Now that this is behind us, gasoline has been on a tear higher, along with crude oil I might add. You no doubt have noticed the increase at the pump already. Rising energy prices are something that cannot be long overlooked by those scanning the horizon for signs of inflationary pressures. I mentioned yesterday that heretofore, gold has ignored the strength in crude and the rise in distillates. That may be getting harder for it to do if this strength continues.
Remember, at some point, because of the pervasive impact of higher fuel/energy costs on nearly all segments of our economy, the price of transported goods must rise to reflect the higher costs for producers/manufacturers/distributors. When it does, the impact on the CPI should be seen. What is lagging right now is FOOD costs. You will recall that we have seen episodes in the recent past where both FOOD and ENERGY prices were rising in tandem. That occurence cannot be ignored.
Remember, at some point, because of the pervasive impact of higher fuel/energy costs on nearly all segments of our economy, the price of transported goods must rise to reflect the higher costs for producers/manufacturers/distributors. When it does, the impact on the CPI should be seen. What is lagging right now is FOOD costs. You will recall that we have seen episodes in the recent past where both FOOD and ENERGY prices were rising in tandem. That occurence cannot be ignored.
For now, energy is taking the lead. We'll keep a close eye on this to see if unleaded gasoline can run as high as the $3.20 level or not.
Perhaps the stubborn refusal of energy prices to break lower is one of the factors contributing to the continued weakness in the bond markets...
Those lower gasoline prices heading into the election represented just one of many fortunate circumstances that enabled the incumbent administration to maintain their positions with the Federal kleptocracy. Perhaps the Exchange Stabilization Fund played a role in manifesting those lower gasoline prices, perhaps not. We will probably never know, we can only speculate what goes on in those dark places that are funded by our tax dollars.
ReplyDeleteOn a brighter note, how about that estimate of 4Q 2012 GDP? Could that be enough of a trigger event to launch gold out of the range-bound pricing that we have been living with for the past few months? Equities (currently) are only down slightly on that great piece of economic news, but there's plenty of time left in the trading day for the financial news networks to spin it as positively bullish for stocks.
Question - if the GDP for Q3 2012 were also manipulated higher would that have contributed to the Q4 2012 being negative?
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