Ignoramus27079 writes:
Outside of food and fuel products, prices
climbed 2.4 percent, above the Federal Reserve Ts preferred ceiling
of 2 percent.''
We are in a huge deflation. The CPI and other "inflation" indexes are
political inventions with little attachment to reality in sign,
magnitude, or timing.
Trillions and trillions in bubbled debt and stock market valuation,
which was money or its liquid equivalent in the minds of its owners, has
literally disappeared. The money supply has shrunk by an enormous
proportion, beyond any government ability to counteract. Market prices
a few months ago were based on paying with paper pyramid assets that
have vanished.
Petroleum is a very sensitive commodity to such conditions. One day it
is buried in the Arabian sands, a few weeks later it is sloshing in your
automobile tank. It is also a monetary vehicle as a financial
commodity, so its price also reflects its usage as a short-term money
substitute/equivalent. That's why prices have fallen by half from the
summer, as I predicted, reflecting the current massive money supply
deflation.
Groceries are not sensitive, they lag by months. Between producers,
wholesalers, and retailers, groceries are still priced from last
summer's conditions, as if gasoline were still $4.50/gallon.
A lot of retail stainless products are selling as if nickel were still
$25/lb, which is a pointless price lag. Look at the 5-year chart here;
it sums up the old bubble and the current deflation quite graphically:
http://www.kitcometals.com/charts/ni...istorical.html