Paging Paul Krugman: NYC Metrocards Will Climb by 16.8%

NYC monthly metrocards will climb from $89 to $104 Dec 30th.

People should walk anyway, right Paul?

Paging Paul Krugman: Copy Paper Up 40%

As of July 24, 2009, minimum wage in the United States was $7.25/hour (before taxes). At the beginning of 2010, minimum wage barely bought you a pre-tax $6.79 ream (500 sheets) of paper at Office Depot. By the end of 2010, that cost had skyrocketed to $9.49 per ream, nearly a 40% increase, writes Janet Tavakoli.

Paul, there's deflation in this price increase, somewhere? Right? Paul?

Paging Paul Krugman: Even BI Spots Inflation

Hi Paul,

Will you and Bernanke be the last deflationists standing? Business Insider which houses the reformed Gold Hater now reports inflation trends:

"Inflation is definitely real." Business Insider's Dashiell Bennett just walked into the office and reported that the price of a muffin has been raised from $1.95 to $2.25 at the deli across the street.

Paging Paul Krugman: Inflation above Keynesian Expectations

November  PPI rose .8% for composite and .3% for  Nixon designed core, both above Keynesian economist expectations of .6% and .2% respectively.

The headline gain was due to a 4.7% rise in gasoline, a 1% gain in food and a 1.7% jump in passenger car prices. The passenger car jump comes after a hocus pocus hedonic downward adjustment in October to the new 2011 models.

The story is even worse at lower stages of production.

Intermediate goods prices rose 1.1% m/o/m and is now up 6.3% y/o/y. Crude goods, the 1st stage of production, saw prices rise 12.8% y/o/y.

Paul, I'm sure you can whip up some kind of deflationary explanation for all these upticks. Paul?

Paging Paul Krugman: Rent Prices Climbing

U.S.: NAR: Apartment rents set to rise, fueling inflation

VIRGINIA: Rents rise, vacancies drop for apartments in Hampton Roads

COLORADO: Apartment rents continue to rise

WASHINGTON: Seattle apartment vacancy rate drops

NEW JERSEY: Fewer apartments for rent could drive up prices at the Jersey Shore

RENTAL HOUSES: Denver metro vacancies for homes, condos to rent at lowest since 2001

Hi Paul,

I'm sure there is an easy deflationary explanation for this. Paul? Uh, Paul?

(ViaJohnLanser)

Paging Paul Krugman: Major Commodity Breakout

Silver just broke above $30.00.

West Texas Intermediate Crude Oil just broke above $90.00.

It looks we are, indeed, headed for $3.00 gasoline for Christmas.


Hey Paul,

Any charts we can take to the gas station?

UPDATE: Copper just hit new record high. Over $9,000 a ton.

Paging Paul Krugman: Gold Closes at Record High

Gold for February delivery gained $9.90, or 0.7%, to finish at $1,416.10 an ounce on the New York Mercantile Exchange, a record high. Silver surged 1.6% but stopped short of $30 an ounce close, with the March contract settling at $29.74 an ounce.

And don't, Paul, think for a minute that this is simply gold bugs rallying the precious metals. Gasoline prices may, for the first time ever, average over $3.00 per gallon at Christmas.

Paging Paul Krugman 19: The Economist Commodity-Price Index

Paul,

I'm sure there is some deflationary explanation for this. But a quick glance at the numbers for the end of November, put out by Economist magazine, shows double digit price increases across the board, on a one year basis. The only laggard is oil, and that was up 6.0% last week--so it's now in double digit territory also.

Paul? Uh Paul?

Paging Paul Krugman 18: Live Cattle Prices at 28 Month High

Live cattle futures rose to a 26-month high today.

The nearby December contract settled 0.50 cent a pound, or 0.49%, higher at $1.0357. This is the highest close since Sept. 15, 2008, when it settled at $103.75. The day's December high of $1.0365 ties the Sept. 17, 2008 high.

Paul,

This should be easy for you to explain as a sure sign of deflation. You look like a beef eater, so I'm sure you can swat this price climb away from personal experience, just draw a diagram on your dinner napkin.

Paging Paul Krugman 17: Uranium Prices Soar

Hey Paul,

Since August uranium prices have rallied 45% to hit US$60.50 a pound by end November. What equations are you using to prove this is deflation?

Paging Paul Krugman 16: The Cost of the 12 Days of Christmas Soars

A commenter leaves this message:

Hey, Paul.

Explain this one: cost of 12 days of Christmas items are up over 10.8% from last year. http://www.blogger.com/goog_1734727694

Paging Paul Krugman 15: Joe Weisenthal Has Just Discovered Inflation

Joe Weisenthal, the former gold hater, is out with his much anticipated Chart of the Day.

He writes:

 The uber-popular SPDR Gold Shares ETF "GLD" is the subject of a long and fascinating profile in the WSJ titled: How A Fund Helped Make Gold Prices Glitter.

The gist is that in 2004, gold was a dreary, forgotten asset and so the gold industry got together and democratized gold by creating an ETF that tracked the commodity and that since then there's been this huge boom.

Now it is true that the ETF is now one of the biggest holders of gold in the world, and it is true also that gold has boomed since the launch of the ETF, but are the two related in any way?

The evidence is not clear.

As a test, we checked out gold in relation to copper and oil, two commodities that NOBODY thinks are strongly influenced by ETFs. What we see is two things: One is that the gold/copper and gold/oil ratios stayed pretty low for quite some time after the creation of the ETF, even as the ETF grew 10x in the amount of gold it held (it went from holding $1 billion worth of gold to $10 billion after two years, according to WSJ). And even now, with gold near record highs, the ratios are firmly in line with historical norms.

Paul, you have just lost a major ally. What Joe has discovered, although I am not sure he is completely aware of it, is that inflation is in full bloom at the commodity level.

Not only is gold going up in price, but copper and oil are keeping pace. In other words, Paul, the former gold-hater is getting very close to becoming a full fledged member of the inflation camp.

Before, long it may be just you and your Princeton buddy, Ben Bernanke that think deflation is a real threat.

Joe's accompanying chart is here.

Paging Paul Krugman 12: Stealth Price Increases?

EPJ's very own Taylor Conant reports:

Thought you may be interested to know I'm on a flight from atl back to dfw and noticed my minute maid aluminum can is 11.5 fl oz. Last time I had checked, 12 fl oz was a standard can. I can't see any of the other passenger's cans to see if they're all smaller and I'm not sure if this is specific to airtran but could be an example of producers shrinking their products to maintain prices, "stealth price increases" as you've mentioned before. Depends upon whether this is widespread or not.

Paul, any thoughts on this? How much liquid does you diet Coke can hold?  You would have caught this stealth price increase in your equations, right? Paul?

Paging Paul Krugman 11: A Report on the Price of a 6-Pack

Hey Paul,

The Clydesdales are hauling price climbing brewskis. I'm sure there is a chart that explains the deflationary aspect of this.

James E. Miller from Middletown, Pennsylvania reports:

Being home from college, I just drove by my favorite pizza place to buy beer and saw they have increased the price of a 6-pack of 16 oz. cans of Budweiser and Bud Light from $5.99 to $6.75. 

Paging Paul Krugman 10: Oil Soars

Crude for January delivery advanced $2.61, or 3.2%, to $83.86 a barrel on the New York Mercantile Exchange on Wednesday.

Paging Paul Krugman 9: CME Reports Major Increases in Trading Volume

The CME thumbs:

November volume to date is now 13,978,100 contracts per day [in the metals complex], up 29% over November last year.

Hey Paul, don't you econometricians consider this a likely sign of increasing money velocity? Isn't that inflationary?

Paging Paul Krugman 8: SoCal Rents Up at Fastest Pace in 14 Months

Lansner on Real Estate writes:

Southern California rents rose 0.5% in October vs. a year ago, according to the region’s Consumer Price Index. And while that’s a modest hike, it is the largest jump in 14 months and another hint that local landlords are regaining pricing power in the rental market.

Given the housing availablity in Southern California, any uptick in prices is pretty remarkable. Money is starting to seep out.

Paging Paul Krugman 7: Diamond Sells for $47 Million

I'm sure Paul "I'm worried about deflation" Krugman will have no trouble explaining away this record breaking price, as another sign of deflation.
At auction, Sotheby's just sold by far the most expensive diamond ever. The rare pink diamond sold for $46,158,674 at a Swiss auction, according to the AP.

London jeweler Laurence Graff bought the 24.78-carat "fancy intense pink" diamond and immediately named it "The Graff Pink."

Graff bought the last record-setting stone back in 2008 for $24.3 million -- approximately half as much.

Gus Lubin, who wrote the story up for Business Insider, obviously doesn't have the fine nose for deflation that Krugman does. Lubin concluded his story:

You don't have to be an economist to see there's some inflation going on here.

Ahh, but Gus, if you were a Nobel Prize winning economist writing for the NYT, you would easily realize this is a sign of deflation.

Paging Paul Krugman 6: Starbucks Coffee Prices Up Big, Overnight

Jim Meers emails:

In Boise, Idaho, the price for a cup vente brew coffee at Starbucks is up this morning  by 7.5%  from $2.12 yesterday to $2.28 today.

Update: He further writes:

All coffee products were increased, but I only know the increase for brewed coffee.

Paging Paul Krugman 5: `Terrifying' Cotton Prices

Gap Inc., J.C. Penney Co. and other U.S. retailers may have to pay Chinese suppliers as much as 30 percent more for clothes as surging cotton prices boost costs, reports Bloomberg.

“It’s a little terrifying to deal with cotton suppliers now,” said Vicky Wu, a sales manager at Suzhou Unitedtex Enterprise Ltd., a closely held, Jiangsu province-based clothes maker that counts Gap and J.C. Penney among its clients.

Cotton futures in China have surged more than 70 percent this year and were at a record earlier as the global economy emerged from recession.

“American consumers better get used to rising prices on the shelves of Wal-Mart and other retailers,” said Jessica Lo, Shanghai-based managing director at China Market Research Group. “China’s manufacturers are getting squeezed not only by rising cotton costs but also soaring real estate and labor costs.”

Shandong Zaozhuang Tianlong Knitting Co., which makes Polo Ralph Lauren Corp. T-shirts and track suits for Le Coq Sportif Holding SA, has raised prices as much as 70 percent from a year earlier, said sales manager Fred Hu. “If cotton keeps rising like this, we will need to lift prices by 30 percent by the Spring Festival next year or we lose money.”

Closely held Tianlong ships 80 million yuan of clothes to Europe, North America and Japan annually, and raised the price of T-shirts it sells to Ralph Lauren to $4 each, from $3.20 in July, he said.

Unitedtex, which sells $24 million worth of shirts and jackets annually to Gap, plans to raise prices by 5 percent to 30 percent for products that will be available in April, Wu said in an interview.

Bloomberg's full report is here.

What chart will "Deflation" Paul use to explain all this away?