Inflation - It's back

[kach22i]

http://news.yahoo.com/s/ap/20051018/ap_on_bi_ge/economy;_ylt=AnA3ZqU8peBLDN0dutK6BMes0NUE;_ylu=X3o DMTA3b2NibDltBHNlYwM3MTY-

WASHINGTON - Inflation at the wholesale level last month soared by the largest amount in more than 15 years, reflecting the surge in energy prices that occurred following the Gulf Coast hurricanes..........................The price of food shot up 1.4 percent last month, reflecting a record 49.3 percent increase in egg prices. Vegetable prices rose by 16 percent, reflecting big increases for snap beans, tomatoes, cabbage, potatoes and broccoli.............................The PPI showed inflation pressures showing up at earlier stages of production. The price of intermediate goods rose by 2.5 percent, the biggest increase in 31 years, while the price of crude goods jumped 10.2 percent, the biggest increase in more than two years.

I need a plan to get me through this.

Any ideas?

[BlueSkyJaunte]

Start farming.

[dhoward]

Paid 89 cents for a dozen eggs yesterday.
Must not have hit here yet...

[Rich76_911s]

I think that inflation has been understated as of late because the way the gov't weights it. The cheapness of Computers and Cars has had a significant effect on keeping the Core CPI low. I am surprised that the PPI just now picked up with the way oil has been on a tair lately. Umm I think getting long some gold might be a trade against increased inflation but I really don't know.

[kach22i]

Originally posted by Rich76_911s
Umm I think getting long some gold might be a trade against increased inflation but I really don't know.

They keep saying land is going to pop..................no jobs, no new housing eating up farm land and driving up prices.

Things are going to get real tight in Michigan this winter...........I can just feel it.

Bush is going to make Carter look good if it goes to far. A real house of cards is in place, expect a wind.

[dhoward]

"the sky is falling"

[kach22i]

Originally posted by dhoward
"the sky is falling"

May be only over Michigan.

http://www.detnews.com/2005/business/0508/24/B01-291024.htm

Michigan's jobless rate, which at 7 percent tops the nation

I've read a few things that said it's not so bad, and that there has been lots of investment dumped into Michigan in the past 1-1/2............................this is good news for the future. Still, it's taking a lot of professionals over a year to get a new job once laid off, typically for less money.

[dhoward]

Not having that experience here right now, although unemployment could be better, things are looking up. IT jobs are popping up again. Bonus pool looks good, stock price up. Fuel prices are an issue everywhere, but I'm not holding my breath waiting for the doom predicted by the media.
They just don't have a good track record if you ask me!

[Mulhollanddose]

Inflation is a natural phenomena in a growing economy, naturally.

[kach22i]

Originally posted by dhoward
the media.
They just don't have a good track record if you ask me!

That we can agree on.

[TerryBPP]

I guess we should all start drinking the Hale Bop Kool-Aid. You first.

[dhoward]

Alan Hale
Thomas Bopp
2 p's

[ckissick]

What bad timing. Some critter just killed my last 4 chickens, so I have to buy eggs for the first time in 4 years.

[kach22i]

A fox in the hen house..........that reminds me of something.

[gaijindabe]

Bought a house lately? Could that be called inflation? Lots of inflation the past few years...

[CamB]

Originally posted by Mulhollanddose
Inflation is a natural phenomena in a growing economy, naturally.

True, when it is caused by capacity contraints and wage inflation - but in this case it is caused by high oil prices (which aren't growth) and pricing for materials to rebuild the South (which the govt is paying for to some extent, and is also not really "growth"). Unfortunately, in this case inflation not cause by growth is going to lead to lower growth:

Greenspan did not quantify how much of a slowdown will occur, but private economists are forecasting that the hit from Katrina and Rita could shave as much as a full percentage point from economic growth in the final six months of this year.

http://www.businessweek.com/ap/financialnews/D8DAEPB01.htm?campaign_id=apn_home_down&chan=db

(the yahoo link didn't work for me).

[dhoward]

Cam's expert analysis of the US always entertains me.

[turbo6bar]

Entertaining or not, cam is probably right. gaijinda, some have presented an alternative of stagflation. We could see asset deflation with higher consumer pricing. However, a deflating housing market will deal a heavy blow to the economy and may negate some of this current inflation. There are already reports of a massive drop in home equity extraction, and that is sure to slow consumer spending.

The next 2 weeks will foretell the next 6-12 months. Housing numbers are expected soon. Will the stock market rally from this recent haircut?

[fintstone]

A little inflation is good if you have tangible assets and not a lot of sideline cash...and/or all your debt is long term, fixed rate. Your salary tends to increase to match inflation, but your major bills stay the same and the value of your assets increase.

[RoninLB]

the current flat yield curve is bad.

Gold is a very good indicator of inflation.

Watch 3mo notes for interest heads up.