The Coming Great Inflation

Market Oracle ^ | 5/18/11 | Michael_J_Kosares

[Kartographer]

The table displayed immediately below is likely to surprise even our most-jaded readers. It shows the astronomical increase in cash prices for well-known food commodities over the past 12 months. With inarguable exactness, it contradicts the nearly constant prattle in the mainstream press that inflation is under control, or that it is peaking and likely to come under control sometime soon. Some items on the list have doubled -- even tripled -- in price over the past year. Others have risen at mere double-digit rates.

[Kartographer]

Cash Prices Food Commodities

(Prices for actual physical commodiities, not futures)

5/11/11 Year Ago Change

Grains and feeds

Barley, top-quality Mnpls; $ per 6.2 3.15 + 96.8%

Bran, wheat middlings, Kn. City; $ per ton 178 43 +314.0%

Corn, No. 2 yellow. Cent. Ill. 6.605 3.48 +89.8%

Corn gluten feed, Midwest, ton 150.42 51.59 +191.6%

Cottonseed meal, ton 268 175 +53.1%

Hominy feed, Cent. Ill. Ton 205 77 +166.2%

Meat-bonemeal, 50% pro Mnpls ton 440 280 +57.1%

Oats, No. 2 milling, Mnpls; $ per 3.42 1.955 +74.9%

Sorghum, (Milo) No. 2 Gulf cwt 11.275 6.76 +66.8%

Soybean Meal, Cent. Ill., rail, ton 48% 335.6 291.9 +15.0%

Soybeans, No. 1 yellow Illinois 13.14 9.37 +40.2%

Wheat, Spring 14%-pro Mnpls; $ 9 4.4225 +103.5%

Wheat, No. 2 soft red, St.Louis, shel 7.72 4.81 +60.5%

Wheat, hard, KC 7.575 4.025 +88.2%

Wheat, No. 1 soft white, del Portland, Ore 12.1025 6.2825 +92.6%



Foods

Beef choice 1-3,600-900 lbs. 166.68 154.05 +8.2%

Beef select 1-3,600-900 lbs. 160.27 150.17 +6.7%

Broilers, dressed 'A'; per lb. 0.865 0.865 0.0%

Broilers, 12-city comp weighted avg 0.8458 0.8527 -0.8%

Butter, AA Chicago, lb. 2.05 1.605 +27.7%

Cheddar cheese, barrels, Chicago lb. 165.25 140.75 +17.4%

Milk, Nonfat dry, Chicago 164 130 +26.2%

Cocoa, Ivory Coast, $ per metric ton 3637 3566 +2.0%

Coffee, Brazilian, Comp. 2.7637 1.2962 +113.2%

Coffee, Colombian, NY lb. 3.0974 2.0139 +53.8%

Eggs, large white, Chicago dozen 0.885 0.595 +48.7%

Flour, hard winter Kansas City cwt 22.55 13.7 +64.6%

Hogs, Iowa-South Minnesota avg. cwt 88.04 82.49 +6.7%

Pork loins, 13-19 lbs, Mid-US lb 1.415 1.54 -8.1%

Steers, feeder, Oklahoma City, avg cwt 142.13 128.19 +10.9%

Sugar, cane, raw, world, lb. fob 26.31 19.54 +34.6%

[subterfuge]

Cash Prices Food Commodities

(Prices for actual physical commodiities, not futures)

5/11/11 Year Ago Change

Grains and feeds

Barley, + 96.8%

Bran, +314.0%

Corn, +89.8%

Corn gluten feed +191.6%

Cottonseed meal +53.1%

Hominy feed, +166.2%

Meat-bonemeal +57.1%

Oats, +74.9%

Sorghum +66.8%

Soybean Meal, +15.0%

Soybeans, +40.2%

Wheat, +103.5%

Wheat, +60.5%

Wheat, hard +88.2%

Wheat, No. 1 soft white, +92.6%

Foods

Beef choice 1-3,600-900 lbs. +8.2%

Beef select 1-3,600-900 lbs. +6.7%

Butter, +27.7%

Cheddar cheese, barrels +17.4%

Milk +26.2%

Cocoa +2.0%

Coffee +113.2%

Coffee +53.8%

Eggs +48.7%

Flour +64.6%

Hogs +6.7%

Steers +10.9%

Sugar +34.6%

[EyeGuy]

All I know, is the enormous, longstanding US debt has got to come home to roost some day, and that day is soon approaching, with the Communist, Imbecile In Chief in charge.

Like this article, my moderate understanding of economics points to raging inflation.

However, some here on FR argue that we are instead headed for a great Deflation.

[OB1kNOb]

It’s here and it’s gonna get worse as long as Bernanke heads the Fed because there is no way he will ever allow deflation. He’s said it time and again that he will do whatever it takes to prevent deflation, and I believe he is willing to go so far as to inflate the money supply to such a magnitude that it ends up causing hyperinflation and a total collapse of the dollar to prove his point. It’s not unlike trying to stop someone from burning to death by drowning them.

[JDW11235]

Don’t worry about the deflation/inflation argument. There isn’t deflation. They mostly point to real estate, which is still coming out of it’s bubble, and needs to fall another 30% at least, thank goodness. The dollar is being devalued, and there’s more of it, by all accounts, it’s inflation. The fact is that the U.S. has needed to be awoken for some time. Nearly one in 5 people are on food stamps. 1 in 10 are on Unemployment (Although the Unemployment rate if measured as it was during the great depression, would be about the same).

Unless the U.S. becomes productive, and throws off the regulations foisted upon us, through...reform, then we cannot compete. But the U.S. overall, has enjoyed a standard of living far exceeding it’s means on the backs of foreign labor. That will quickly and abruptly come to an end, with a sudden halt, I expect in the next year or so. And it’s going to be extremely difficult, and extremely good for the American people. You can’t live off the backs of others, neither domestically nor internationally. It’s time we see to our own problems, and not the world’s.

[OB1kNOb]

I’m surprised to see cocoa with only a 2% increase. I thought I had read recently where there was a shortage of cocoa expected to happen. Maybe I’m thinking of something else.

[JDW11235]

“It’s here and it’s gonna get worse as long as Bernanke heads the Fed because there is no way he will ever allow deflation. He’s said it time and again that he will do whatever it takes to prevent deflation, and I believe he is willing to go so far as to inflate the money supply to such a magnitude that it ends up causing hyperinflation and a total collapse of the dollar to prove his point. It’s not unlike trying to stop someone from burning to death by drowning them.”

That’s because deflation would benefit the savers. Whereas hyperinflation allows the elite to snap up goods as people sell them in an effort to pay their bills. There is a reason commodities are skyrocketing, year over year. Once no one has any money, if not prepared prior, they have no buffer and are at the whim of whichever person (in this case government), to whom they are indebted.

[JDW11235]

No, you’re thinking of cocoa. There is a mini civial war in a cocoa producing region. Also, for a short time, the leader (I think the ousted one), cut off cocoa exports to rob the new leader of military funds. Also, there is a problem with the aging trees and a lot of the youths want to move to cities and not farm (Cocoa is farmed on small—5 acre or so—farms, because the harvesting process has to be done hand, and the final processing as well). It’s surprising, but not a lot, to me. I haven’t bought much chocolate for some years. I bet a lot of others haven’t either.

[agere_contra]

Thanks for posting this.

Inflation in foodstuffs, staples and energy is real - but these are almost completely hidden by the mendacious workings of the CPI.

We are currently in the midst of a currency crisis: this crisis is going to get much, much worse. Those who do not want to be wiped out by the coming dollar devaluation must buy hard assets and real money before it is too late.

Here is a photo of some real money (taken from my private hoard). Because it is real money it has kept pace with the rise in foodstuffs and energy, whereas the fiat currency in my wallet hasn't.

[arthurus]

Coming? Great inflations do not start off with a bang. The money isn’t flat one day then losing its value by half the next day. It is like a heavy train with a slow steady acceleration on a curve that rises steeper and steeper. With a current actual rate north of 10% I would say that it has been underway for some time, actually since GWB officially kicked it off early in his term when he announced “devaluatiin.”.

[familyop]

"...it contradicts the nearly constant prattle in the mainstream press that inflation is under control, or that it is peaking and likely to come under control sometime soon."

That's because our "developing," manufacturing trading partners need to continually increase their consumption of commodities for production and consumers. They are trading for natural resources around the world and have a long way to grow.

Oh...my tagline. I saw someone else's tagline that read, "Shut up, and eat your beans!" ...couldn't resist.

[blam]

On the other hand:

INFLATION? Just Look At All The Deflation All Around You

[phockthis]

sfl