MV Weather Report: Chicago PMI Freezes the Bulls
“Once again, take a whiff of the stagflation sandwich that is the September Chicago PMI. The headline index fell to 46.1 from 50 in the prior month, indicating that the Chicago manufacturing sector is once again in contraction after its brief breath of fresh air in August. Meanwhile, the prices paid indicator rose to 51.3 from 50.
“Let’s see… economic stagnation + inflation thanks to the Fed’s money printing… hmmm… what’s that called?
“I don’t know how many stagflationary data points like this we need to get before the market “gets it,” but when they finally do, gold is going to explode.”
Gold has exploded. It's four times more expensive than it was just a decade ago. If stagflation does appear in a major way, here are a few alternative suggestions.
Producer Price Index News Release
Scan down to "Table 2. Producer price indexes and percent changes for selected commodity groupings by stage of processing" and check out the finished goods section. On average, they are down 4.3% since this time last year.
There are a few exceptions to the rule though.
Sanitary paper products: Up 3.7%
Soaps and synthetic detergents: Up 6.0%
I'm a toilet paper hoarder. Dishwashing detergent and laundry detergent are also things I have stocked up on. I'm very thankful I stocked up on dishwashing detergent by the way. Costco apparently no longer sells the 20 pound tubs of powder any longer. It no doubt has something to do with Washington State's recent ban on phosphates (by 2010).
US credit shrinks at Great Depression rate prompting fears of double-dip recession
Both bank credit and the M3 money supply in the United States have been contracting at rates comparable to the onset of the Great Depression since early summer, raising fears of a double-dip recession in 2010 and a slide into debt-deflation.
That's a whiff of the deflation sandwich but as seen in the comment section...
I'm moving dollars into commodities. A years supply of Toilet paper, soap, food, motor oil. Buying guns, bullets, gold, silver, planting a garden....hey, they laughed at Noah too...... - Fil R
It isn't so much what he's planning to hoard, but his priorities. Note that toilet paper was mentioned first. Just a year's supply though? He's taking Noah too literally. Once it starts raining this time it may never stop. Sigh.
Mark,
ReplyDeleteDo you know if toilet paper is like acid paper or is it more the cotton type? I would hate to have a garage full of paper only to watch it yellow and crack (pun intended) making it less than usable. I am long cotton fiber toilet paper makers by the way of full dislcosure.
GYSC,
ReplyDeleteThat's a great question and something I ask myself. How long can I expect toilet paper to last?
I'll be able to tell you for sure within 7 years (my current supply). Your question does cross my mind from time to time and does put a limit on how much I am willing to hoard. I can say that I'm currently working through toilet paper that is well over a year old and I see no signs of any deterioration whatsoever (Marathon Brand at Costco).
I've had rolls of paper towel in my garage that were good for close to 5 years I'm guessing. Just sitting there outside of their plastic protective cover and fully exposed to the air (but not exposed to direct sunlight).
The toilet paper I have is kept within the house (better conditions than the garage) and sheltered from direct sunlight (sunlight should dramatically reduce its lifespan). Further, each roll is individually wrapped in paper and those rolls are wrapped within protective plastic packaging. That's decent protection against air.
I would think 10 years would be fairly safe, but I don't have proof of course. If I knew for sure, I'd be willing to hoard even more of it.
http://www.tagyerit.com/curiosities.htm
"Extremely rare patented June 6, 1893 Springfield Oval Toilet Paper, manufactured by Morgan Paper Company Div., United States Envelope Co., Lititz, Pa. Never used with original label, graphic of how it was to be put onto the metal wall hanger. 41/8x61/4", some wear and creases on side of label, overall excellent condition."
http://www.howstuffworks.com/question463.htm
"Lignin eventually turns paper yellow because of oxidation. That is, the lignin molecules, when exposed to oxygen in the air, begin to change and become less stable. The lignin will absorb more light, giving off a darker color. Chang says that if newsprint were kept completely out of sunlight and air, it would remain white. After only a few hours of sunlight and oxygen, however, it will start to change color."
Keep toilet paper dry. Keep it out of sunlight. Keep it protected from drafts as best you can. Should last a LONG time, at least in theory.
Mark,
ReplyDeleteironic that sunlight destroys the toilet paper, yet we are inundated with sunlight from the FED's behind as to how great they have fixed everything? Everything is related I guess.
GYSC,
ReplyDeleteToilet Paper As an Economic Indicator
http://totalcandor.com/blog/2008/11/toilet-paper-as-an-economic-indicator/
"I say this because the shelf life of toilet paper approaches infinity. Unlike the strawberries I bought just three days ago, toilet paper never goes bad unexpectedly. And, unless there are some serious medical issues, you are pretty much eventually going to use all the toilet paper you purchase.
Since, when you buy toilet paper in bulk, you pay less per roll, it’s better to buy large quantities of toilet paper.
Yet when you get to the store and you don’t have the $3.99 for the 24-pack only have $0.99 for the 4-pack, you pay more per roll. You can’t wait until tomorrow for payday to get the more cost-effective 24-pack. You’ve got to go today."
It takes money to make money used to be the rule. Now it takes money to save money.