"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Thursday, March 17, 2011

Even the Government's Phony CPI can no longer hide Rising Prices

The Labor Department released its CPI numbers for the month of February this morning. Guess what? Even the statistical gymnastics employed by these masters of illusion could not conceal what has been happening to food prices since the middle of last year. Ask any average US housewife and you would have already known this long before the CPI revealed it but the doubling of grain prices, the surge in wholesale beef and pork costs, rising prices for cotton, etc, were bound to show up sooner or later at the retail level.

As said many times here, a business can only absorb rising wholesale costs for so long. If it wants to remain in business, it must eventually pass these increases on to consumers, especially if it intends to actually increase its hiring.

While some food costs are coming down on the futures markets due to events in Japan and the exodus of a significant amount of speculative demand, it is reasonably sure that as long as the QE comes from the Fed and now more than likely from Japan, inflation in food and energy prices is not going to go away anytime soon.

Consider also the fact that the US Dollar continues to fall on the foreign exchange markets. This is going to have the effect of making imported goods more expensive for American consumers.

Consumer prices rise 0.5 pct., most since June '09

Higher gas and food costs push up consumer prices up 0.5 pct., most in nearly 2 years
On Thursday March 17, 2011, 11:04 am EDT
WASHINGTON (AP) -- Americans paid more for food and gas in February, driving up consumer prices at the fastest pace in nearly two years.
The Consumer Price Index rose 0.5 percent in February, the largest increase since June 2009, the Labor Department said Thursday. Core prices, which exclude food and energy, rose only 0.2 percent, matching January's gain.



  1. Everything from cotton to cocoa is up big today (limit up in many cases), so why are gold and silver the only things that are down?!

  2. Harry,

    One word--MANIPULATION-this is from Turds blog--
    If I had told you 18 hours ago that the grains would be nearly limit UP, that copper would be up 15 points and crude would be back to $101.50, what would you have guessed gold would be trading at? $1420? $1430? How about silver? $36? $37? Nah!!! Not the most manipulated, bullshit "markets" on the face of the planet! They're not UP! Of course not! In fact, silver is actually down on the day! What a joke...

    I agree 100%--I do believe that they are now up a little--

  3. One reason copper may be up and silver/gold are still riding in the back seat....coincidence....I think not


  4. Looking for guidance from some of you commodity and trading/investing experts:

    In my thinking (when I’m not thinking about all things pm related), at some point we will see the largest, international food/packaged goods companies begin to leave their smaller competitors in the dust.

    The largest companies with established brands, deeper pockets and global distribution can withstand margin squeezes and losses from rising commodity costs much longer than their competitors. Due to this, they will take market share. The big get bigger, the mids fail or get bought and the small will go away. The mid and small US brands will become distant memories.

    I'm thinking it will soon be time to think very big (like PG, Hershey's, etc) and micro brands (specialty, regional niche) in terms of companies to invest in. The small and mid-sized guys won't be able to withstand the overhead, ingredient costs and revenue shocks.

    May as well invest in some of these and get paid to eat.

    Any thoughts?


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