Monday, September 17, 2012

Inflation news round-up

News round-up now that QE Infinity is baked in:

"The difference between yields on 10-year notes and same- maturity Treasury Inflation Protected Securities, an indicator of trader expectations for consumer prices over the life of the debt, widened to as much as 2.54 percentage points. It was the most in 16 months and compares with the average of 2.16 percentage points over the past decade. The Fed said yesterday it will purchase $40 billion of mortgage debt a month."

$40B per month is $130 per capita ($1,550 per year). That's the average buying power the dollar will lose if Ben's action goes as planned. The median would be much lower though because happily the QE events favor the top 5%. Doesn't that make you feel better?

What QE Inifinity may mean for commodities and agriculturals:

"The US open ended QE policy is exporting inflation, and therefore misery to many impoverished parts of the world. Will the continued instability in the area rapidly lead to even larger major military conflicts which we can already ill afford, not to mention the ominous oil price spike that would ensue?"

Hilarious, the US #1 export is now inflation...  Bring on the global misery! Maybe more Middle East unrest even (and how much longer will they blame this on a movie?)

Are we already seeing inflation warning signs, before QE infinity has even begun?

"Newly released figures from the Bureau of Labor Statistics show that the CPI (Consumer Price Index) in all categories rose 0.6 percent in August 2012. This is the biggest monthly rise since June of 2009. Most of the increase was due to a rise in gasoline prices. Gasoline rose a full nine percent over July, as unrest in the Middle East continues to thrive. Food prices also rose slightly, up 0.2 percent. Since August of 2011, the CPI has risen 1.7 percent"

Real wages are down 0.7% in 2012 and the CPI is up 1.7% (from August 2011), so that's 2.4% more of your household budget that goes to buy absolutely nothing more than you bought one year ago. But don't worry, because that includes volatile food and gas prices, and we all know only crazy folks engage in weird, fringe activities like eating... and buying gas... Which is certainly not a concern for Uncle Ben's Bankerz crew...

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