COMMODITIES YTD
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| Last | YTD % Change | |
| Milk | 17.05 | 24.27% |
| Feeder Cattle | 150.275 | 21.24% |
| Gas Oil | 921.25 | 19.95% |
| Brent Crude Oil | 109.27 | 15.32% |
| Heating Oil | 2.9085 | 14.40% |
| Live Cattle | 123.2 | 13.71% |
| Gold | 1595.5 | 12.25% |
| Crude Oil | 101.34 | 10.90% |
| RBOB Gasoline | 2.6888 | 10.64% |
| Lean Hogs | 85.75 | 7.52% |
Source: CNBC Analytics/Thomson Reuters
|
Peanuts in my local grocery store are up 50% currently vs. the summer. For the store brand, they are now around $3.20, and used to be $2.15. Also my favorite brand Planters stopped using glass containers. They switched to plastic, which reduces the shelf life and I can't reuse Planters bottles for storeable foods because the plastic is oxygen permeable.
ReplyDeleteYou can't just cherry pick and then call it inflation. While there are some items that have had significant price increases, there are also plenty that had significant price decreases.
ReplyDeleteAccording to the chart you listed, the price of cotton has dropped by 32% since last year. The price of rubber has dropped by 21%. The price of nickle has dropped by 21%. The price of natural gas has gone down by 12%.
This variation is why you have to look at the whole picture, not just specific items. The whole picture is that there has not been runaway inflation in the last year. The CPI for the past year is 3.5%. Core CPI is 2.2%. Most of the indexes on the chart you listed, actually have a negative change since this time last year, some substantial.
Moreover, as much as you complain about Paul Krugman's "smoothing" of inflation, you are doing the same thing, just instead of smoothing over 3-4 years, you are smoothing over one year. There was a small spike in inflation, particularly non-core inflation, in the first half of 2011. Since then inflation has come down and there have actually been a few months of deflation in non-core prices.
As I've said before, inflation simply has not been a problem.
Commodities, DBC, seen in this Finviz Screener, with the exception of oil, USO, and gold, GLD, are headed down in dollar terms, but are going to cost more more in local currency terms in 2012: SLV, UNG, DBB, JJN, JJC, JJT, CUT, LD, JJU, BAL, JJA, FUE, JO, GRU,COW, FUD, CORN, USCI, DBC.
ReplyDeleteThe currency demand curve, the ratio of small cap pure value shares, RZV, relative to small cap pure growth shares, RZG, … RZV:RZG … has been trading lower since July 2011, evidencing that competitive currency devaluation is underway. A.Trader.Mind relates The Euro Is Pulling Down All Risk Currencies. The failure of world major currencies, DBV, and the emerging market currencies, CEW, in July 2011, the rise of the US Dollar, $USD, UUP, in November 2011, means that commodities are priced in dollars are going to cost more in local currencies. This inflation is going to moderated some by as inflation destruction, stagflation, and deleveraging out of carry trade investments reduces aggregate demand.
Avoidance of the risk trade, is turning Junk Bonds, JNK, lower. The Morgan Stanley Cyclical Index, ^CYC, is trading lower. Debased currencies are unable to support risk and growth.
M3 Financial Analysis presents a chart of commodities, and the Euro. An inquiring mind asks will a continuing falling Euro, FXE, pull commodities, DBC, lower? And an inquiring mind asks will continuing falling Commodity Currencies, CCX, pull Commodities, DBC, lower? The chart of Commodities relative to Commodity Currencies, … DBC:CCX … shows an Elliott Wave 2 up, and ready to enter an Elliott Wave 3 Down. All currencies are falling lower into the pit of financial abandon together, and will be deleveraging commodities lower. Unfortunately, people will be INCREASINGLY be able to afford less commodities with their cheapend currencies.