This is real money and youre the most important part of the show. Join our live conversation on twitter realmoney or facebook. Com ajrealmoney. New Inflation Numbers show prices overall in america only rose by a pinch in february. The Consumer Price index was up 1. 1 compared to the same time last year. Not so bad. But food prices overall are up about 1. 4 in the last year, and the government says americans should expect to see food prices rise by as much as 3. 5 in 2014. Now, if that is true, that would be the biggest increase in three years. Much of the rise will come from higher meat and dairy prices. Drought conditions in california and texas forced farmers and ranchers to cull their herds, but demand has been constant, so prices are increasing. Then theres milk. A growing appetite for it in asia is tightening supply here in america. Meanwhi meanwhile, prices for coffee and sugar are up because of dry weather in brazil. Coffee futures are up 72 since december. Hogs 43 more expensive because of a virus killing them off. Theyre killing off little piglets as well as midwest drought. Oats are up 29 . Wheat is up 11 . Knowing which way these price trends are headed helps you plan your food budget. Thats why you need to Pay Attention to numbers. A little good news. Maybe the higher prices you paid for food last month were offset by lower prices at the gas pump. The government computes monthly Inflation Numbers by measuring price changes of a basket of goods that it believes americans spend on every month. Knowing how the government calculates inflation is important to all of us, because inflation affects everything from our Mortgage Rates to the cost of living increases to social security. Thats why later in the show im going to explain just how the sausage is made when it comes to calculating inflation. In the meantime, you notice that the biggest price jumps to your food bill will be for beef. Mary snow explains why. Reporter sticker shock at the supermarket. Consumers are paying the highest prices for beef in 30 years. The average price of ground beef 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 is the drought, both in the south and Central Plains particularly texas and california. The lack of water drives up feed prices. Those high feed costs caused losses in the beef industry. Those losses then 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 very small supplies and high beef prices. Reporter professor hurt says one reason cow supply is shrinking over the last few decades is because we eat less consumption. U. S. Consumption peaked in the 1970s, so today supply is low. Its smaller due to the drought, and theres rising demands, especially from china. An improving u. S. Economy is also boosting demand. When incomes are better, they spend more money on beef and it leads the way. People want to consume more beef. Reporter while theyre increase in demand, expanding supply takes year because of the life cycle cows. With no quick solution in sight, some analysts say the prices of beef will continue to rise for the next two years. Mary snow, al jazeera. The west is on the wrong path with Vladimir Putin. That from a man that knows the russian president personally. He said the economic sanctions in place right now wont do a thing to stop putins ambition to take over all of the ukraine. He was the chief economic adviser from 2000 to five and hes now a season fellow at the kato institute. I asked him about the latest sanctions imposed by the white house. I think that this new set of sanctions definitely would raise a level of punishment for some of the russian persons. Nevertheless, i seriously doubt that those sanctions would produce the desired effect on the russian side. We can we have seen the russian side retaliated with their sanctions against lawmakers. It seems to me that both sides involved in this battle do still have a lot of things. So that is why for the time being we will see escalation. We can see it from both sides without any of the decisive breakthroughs. Obviously, we cant see escalation to the ultimate point, because both countries have nuclear arms. Where does it become interesting and effective . Obviously, russias big thing it can play is the natural gas, and the wests economic tool is the ability to trade. Whether they the sort of trade sanctions that they put on iran where they couldnt conduct trades through the banking system, the Global Banking system. How far do you think this could go . I have to admit that just i think the approach taken by the u. S. Administration is not very effective. They could suddenly attack gas. They could attack oil. They could attack different sectors of russian industry. It will not produce any desired effect. Please remember russia was part of the soviet union and it was isolated as an economic system. It was aubl to survive, so that is why the u. S. Will try to impose a situation that would be similar to what russia was living just in it. It will not have substantial effect on the russian economy. Your point is the russian economy is familiar with being isolated from the of the world and can manage that better than other economies can . Exactly. So i would not say it was better, but we have seen such countries like iran, iraq, north korea. They have sanctions for years, sometimes even for the kids. Nevertheless, in those cases none of those countries was forced to change their behavior. So russia comes with much more diversified economy and stronger support from reserves and so on. That is why we can see a very prolonged battle without any clear results. You were part of the effort to open up the russian economy, to make it much more of a capitalist economy. How far down that road did russia get . Okay. Once again, the question is what exactly u. S. Administration and the west would like will likely see. If the result is a withdrawal of the Russian Troops from crimea, there should be a different approach. If there is a desire just to send them off to the place without any serious results, they could continue with the current sanctions. What would the actions from the west be that you would recommend could actually move russia to rethink its actions in crimea and ukraine . I would try to wait to recommend anything, but just i would remind what kind of actions have been undertaken by the u. S. Administration during the iranian crisis, during the crisis when iran has captured u. S. Embassy. That time, if im not mistaken, u. S. Administration has frozen assets for the reserves the iran in the United States and in europe. I think Something Like that could have much more pronounced effect on the behavior of the aggressor. You were very close to Vladimir Putin and know him personally. What is he trying to achieve here . Okay. Im trying not to discuss personal habits of mr. Putin, but in this particular case i think its a very big mistake of the west, i would say the west is not in touch with reality of the world of mr. Putin. Mr. Putin is pretty serious in this particular engagement. He is not going to give in to geopolitical pressure. Hes very serious to grab crimea and establish control of the ukraine, and hes very serious to establish control over some other parts of the postsoviet world. So that is why they approach something that could produce a desired effect should be qualitatively different. Sir, its a pleasure to talk to you. Thank you for being with us to give us some of your insight into this. Hes a former chief economic adviser to president putin, and hes a senior fellow at the catu institute. While the idea of sanctions might appeal to americans, its trickier for allies in europe. The reason . Europes dependence on Russian Energy supplies. Its a cold war conundrum that date back to the 80s. That puts severe limits on what the west can do. A lot can change in three decades and a lot stays the same. When president reagan took office in 1981 the United States and soviet union were Nuclear Superpowers confronting each other. Possible unrest was stirring in communist poland. In response moscow amassed troops on polands border and threatened to invade. Against this backdrop, reagan sounded the alarm bells in european capitals over soviet aggressiveness in the world. I have discussed on other occasions the elements of western policies towards the soviet unio soviet union to safeguard or interests and protect the piece. What im describing now is the plan and hope for the long term. The march of freedom. Reporter european allies were sympathetic, but they were busy at the same time signing contracts with moscow to extend the trans siberian natural gas pipeline into western europe. For europe the deals meant new Energy Sources to fuel their economies. For moscow they meant making money and maintaining influence. The Reagan Administration obsessed over how to thwart the deals. This cia memo warned the protection in most likely circumstances they would use the gas as a blunt pressure for western europe because it needs the revenue badly, it could exert subtle political pressure. Despite reagans warnings, western europe went ahead with the pipeline contract and a web of pipelines grew across europe. 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 many 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 warning that the wests room for maneuver with moscow would be hamstring by reliance on Russian Energy is now proving true. Home builders in america are still reeling from the recession. Coming up i talk to one of the biggest in the country about housing recovery. Later, witches for hire. The ancient art used to search for a precious commodity. That story and more as real money continues. Keep it here. Everyday, someone leaves their home, searching for a better life. Two hours in, you come up on a body. Now, in a breakthough television event, Al Jazeera America takes you beyond the debate. Experience first hand the tragic journey of these migrents. A lot of people dont have a clue, what goes on when you live near the border. Six strangers, with different points of view. I dont believe in borders. Our government is allowing a invasion get to experience illegal immigration, up close and personal. Its very overwhelming to see this many people that have perished. A lot of families taht dont know where their babies went i wanna make sure that her life, its remembered. What happens when lost lives are relived . The only way to find out is to see it yourselves. On borderland only on Al Jazeera America hey guys, wanna come to the United States . Al Jazeera America presents extraordinary documentaries. Ive seen nothing like this before in my entire life. The amazon rainforest is going up in smoke. Hundreds of kilometers square are disappearing in a day here. Indigenous communities at risk. If their forest continues to disappear, then eventually these people will disappear. This british firefighter joins a group of brave men. The most surprising thing for me is the size of the fires that come through. Absolutely brutal. Toughest place to be a firefighter. Tonight at 9 eastern, on Al Jazeera America. Just as the collapse of the Housing Market drove the u. S. Into a recession, the housing comeback is critical. They say construction of new homes fell again in february for the Third Straight month, 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 ready for more Construction Projects in the coming months. A lot are looking to build multifamily homes like apartments or condos. For a perspective i talked to a head of hubnanian enterprises. I asked him what he thinks of the Housing Market right now. Its been moving around. Last year it started off with a bang, and it was a roaring housing recovery. Toward the tail end of the year it was choppy. The winter was obviously terrible in terms of weather, and that didnt help. That erode the some of the confidence. In the last few weeks, frankly, i think things are turning around and the new surveys will show much more positive results. Weather, psych he on someone selling their own home. Does it affect big Home Builders . Absolutely. We have a lot of operations in minneapolis, chicago, new jersey and washington. They were all very much affected. Nobody wants to shop for a home with 8 inches of snow on the ground or its freezing or cold. Lets talk about what we were talking about earlier, the idea that Mortgage Rates may still go up, even if the fed says were not moving until the middle of 2015, Mortgage Rates are a percent higher than a year ago, and they might inch up. Does that have a substantial impact if Mortgage Rates go from 4. 4 to 5 . Snoo th. That kind of movement wont be a real problem. Back in 1981 and 1982, Mortgage Rates hit 18 , and we built more housing as a nation that year than we did this last year. Peoples memories are short. Housing demand is driven by household creation. Thats positive. They might have to taper what they expect to buy. It might not be a 4,000 square foot home, and it might be a town home, but ultimately they have to buy shelter. Household creates a bit of an issue because we have iweird recovery going on where a lot of young people the arent getting the jobs they were going to get because a lot of older people are hanging onto the jobs. Do you see fewer younger buyers . Whats important is demographics are a longterm trend, and almost every demographer, the brookings institute, moodys, all project this decade about 1. 4 million to 1. 5 million households per year being added to the population. Thats a big number. A little bigger than last decade. The issue is when do they come in . Theres pentup sdmand coming lose ovr the last year or two. What do you think about peoples abilities to get mortgages . This is an important thing for your business. Clearly more challenging than it was ten years ago. Its slowly getting back to normal. The pendulum reacted and moved far in the other direction after the sub prime mess and everybody was overly restricted. I think thats going to be easing and getting back to normal. Youve done a good job over the years adapting to the market without go all over the map. You were dealing with a particular segment. Not a particular luxury under the segment many years ago. You added luxury homes and homes for different sectors of the population. Where do you see growth and weakness . If you look at pure demographics there should be a lot of growth in the 55 and over. The 14 million projected households that grow this decade, inl something close to 60plus percent but about that pez are over 55. I think thats an important niche. Its one were active in, and its an important one. Back in 2005 when you built over 20,000 homes versus 6,000 last year, what feels good to you . What would feel healthy . Well, continued growth, and weve grown 50 over the last two years and we have a lot of growth trajectory behind me. We bought a lot of land and got the capel tal to grow. I dont have a set number, but were pleased to see Significant Growth and see it continue. At your size of company, is there a problem getting land . No. We have been active in finding opportunities. Interestingly as home prices go up, land values go up. That causes more sellers to say okay, im willing to sell now. They might not have been willing to sell over the last two years because prices were lower. Great conversation. I hope you come back and talk to us some more. Okay. Hes the president and ceo. Toyota is settling a criminal case with the u. S. Government that has big implications for general motors. Let me explain. Toyota is paying 1. 2 billion to settle a fouryear probe into whether the automaker misled investigators and the public about cars that suddenly accelerated causing injuries and death. Toyota had to admit it misled consumers. As you remember, toyota ended up recalling about 10 million vehicles with various problems. This settlement comes as gm is embroiled in its own recall crisis, and it sparks why they wanted a deek cade before they took academy. They have defective ignition swichls that can turn off engines disabling air bags. Listen to what eric holder said and imagine your ceo mary berra. They shouldnt repeat toyotas mistake. The recall may damage a companys reputation, but deceiving your customers makes that taj far more lasting. Holder also expects a settlement with toyota will serve as a model how to approach future cases involving car companies. In a desperate search for water, sopt drought stricken farmers are hiring witching to help them find it. Im talking to one coming up. The drought in california has some farmers calling for a witch doctor literally. Theyre turning to an oldfashioned practice called dousing or water witching. It involving a copper rod or piece of wood to look for groundwater and it involves a persons spiritual energy. The government says there are thousands of water witches in the United States. It dates back centuries brought to america by european settlers. Theres no Scientific Evidence of dousing working. Drilling wells is expensive and can cost up to 10,000 apiece. The idea is they can help you avoid drilling in the wrong place and help you save money. I talked to mark mondovi, and hes been dousing for 35 years and says hes found over 100 wells. I asked him to show us how its its done. This is my tool of the trade. Very simple and cheap put very effective. Tell us how you witch your property, how you do that. How do you use these . Would i object able to do it . Many people have the ability. I dont know if you specifically do, but it would be very easy to find out. I would say over 50 of the people have some ability to douse. What do you do . Give me an example of how you would do it if you douse the property. If i douse the property i walk the perimeter of the property using hi dousing rods holding them like this. I simply think or ask them to find an underground water source. Just to give you an example, is there any water on this property . When they cross, that means yes. Which direction is the water . So i would simply follow my rods and walk that direction until i find some underfwround streams. No, its not just finding waters with these rods but its finding the most amount of water. I have a simple philosophy. You can never have too much water. Id rather find the biggest underground source possible for a person. If they only use half it, so much the better. Whats your success rate . Im over 95 . Wow. I mean, is this magnetic or gee logical or spiritual . You know, its not spiritual. I think its an energy you have. Theres no Science Behind this, but i believe its a Similar Energy that people have that run ouji boards and i played with them as a kid and can make it work. I found out when a douser gave me a forked willow and we walked through the vineyard and the willows went down and he said you have it. I never thought anything about it after that. Thats incredible. Until i got out of college. We needed to find a well, and i enlisted the services of a gentleman that mentored me for 15 years. He taught me everybody i knew, and i learned a few tricks of my ownby dousing wells and seeing how they end up. You came with a wine called the devining rod, is that right . That is correct. Doing well. Let me ask you this. Who is your nondevining rod competition for this . Well, thats hard to say. Theres over 100,000 brands in the marketplace from all over the world. So in effect everybody is competition to one degree or another. What a pleasure to talk to you. Thank you for sharing with us. That was probably one of the neatest things ive seen on the show. Mark mondovi is a couser and coowner of a winery in napa valley. At the top of the show i promised to explain how the government measures inflation. Heres another promise. This is way more interesting and important. Social security payments wise with inflation, and fed chair is watching inflation to stied whether to raise interest race the. That can effect your mortgage payment to how much interest you earn or dont earn on your savings. Enough of the important stuff. The interests stuff is how the sausage is actually made. Inflation, the Consumer Price index is a measure of the change in prices of about 80,000 items in a big basket of goods and services that range from bacons to bananas and lawn care to dental care, from toys to tuition to the hotel bill. It all ends up on the lists of 28,000 urban families that keep records examined by government workers. Those workers track prices for everything from ice cream to flat screen tvs at 23,000 retailers Service Businesses and 2350d trucks and vending machines. Wonks crush the number and weigh each item according to the performance and out coming an average and that number is inplagues. This week we will have robert shiller, political scientist ian bremer and former white house economic adviser glenn hubbard. Watch real money at its regular time monday through friday right here on Al Jazeera America. Thats our show for today. Im ali velshi. Thanks for joining us. This is al jazeera. Hello, and welcome to the news hour. Here are the top stories. Turkey shoots down a syrian jet it says violated its air space. Gunmen attack a church in kenya opening fire on the congregation. At least five people are dead. This is the news from europe includes nato voices its concern over a russian troop buildup on ukraines eastern border