too little too late and are asking if the fraternity should be banned forever. Even fraternities that are trying the hardest to turn things around with hazing are struggling. We look at how deep the culture of secrecy plays a role. Reporter thats the stream after real money. New yorks attorney general Erik Schneiderman is ramping up his campaign against what he says are unfair advantages enjoyed by elite stock traders. I admit this is complicated but its important to you because these traders now account for half of all the stocks traded in the United States. Schneiderman wants stock exchanges to stop giving traders ways to trade information before other investors can possibly react. High frequency traders use super fast computers, complex programs and rate stocks that approach the speed of light. They use algorithms to react to data much faster than any human can, and they execute thousands of stock trades a second. Many generating profits less than a penny per share but when you add them up its big money. Stock markets have become too focused on focusing on these traders than others. More damage control at General Motors keeps chief executive mary barra, in her best captain impression, she admitted that they took too long to bring the cars in to be fixed. 12 people died in connection to faulty ignition switches. And puttin g. Has put a single n in charge of recall and safety issues. A maybe gm can be a company that we again can be proud of. On rumors that the Company SignatureMicrosoft Office software will soon will be able to run on the apple ipad. The universal software and Cloud Service used by businesses worldwide to create documents, spread sheets and presentations. There has been no announcement about creating a mobile platform but its expecting word to break by the end of the month. You alex, its good to see you. Great to be back on. We joked that you have pulled the short straw getting to cover may cromicrosoft. You know, there are real hopes for microsoft under its new boss. I think there are very large hopes. Its become a lot less uncool. It has been making changes to how it operates, how it does business, and now its leadership style. I wouldnt say its a boring topic any more. What would you say is the most interesting thing or the thing that will change the culture and impression that we have of microsoft. You cant deny that microsoft changes have been massive. People have left, thats very important. But inside the last year they have announced a new Business Model and reorganized their internal structure. The changes at microsoft have been huge. Youre worried not just about the companys ability to perform, which you seem to be bullishen, youre worried about the perception. Perception matters a lot when youre buying stuff that it have a cool factor. Microsoft has a lot of work to do there. What do you think they can do about that . Is the ceo part of that whole thing . Steve bomber went through a decade of not being the cool guy. Is the new coe some ho ceo more . Cool could be a magical thing and it could come out of nowhere. But really what it is is call qy at good prices. If they do, cool will come. Do you think it be used on a ipad. Everyone im talking to is saying the exact same thing. If its not office for ipad i think people will be disappointed and the stock will go down. Whats the significance of office for ipad . Well, it means that microsoft is not only betting on windows, theyre willing to sell their products and platforms and find a home in enterprise. If you put office on the ipad you could sell ipad in different channels. People could use them better. Theyre saying yes, were on all windows but also on other platforms. And investors think that would be unlockable revenue stream there. Alex, good to talk to you, and come back and tell us what you end up learning. Alex is a writer at tech crunch. At the top of the show i promised to explain how the government measures inflation. Remember i told you a that i was going to show you how sausage is made. This is more interesting than it sounds. This is important. Janet yellen watches inexplanation, and it can effect everything from the mortgage payment to how much interest you earn or dont earn on your savings. The interesting thing is how the sausage is actually made. The Consumer Price index is the measure of the change in prices of 80,000 items in a basket of goods and services that range from bacon to banana, lawncare to wedge care. From toys to tuition, its a big basket. It all ends up on the Shopping List of some 28,000 urban families who keep records that are examined by government workers. Those workers track the prices of everything from ice cream to flat screen t. V. s at 23,000 retailers service businesses, food trucks. Even vending machines. Thats it for us. Tomorrow what janet yellen means for your prosperity. Im ali velshi. This is real money. Hi, im Lisa Fletcher and youre in the stream. One of americas Largest College fraternities is ending its practice of hazing recruits. The fraternity was reportedly with the most reported hazing deaths. And others are following suit. The decades long practice. As always, raj is bringing in all of your Live Feedback in the show, and raj, whether