I live in the USA and I am concerned about the future. I created this blog to share my thoughts on the economy and anything else that might catch my attention.
I'll say something is wrong. Could be that two of the worlds largest economies (USA & China) have dubious monetary policies.
China can ease their own food inflation problem by allowing their currency to strengthen. It would make food and energy more affordable in Yuan terms.
Also, if Bernanke raised rates, it would help alleviate the food & energy inflation here as well as around the world. Right now, negative real interest rates are causing things to go haywire. Hoarding is a rational response.
Bailing out the credit markets is certainly NOT free. And I still think all that money coming disconnected from housing and other over-valued assets is CPI inflationary.
I seem to be missing a bomb shelter for what it is worth. I was actually doing what you said.
MAB,
What's the shelf life on Hamburger Helper anyway?
I've been giving more thought to the miracle that is Hamburger Helper pricing. I cooked a box of Potatoes Stroganoff last night. The nearly 2 cups of milk it required made me think that some of the boxes (ones with creamy sauces requiring milk) should have economic warning labels on them.
Economics has a way of imposing reality on consumers, governments & central banks. It just takes time.
The latest wall street tripe is that food & commodity inflation is due to soaring demand. No mention of the true reason - negative real interest rates and excessive money creation. I'm supposed to believe that the demand for food suddenly soared in the last year? It's the same wall street nitwits who claimed that the demand for housing was economically based.
Why the subterfuge from wall street? Higher CPI inflation means higher interest rates and lower stock & bond prices. Wall street doesn't fear a Minsky Moment. Wall street fears a "Volcker Moment." Tight monetary policy would be helpful to the middle class, but devastating to the bloated financial community.
Check out #5 on the list. Sigh. Heavy sarcasm met up with cold hard reality it seems.
I'm a bit disappointed in firewood though. I expected better. A 12% return in the last year seems paltry compared to the ~1.2% yield on three month treasury bills (consider this to be bonus sarcasm).
Firewood prices up http://www.tribunechronicle.com/page/content.detail/id/504112.html
“We’ve seen about a 12 percent increase over last year,” said Tim Leyden, owner of Austin Tree and Turf in Canfield.
Emphasis added.
Leyden is a tree doctor who also sells cords of wood to clients who use the hardwood for heating their homes. His price for his now sold-out inventory was $120 per cord this year, he said. The price of a cord is being affected by the price of gasoline and varies from market to market.
Funny. I originally thought the price of firewood would be affected by cash injections. It turns out I was wrong. Gasoline is the culprit. Why couldn't I see the obvious?
Okay, the sarcasm is clearly getting out of hand now. I should probably stop.
I crack me up sometimes. Then I cry. Such is life.
Maybe Bernanke can drop this stuff from helicopters.
Lots of free recipes on the Uncle Ben site too. I just read that John McCain & his wife are very fond internet recipes. Feel free to claim them as your own.
I used to really enjoy Uncle Ben (the rice, not sure about the central banker yet). Unfortunately, my local Costco stopped carrying it a few years ago and there was no way I was going to pay supermarket prices for tiny boxes (especially once Costco spoiled me).
Now I really enjoy basmati rice. It may not be better on its own but it sure works well with sauces.
I bake a few chicken breasts in half a bottle of Soy Vay Veri Veri Teryaki (totally addicted to that particular sauce) and mix it in with some cooked stir fry veggies and rice. Yum! It also freezes well.
The sauce is a bit pricey but oh my is it worth it. We bought a bunch of bottles during a massive sale at a local drug store about a year ago if memory serves and we're still working through that inventory.
I salivate just looking at the bottle these days. It must be packed with nicotine or an addictive mystery substance that has presumably fallen from outer space, lol.
It didn't look contained last August and it doesn't look like the eigth inning now either.
I think there are at least two ways we could easily be in the eighth inning.
I believe we are about a third of the way through it, at best. If I'm right, the game just needs to last about 25 innings. It wouldn't be unprecedented.
Of course, there's another way we could be in the eighth inning. Our [sales] pitcher might be [throwing] underhanded and our outsourcing (oops, I meant outfielding) might stink.
That would imply we'll be stuck in the eighth inning for a very LONG time.
Hey, just trying to understand the optimistic case. That's all.
If Americans are hoarding food, that's actually a conservative investment strategy (matching present assets to future liabilities).
ReplyDeletePossibly a pleasant change.
-jus me
Stag,
ReplyDeleteI'll say something is wrong. Could be that two of the worlds largest economies (USA & China) have dubious monetary policies.
China can ease their own food inflation problem by allowing their currency to strengthen. It would make food and energy more affordable in Yuan terms.
Also, if Bernanke raised rates, it would help alleviate the food & energy inflation here as well as around the world. Right now, negative real interest rates are causing things to go haywire. Hoarding is a rational response.
Bailing out the credit markets is certainly NOT free. And I still think all that money coming disconnected from housing and other over-valued assets is CPI inflationary.
What's the shelf life on Hamburger Helper anyway?
jus me,
ReplyDeleteDouglas A. McIntyre is under the impression it is "the same shoppers who are building bomb shelters."
http://www.247wallst.com/2008/04/costco-cost-as.html
I seem to be missing a bomb shelter for what it is worth. I was actually doing what you said.
MAB,
What's the shelf life on Hamburger Helper anyway?
I've been giving more thought to the miracle that is Hamburger Helper pricing. I cooked a box of Potatoes Stroganoff last night. The nearly 2 cups of milk it required made me think that some of the boxes (ones with creamy sauces requiring milk) should have economic warning labels on them.
Stag,
ReplyDeleteEconomics has a way of imposing reality on consumers, governments & central banks. It just takes time.
The latest wall street tripe is that food & commodity inflation is due to soaring demand. No mention of the true reason - negative real interest rates and excessive money creation. I'm supposed to believe that the demand for food suddenly soared in the last year? It's the same wall street nitwits who claimed that the demand for housing was economically based.
Why the subterfuge from wall street? Higher CPI inflation means higher interest rates and lower stock & bond prices. Wall street doesn't fear a Minsky Moment. Wall street fears a "Volcker Moment." Tight monetary policy would be helpful to the middle class, but devastating to the bloated financial community.
MAB,
ReplyDeleteYou inspired me to find some of my early economic sarcasm from 2005 (back before I had a blog to properly vent it).
Re: This idiot thinks that Ben B is bad
http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_N/threadview?bn=12434&tid=602027&mid=602143
His academic theory that simply injecting cash will force consumers to spend is right on the money in my opinion.
Here's a sampling of what the consumer may be buying to preserve wealth...
1. Gold
2. Silver
3. Firewood
4. Canned Goods
5. Bulk Rice
6. Bulk Beans
7. Water
8. Warm Clothing/Blankets
9. Survival Gear
10. Ammunition
Get ready for a "strong" helicopter economy. Doh!
Check out #5 on the list. Sigh. Heavy sarcasm met up with cold hard reality it seems.
I'm a bit disappointed in firewood though. I expected better. A 12% return in the last year seems paltry compared to the ~1.2% yield on three month treasury bills (consider this to be bonus sarcasm).
Firewood prices up
http://www.tribunechronicle.com/page/content.detail/id/504112.html
“We’ve seen about a 12 percent increase over last year,” said Tim Leyden, owner of Austin Tree and Turf in Canfield.
Emphasis added.
Leyden is a tree doctor who also sells cords of wood to clients who use the hardwood for heating their homes. His price for his now sold-out inventory was $120 per cord this year, he said. The price of a cord is being affected by the price of gasoline and varies from market to market.
Funny. I originally thought the price of firewood would be affected by cash injections. It turns out I was wrong. Gasoline is the culprit. Why couldn't I see the obvious?
Okay, the sarcasm is clearly getting out of hand now. I should probably stop.
I crack me up sometimes. Then I cry. Such is life.
Stag,
ReplyDeletehttp://www.unclebens.com/rice/
Maybe Bernanke can drop this stuff from helicopters.
Lots of free recipes on the Uncle Ben site too. I just read that John McCain & his wife are very fond internet recipes. Feel free to claim them as your own.
Are there any honest politicians?
MAB,
ReplyDeleteI used to really enjoy Uncle Ben (the rice, not sure about the central banker yet). Unfortunately, my local Costco stopped carrying it a few years ago and there was no way I was going to pay supermarket prices for tiny boxes (especially once Costco spoiled me).
Now I really enjoy basmati rice. It may not be better on its own but it sure works well with sauces.
I bake a few chicken breasts in half a bottle of Soy Vay Veri Veri Teryaki (totally addicted to that particular sauce) and mix it in with some cooked stir fry veggies and rice. Yum! It also freezes well.
The sauce is a bit pricey but oh my is it worth it. We bought a bunch of bottles during a massive sale at a local drug store about a year ago if memory serves and we're still working through that inventory.
http://www.soyvay.com/index.php?main_page=page&id=23&chapter=0#veri
I salivate just looking at the bottle these days. It must be packed with nicotine or an addictive mystery substance that has presumably fallen from outer space, lol.
Stag,
ReplyDeletehttp://illusionofprosperity.blogspot.com/2007/12/inflation-vs-unemployment-v4.html
That's a convincing correlation. Bernanke is clearly bailing out banks at the expense OF stable prices AND employment.
We've had way to much non-economic output. It didn't look contained last August and it doesn't look like the eigth inning now either.
MAB,
ReplyDeleteIt didn't look contained last August and it doesn't look like the eigth inning now either.
I think there are at least two ways we could easily be in the eighth inning.
I believe we are about a third of the way through it, at best. If I'm right, the game just needs to last about 25 innings. It wouldn't be unprecedented.
http://www.baseball-almanac.com/box-scores/boxscore.php?boxid=198405080CHA
Of course, there's another way we could be in the eighth inning. Our [sales] pitcher might be [throwing] underhanded and our outsourcing (oops, I meant outfielding) might stink.
That would imply we'll be stuck in the eighth inning for a very LONG time.
Hey, just trying to understand the optimistic case. That's all.