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As World Becomes Zimbabwefied, Cotton Futures Surge 17% In One Month

Tyler Durden's picture




 

One of the benefits of America finally seeing what Zimbabwe went through as it entered hyperinflation, ignoring for a second that the Zimbabwe stock market was the best performing market, putting Bernanke's liquidity pump to shame, is that very soon everyone will be naked, once companies finally realize they have no choice but to pass through surging input costs. And while some may be ecstatic by the S&P's modest rise YTD, it is nothing compared to what virtually every single agricultural product has done in the first month of 2011. To wit: Corn spot up 7.76%, wheat up 5.63%, Rice up 10.08%, Hogs up 10.16%, Sugar up 5.64%, Orange Juice up 3.33%, and cotton.... up 17.08%. That's in one month!

The chart below shows various commodities performance YTD. This is just the beginning. We are curious what happens when rice goes up 100% in 2011... That is only about 30 limit up sessions.

And cotton...

As a reminder, here is how the Zimbabwe stock market performed in 2008. We are heading right there.

From Businessweekly, October 22, 2008

While
markets across the world have been crashing, the Zimbabwe Stock
Exchange has being seeing record gains as citizens turn to equities to
protect their money from the country's hyperinflation.

The
benchmark Industrial Index soared 257 percent on Tuesday up from a
previous one day record of 241 percent on Monday with some companies
seeing share prices increase by up to 3,500 percent.

But
before Wall Street traders start packing their bags and heading south,
they should bear in mind that these figures are just another
representation of Zimbabwe's collapsing economy and are almost
meaningless in real terms.

Zimbabwe, once a regional breadbasket,
is staggering amid the world's worst inflation, a looming humanitarian
emergency and worsening shortages of food, gasoline and most basic
goods. Inflation is at 231 million percent, but some experts put it more
at about 20 trillion percent.

"Why leave money in the
bank?" asked Emmanuel Munyukwi, chief executive of the Zimbabwe Stock
Exchange at a seminar on the doing business in Zimbabwe on Tuesday.

"People
are forced to come on the stock market. They believe that after hard
currency, the stock market is the only viable option where you can get a
bit of a return," he said.

Zimbabwe's stock exchange,
established in 1896, is one of Africa's oldest and the fourth largest. A
securities commission has been established and it is hoping to follow
in the footsteps of other countries like its neighbor South Africa and
list as a company.

There are 19 stockbroking firms in Zimbabwe
and 90 percent of investors come from institutions, asset managers or
pension funds. About 8 percent of investors are individuals and only 2
percent are foreigners. This is in comparison to about a decade ago when
foreigners made up about 30 percent of investors.

Munyukwi
expressed his dismay at the "gross economic mismanagement" by the
Zimbabwean government which has led to the collapse of the economy,
however, the stock exchange was managing to survive despite the harsh
environment.

 

 

 

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Tue, 02/01/2011 - 13:06 | 924072 Ragnarok
Ragnarok's picture

OT: Mervyn King: The other King's speech

The Governor of the Bank of England's grim prognosis for UK PLC's recovery capped a dismal economic week.

 

http://www.telegraph.co.uk/finance/economics/8290384/Mervyn-King-The-oth...

Tue, 02/01/2011 - 13:46 | 924241 fuggetaboutit
fuggetaboutit's picture

Wonder if there is any correlation between input prices surging and orders in ISM going berzerk the last 3 months?

Wonder what happens when those orders are filled and the demand is choked off by higher cost?

Probably not, its probably just an awesome economic recovery with the highest structural unemployment in US history

Tue, 02/01/2011 - 14:08 | 924325 jus_lite_reading
jus_lite_reading's picture

I talked to a contact who I haven't seen in a very long while at a gathering the oter day- long story short, she works in NJ at the unemployment office in (can't say which one) county and said to me (roughly what I remember)

"Things are bad, really, really bad. I see people coming in begging for extensions and we turn them away. The worst part is those people simply fall off the books... We now have 3 full time stationed County Sheriffs deputies keeping the order. I work in fear of my life..."

I swear she had real fear in her voice of how bad things are about to get here in NJ and the whole US. She is worried. Any questions?

Update-- I forgot to mention this! She said "starting last November we had the line wrapped around the building. The lines for unemployment have never been so long."
THAT IS WHAT WE FACE. EFF THESE FAKE MARKETS!

 

Tue, 02/01/2011 - 13:08 | 924074 HamyWanger
HamyWanger's picture

Zimbabwe???

You are comparing the USA to Zimbabwe? The USA are not a corrupt, banana, third-world country with printing presses running day and night. We have the best elites in the world, democracy and prosperity. The future looks bright for us.

I'm glad I'm an American.

Tue, 02/01/2011 - 13:11 | 924094 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Sing with your friend Harry,

Jump down turn around pick a bale of cotton, jump down turn around pick a bale a day!

Tue, 02/01/2011 - 16:13 | 924862 Calmyourself
Calmyourself's picture

Right on Hammy, besides we will never run out of ink, we are the US after all..

Tue, 02/01/2011 - 13:11 | 924095 Commander Cody
Commander Cody's picture

Tongue firmly in cheek, as usual, eh Hamy?

Tue, 02/01/2011 - 14:59 | 924541 cbxer55
Tue, 02/01/2011 - 13:18 | 924124 jus_lite_reading
jus_lite_reading's picture

Love it! Hamy = Sarcasm

Tue, 02/01/2011 - 13:29 | 924167 Popo
Popo's picture

Until now, I didn't know that you were just trolling.  

 

Hamy, you've jumped the shark.

Tue, 02/01/2011 - 13:43 | 924219 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Hamy's awesome comments and the ensuing trainwreck of people that don't get him (IE- "you got Hamy(ed))is one of the ZH community's best "inside secrets"

Tue, 02/01/2011 - 14:16 | 924376 Hedgetard55
Hedgetard55's picture

As I said on another thread, Hamy pwns this site!

Tue, 02/01/2011 - 13:44 | 924225 Ratscam
Ratscam's picture

Maybe not as corrupt in % per capita but in USD terms definitely far worse off than Zimbabwe. Look at all the US "nation building" in the world that has impoverished dozens of countries installing a US toy dictator. US was apart from Mao and Staling a big agressor of the 20th century. In the 21st definitely the biggest, killing millions of people mainly justified with false flag operations, costing their own countries one trillion USD per year. But the best is that the ruling elite fuck their own people as well as the world via the unconstitutional Federal Reserve Bank.

Difficult to be proud of this country after Andrew Jackson, but especially after 1913.

Tue, 02/01/2011 - 13:49 | 924228 Ratscam
Ratscam's picture

 

Tue, 02/01/2011 - 13:47 | 924237 Ratscam
Ratscam's picture

 

Tue, 02/01/2011 - 14:04 | 924321 Fernley Girl
Fernley Girl's picture

I (heart) Hamy.  No one else can channel Harry like Hamy can!  ;)

Thu, 02/03/2011 - 10:57 | 930718 tonyw
tonyw's picture

haMy, you certainly have the best government that monied interests can BUY. In other corrupt countries the governments have to steal the assets from the people.

 

Tue, 02/01/2011 - 13:07 | 924080 Xibalba
Xibalba's picture

gold and silver down about the same. 

Tue, 02/01/2011 - 13:12 | 924102 EscapeKey
EscapeKey's picture

(1430-1335)/1430 = 6.6%, so yeah, totally "about 17%".

Tue, 02/01/2011 - 13:48 | 924258 Xibalba
Xibalba's picture

and silver?  =/

Tue, 02/01/2011 - 15:17 | 924621 papaswamp
papaswamp's picture

From it's recent high (31.02-28.47)/31.02= down 8%...not quite 17%

Tue, 02/01/2011 - 17:23 | 925163 Anonymouse
Anonymouse's picture

But if you add 8% and 6.6%, you get 14.6%, which is pretty close to 17% (especially after you convert troy oz. to celsius). 

 

And remember, he said "gold AND silver", not "gold OR silver"

Tue, 02/01/2011 - 13:08 | 924083 RmcAZ
RmcAZ's picture

Deflation, bitchez... Oh, wait...

Tue, 02/01/2011 - 15:04 | 924559 Bay of Pigs
Bay of Pigs's picture

Mish says rising prices isn't inflation. This is deflation.

Pardon me?

Wow, just wow...

Tue, 02/01/2011 - 16:27 | 924923 Bay of Pigs
Bay of Pigs's picture

Or is it stagflation?

Tue, 02/01/2011 - 13:13 | 924103 alien-IQ
alien-IQ's picture

We are fast approaching a dollar collapse...of this there is little doubt.

It seems that was the Bernanks plan all along. He's now one step close to "mission accomplished".

Tue, 02/01/2011 - 13:56 | 924292 Mike2756
Mike2756's picture

That was my thought. Currency first, then bonds to follow, Fed or no Fed.

Tue, 02/01/2011 - 13:15 | 924107 HarryWanger
HarryWanger's picture

You can argue Zimbabwe but really, the economic numbers are pretty impressive. Zimbabwe didn't have that going for it. 

For one second, just one second, can you take off the "gray, world is doomed" glasses and look objectively at the data? It's becoming comical that post after post is nothing but pessimism when in reality we're seeing a nice turnaround in the economy. That cannot be denied or argued sensibly at this point.

Look, I'm a small business owner and have told everyone here for months how strong the turnaround has been. But those stories don't want to be heard here. Only the "world will end" tomorrow stories by the likes of clowns like Martensen and Rosie. Ridiculous.

Tue, 02/01/2011 - 13:18 | 924120 EscapeKey
EscapeKey's picture

Right, so looking at absolutely surging input and outputs costs is "doomster like".

I'm glad you're not information czar, or us uninformed minions no doubt would be "shielded" from this "societally harmful" information.

Tue, 02/01/2011 - 23:14 | 926139 Mark McGoldrick
Mark McGoldrick's picture

The rise in cotton prices has - once again - nothing to do with Bernanke.

It started last summer with huge supply/demand imbalances, as farmers harvested the smallest cotton crops in 20 years.  After the catastrophic collapse of our world economy in 08/09, it has proven very difficult for producers to gauge supply/demand equilibriums in a variety of industries.  Not wanting to be stuck with inventory, coupled with a surprisingly robust economic rebound has fucked up all sorts of supply/demand equilibriums.   

Commodity traders take these imbalances, exploit them, shoot them up with steroids and create alpha. 

Why is everything, EVERYTHING have to be Bernanke's fault, no matter how absurd?  We need TRUTH, not libertarian catnip. 

Wed, 02/02/2011 - 00:28 | 926306 pcrotty41@hotma...
pcrotty41@hotmail.com's picture

Although the Bernank may have nothing to do with the rise in cotton prices, I can assure you that the relative weakness in the US dollar in which cotton is priced has a lot to do with its recent parabolic type move along with other commodities.

The rise in cotton prices has been due to a combination of supply problems (floods in Pakistan and early frost in China), increased demand from Chinese consumers, and the weakening of the US Dollar, as well as increased demand (in comparison to 08/09) from US and rest of world.

And the rise in cotton prices has had EVERYTHING to do with the rise in Polyester and Nylon prices the cheaper alternatives that everyone has surged into.  I work in the consumer goods industry making backpacks, apparel, etc.. and we are on 24 hour price quotes for everything from materials to trims.  In my 20 years in the industry I have never experienced anything like it. 

Wed, 02/02/2011 - 01:29 | 926406 Mark McGoldrick
Mark McGoldrick's picture

I agree that the price of cotton is affected by dozens of variables, but the US dollar is not high on that list.  The US dollar has moved in a ~12% range for the past 2 years, while cotton has over doubled in the past six months. There is a complete disconnect here.  Furthermore, look at the huge downward slope of the US dollar from 06-08, yet look at the stable price of cotton.  No relationship there, at all. 

Here is a chart of the US dollar:

http://finviz.com/futures_charts.ashx?t=DX&p=w1

Here is a chart of cotton:

http://finviz.com/futures_charts.ashx?t=CT&p=w1

But the larger point of my post is that this continuous attempt to solely blame Bernanke for everything wrong in the world is ludicrous.  

 

Wed, 02/02/2011 - 04:42 | 926591 EscapeKey
EscapeKey's picture

Right, so once again

- cotton is supply/demand imbalances

- equities is improving economy

- oil is opec distortions

- gold/silver is speculation

- platinum is strong car demand

- and i forget which one is political instability.

Alternatively, this underlying trend could all be explained by an increase in the monetary base, occam's razor and all. But hey, keep it up. Personally, I can't wait to hear what the next excuse will be.

Tue, 02/01/2011 - 13:21 | 924135 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You will be typing this at DXY 66 I presume.

Tue, 02/01/2011 - 13:46 | 924232 whatz that smell
whatz that smell's picture

 

beggar thy neighbor, bitchez!

praise be the bernank! may he ease a thousand years!

Tue, 02/01/2011 - 13:47 | 924253 AccreditedEYE
AccreditedEYE's picture

+1 lol

Tue, 02/01/2011 - 14:09 | 924338 Max Hunter
Max Hunter's picture

You will be typing this at DXY 66 I presume.

Looking at the 5 yr... 76.2 ish looks like a very strong trend line.. If it's broken.. 66 could be seen in a couple of months... 2008 will look like a walk in the park..  If it bounces... Could get a nice pull back

Think the Euro and CHF will have the steam to push it through?? I don't think the Yen or GBP will add much to the pressure...  It will be interesting.  AUD could help the push down..

Going to be interesting at that point..  

Tue, 02/01/2011 - 15:19 | 924632 papaswamp
papaswamp's picture

gets any lower and Japan will panic and step in again.

Tue, 02/01/2011 - 13:22 | 924141 Mike2756
Mike2756's picture

Buck should be rallying on this news, then. They can't trash bonds too much due to Fed manipulation, what's the next best thing?

Tue, 02/01/2011 - 13:27 | 924161 alien-IQ
alien-IQ's picture

you remind me of someone I passionately loathe.

Tue, 02/01/2011 - 13:29 | 924165 Commander Cody
Commander Cody's picture

Do you believe everything the government and government-sponsored organs got to say?  I don't.  I'm skeptical about the reality of said "recovery".  However, I'd really like to see it happen for everyone, not just for the 10% who are riding the wave of Fed-inspired wealth effect.

Tue, 02/01/2011 - 13:31 | 924171 gwar5
gwar5's picture

The world is on fire, it was predicted, and you still believe in Santa Claus

Now's time for a good joke about Egypt and denial river, but you figure it out

Tell Benbabwe his mummy is going to spank his saggy bottom if he doesn't stop

Tue, 02/01/2011 - 17:53 | 925285 PhattyBuoy
PhattyBuoy's picture

The Genie is out of the bottle in the ME. Good luck putting a cork in that one ...

Egypt tumbles into complete chaos!

Where it spreads from there, is anyone's guess, but rest assured it will spread ...

Tue, 02/01/2011 - 13:31 | 924175 Popo
Popo's picture

So you're basing your "turnaround" theory on your completely granular data?  You're a small business owner?  Lulz.

Tue, 02/01/2011 - 13:36 | 924192 Sam Clemons
Sam Clemons's picture

Harry, remember, you are being paid in dollars, something that there is more of ($4B) every day.  Of course things measured in dollars will look good.  It doesn't take a braintrust to figure this out.

 

Tue, 02/01/2011 - 14:39 | 924454 jus_lite_reading
jus_lite_reading's picture

Actually it works out to $6.3 BILLION 24/7 365 but Hu's counting?

I mean, all that cash to pay fat bonuses I HAVE NEVER seen before must be good as Harry claims home decor/consumer discretionary are rocking...

Except, that according to my "Market to Main" super computer is predicting with each tick higher in the DOW, the US moves one foot closer to total revolution, Egyptian style.

 

Either way, I hope BEnron's got a an exit plan

Tue, 02/01/2011 - 13:36 | 924193 macholatte
macholatte's picture

OK Harry. I'll bite. Just what small business are you in? You must think that your company's performance is indicative of the nation at large. Explain.

For the record, if you are doing well, then good for you. May there be 10 million more like you so the doom-n-gloom will be lifted. Seriously.

Personally, I'm not seeing such a rosy future.

Tue, 02/01/2011 - 13:51 | 924271 HarryWanger
HarryWanger's picture

Consumer discretionary in what would be categorized as Home Decor. We sell through retail outlets across the country and recently signed some international licensing agreements. We had our best Q4 in 9 years of business and just came off our best January ever. 

I've been reporting this here since early fall that I saw an amazing turnaround in consumer spending. Yet, the people here who apparently never leave their houses or computers, doubted and continue to doubt that recovery. It's silly.

Tue, 02/01/2011 - 14:06 | 924324 redpill
redpill's picture

What's silly is it not occurring to you why people would be spending more money on their current house, and where they used to spend that money instead. Hint: home sales at generational lows might have something to do with it

Tue, 02/01/2011 - 14:25 | 924404 AnAnonymous
AnAnonymous's picture

We had our best Q4 in 9 years of business and just came off our best January ever. 

 

Home decor, best performances ever in nine years of business, current quagmire context. Others would be extremely alerted by that unexpected cocktail.

Tue, 02/01/2011 - 14:28 | 924412 william the bastard
william the bastard's picture

Bully for you. That's just bully

Nearly 11 Percent of US Houses Empty

Published: Monday, 31 Jan 2011 | 3:34 PM ET

http://www.cnbc.com/id/41355854

 

Bargains abound, but few are interested or eligible to take advantage.

Tue, 02/01/2011 - 14:30 | 924418 jus_lite_reading
jus_lite_reading's picture

Home Depot Expo Centers... remember those HARRY? YOU put them out of business!

Tue, 02/01/2011 - 14:33 | 924426 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Harry, what kind of drug you smoking man. I would like a shot of it what ever it is.

Tue, 02/01/2011 - 14:41 | 924469 HarryWanger
HarryWanger's picture

Reality drug. I see what's happening in retail on a daily basis. I see people spending money. I see manufacturing picking up. I see people starting to get full time employment.

The "drug" being smoked by most here is the most dangerous of all. They get "high" and deny facts and figures that are right in front of their squinty eyes. Again, it boggles my mind that people can look straight at facts from multiple sources and sit with their mouths agape like stooges who can't think for themselves and repeat the conspiracy mantra over and over and over.

Tue, 02/01/2011 - 14:59 | 924519 akak
akak's picture

Harry, as evidenced by your incessantly pro-establishment, pro-power elite, pro-statist, pro-corruption, pro-fiat, pro-official lies posts, you are either incredibly naive and ignorant, or positively evil.  Or most likely, both.

But oops, I once again forgot that you are really just James Kostohryz, purposefully posting inflammatory and antagonistic comments to elicit outrage and hate as part of your sociopathic study of the "permabear psychology".

Tue, 02/01/2011 - 15:07 | 924576 Ferg .
Ferg .'s picture

Harry ,

 The data from August onwards has been an improvement , that can't be disputed . However the fact remains that housing is weak , employment is weak and debt , both federal and municipal ,  is at obscene levels and rising . The US is no longer a great manufacturing nation , so improvements in that sector won't be able to sustain the recovery . Moreover , the role of a weak dollar in that data ( so much as it pertains to exports ) is probably considerable .

Sure the readings on some metrics of economic health have picked up , but they should be placed in proper context .

Tue, 02/01/2011 - 15:28 | 924674 Thunder Dome
Thunder Dome's picture

Harry what has happened the last several months to alter the tragectory of rising food costs?  What will the globe look like with another 50% upmove in rice?

Tue, 02/01/2011 - 14:46 | 924486 jus_lite_reading
jus_lite_reading's picture

I am certain that "Harry" is a gubmint plant.

The "look at me I'm so patriotic" American flag is a decoy. Do some DD on psychology.

His constant "rebuttal" excusing and celebrating BEnron's actions sounds reminiscent of the talking heads on CNBS/Associated Propaganda.

His arrogant vile attitude makes those who have to live in the real world want to vomit.

 

In 2008 when they began the save the banks at the taxpayers expense charade, I said they have about 2 years before the SHTF. Times up...

Tue, 02/01/2011 - 15:01 | 924548 tmosley
tmosley's picture

Some time ago, there was a television show that featured a drug called "refrain".  The drug caused the user to relive positive events from their past.  The user is also blind to things that are going on right in front of them.  You could throw them through a window and they wouldn't notice it.  It was a big hit in a nation that had been conquered and ground into dust by a worldwide military empire.

I think Harry found a way to make a real-world version.  My guess is it is chemically similar to Hopium.

Tue, 02/01/2011 - 18:26 | 925425 Franken Stein
Franken Stein's picture

Be careful tmosley your revealing your inner nerd ;). This comment along with your avatar tell me you've been watching a little too much anime.

Isn't it amazing how our world is looking more and more like the one in Code Geass everyday! I just wish we had our own Zero.

Tue, 02/01/2011 - 14:43 | 924478 macholatte
macholatte's picture

Fascinating. You must be an importer selling wholesale since the USA doesn't manufacture home decor anymore. You probably have a really good website. Very 21st century. I remember you posting charts of retail ETF's and such. So you are also amazed that your company is doing so well. Again, I hope your sales continue to improve because it should mean something significant somewhere although I can't figure it out and judging by the hammering you get by a few on ZH they can't figure it out either.

 

Tue, 02/01/2011 - 14:48 | 924499 jus_lite_reading
Tue, 02/01/2011 - 17:17 | 925137 UninterestedObserver
UninterestedObserver's picture

You're a fucking lying scumbag and I bet there is no way in hell you could back up any of your BS claims you fucking troll.

Tue, 02/01/2011 - 17:55 | 925293 downrodeo
downrodeo's picture

Speaking of silliness, you will promise to post your research paper as soon as it comes off of the press, won't you? We're simply clawing at our bunker hatches to read it.

Tue, 02/01/2011 - 18:23 | 925413 akak
akak's picture

Indeed!  If it were not for the anticipation of looking forward to the release of James', I mean "Harry's", study on the psychology of all of us observers of reality and deniers of elite propaganda and lies --- in other words, all of us us "utopian permabears" --- I would find indefinitely sitting on top of my canned beans and SPAM to be positively painful.

Tue, 02/01/2011 - 13:48 | 924254 6 String
6 String's picture

Look, I'm a small business owner and have told everyone here for months how strong the turnaround has been.

So, are you prepared to pay the 80+% in World War II tax rates to balance the unfunded liabilities and vertical national debts? And if eveyone had to do this, what would you make of the economy then?

Of course, if debts continue to get inflated away--along with ramped everything basic necessity commodity--stocks will eventually underperform real money--gold and silver.

Gonzalo Lira had a great point as hyperinflation began--that an uptick in the economy and interest rates would be misunderstood initially as a "recovery." Were there folks.

Next stage: recognition. Loading up in precious metal stocks.

 

 

Tue, 02/01/2011 - 14:03 | 924285 SheepDog-One
SheepDog-One's picture

Harry you suck at Harrying, HamyWanger is a MUCH better Harry than you are!

Tue, 02/01/2011 - 14:10 | 924347 jus_lite_reading
jus_lite_reading's picture

Hey Harry! I found your business a few days ago on this site-

http://www.dailyjobcuts.com/

On the far right, under "closings" not one, but two HOME DECOR stores shuttered doors!

 

I guess you're taking all the work away from them! LMAO!

 

Do you believe in karma?

Tue, 02/01/2011 - 14:47 | 924458 akak
akak's picture

.

Tue, 02/01/2011 - 14:46 | 924492 akak
akak's picture

Price of one ounce of gold: $1340

Current US federal government debt: $14,000,000,000,000

Junking HarryWanger's pollyannish, intellectually insulting, perma-pro-establishment disinformation and trolling: priceless

Tue, 02/01/2011 - 14:53 | 924520 jus_lite_reading
jus_lite_reading's picture

BTW- I loved your post about HARRY:

 

by akak
on Wed, 04/28/2010 - 21:21
#323023


Before responding to the virtually omnipresent poster "Harry Wanger", please be aware of just whom and what you are dealing with in this person:

http://www.minyanville.com/businessmarkets/articles/AAPL-apple-gm-psycho...

His real name is James Kostorhyz, and he is here posing as a troll in dishonesty and in disregard for the fundamental purposes of this forum. He is NOT posting here in good faith, but is purposely antagonizing those with independent, anti-establishment views and opinions for his own selfish and cynical purposes, as part of a study on "the psychology of permabears".

Please do NOT respond to this reprehensible troll, here or anywhere else on ZeroHedge.  He is NOT here in good faith, and should be shunned!

 

And of course, everyone knows HARRY!

http://www.theburningplatform.com/?p=8360

 

 

Tue, 02/01/2011 - 15:16 | 924614 Thunder Dome
Thunder Dome's picture

TROLL!!!

 

 

Tue, 02/01/2011 - 16:17 | 924883 Calmyourself
Calmyourself's picture

Yes Harry I can take off the doomer gray glasses.  What I see as a small business owner is structural imbalances ready to topple like dominoes.  I will not argue that the liquidity pump is levitating markets and your business..  Just don't try to jerk my chain and tell me everyhitng will be alright Harry because sooner or later the chickens are coming home tooo rooost..

Tue, 02/01/2011 - 16:41 | 924985 rosiescenario
rosiescenario's picture

"take off the "gray, world is doomed" glasse"....looks rosey from where I sit...you just want to be in the right stuff...my ammo locker overfloweth...

Actually Harry you are right about the market....with Ben's hand firmly on the throttle of the midnight express to inflationville, just get positioned for  the ride and avoid any of those stocks whose margins are about to be vaporized by inflationary forces and own the ones who benefit the most....might I suggest PM miners...especially those in silver???

Tue, 02/01/2011 - 13:15 | 924108 SilverRhino
SilverRhino's picture

And gold and silver are down for the month. Go fucking figure. The funny part is that I have 'investor' friends keep telling me to book my profits on my physicals. Yes they are short sighted idiots.

Tue, 02/01/2011 - 13:48 | 924256 Sam Clemons
Sam Clemons's picture

Why would anyone exchange some physical precious metals for paper money unless they absolutely needed to in order to eat?

Tue, 02/01/2011 - 13:15 | 924109 Jason T
Jason T's picture

Germany's stock market, in dollar terms, was worth 1/6 in 1923 vs what it was in 1913.

industrial premises, foreign currency, gold and silver of course  and farmland preserved wealth.  

Tue, 02/01/2011 - 13:15 | 924110 Oh regional Indian
Oh regional Indian's picture

Maybe someone knew about the coming Egypt problem some time ago and is making a killing? And someone on ZH comments needs Kudos. 

Everytime someone said gold or silver, this person said cotton.

but anyway, you cannot eat cotton. This too shall pass.

Food on the other hand.... to the moon.

Food inflation in India is beyond belief. 

ORI

http://aadivaahan.wordpress.com/2011/01/31/then-again-people-choose-yoga-over-gurdjieff/

Tue, 02/01/2011 - 13:20 | 924131 EscapeKey
EscapeKey's picture

Have you got some articles on the inflation situation in India?

Tue, 02/01/2011 - 15:16 | 924616 EscapeKey
EscapeKey's picture

Vegetable prices were up 3.84 per cent week-on-week

Blink. Wow.

Tue, 02/01/2011 - 14:56 | 924528 whatsinaname
whatsinaname's picture

Was in India recently and inflation is awful as the converted USD cannot keep up with the prices in India. Commodities (especially food and in particular onions) have been on a rampage in India recording a recent 19% hike yoy which for a country like India is phenomenal. Inflation is really biting the common man HARD. Only ones keeping up are the off-shore workers paid in pretend dollars.

Tue, 02/01/2011 - 13:56 | 924295 SheepDog-One
SheepDog-One's picture

What? Youve never had a cotton sandwhich? Soon it will be whats for dinner in amerika.

Tue, 02/01/2011 - 14:13 | 924359 countryboy42
countryboy42's picture

Ever read Catch-22? Guy was trying to market chocolate covered cotton.

Tue, 02/01/2011 - 14:17 | 924379 SheepDog-One
SheepDog-One's picture

YES exactly, LMAO!

Tue, 02/01/2011 - 14:22 | 924395 andybev01
andybev01's picture

I've woke up before with cotton mouth, does that count?

Tue, 02/01/2011 - 15:12 | 924606 Bastiat
Bastiat's picture

And think what you can save on toilet paper!! Very efficient!

Tue, 02/01/2011 - 20:55 | 925856 andybev01
andybev01's picture

+ 2-ply

Genius!

Tue, 02/01/2011 - 16:44 | 925002 rosiescenario
rosiescenario's picture

"this person said cotton"...only problem with cotton is that the market is so thin any sizeable fund can drive the price north or south irregardless of end demand.

Tue, 02/01/2011 - 13:16 | 924111 umop episdn
umop episdn's picture

A US zinc penny (1983 or later) has about 0.6 cents of zinc in it. How many limit-ups in the zinc market before it is worth a penny, intrinsically?

Tue, 02/01/2011 - 13:49 | 924263 cxl9
cxl9's picture

Yes. Even now a circulating nickel (1946-2011) has a melt value of more than 7 cents. Nickels investment would be the perfect inflation/deflation hedge (for those who still believe that deflation is possible).

As the prices of base metals outrun the face value of coins, the government will start stamping out coins made of aluminum, steel, or plastic.

Tue, 02/01/2011 - 13:16 | 924114 Tic tock
Tic tock's picture

Well, chairman. Will it be the 320+ million people or the Banking elite?

Tue, 02/01/2011 - 13:17 | 924116 TheGreatPonzi
TheGreatPonzi's picture

Gonzalo Lira was right. Good timing.

"Therefore, I am confident in predicting the following sequence of events:

    • By March of 2011, once higher commodity prices reach the marketplace, monthly CPI will be at an annualized rate of not less than 5%.

    • By July of 2011, annualized CPI will be no less than 8% annualized.

    • By October of 2011, annualized CPI will have crossed 10%.

    • By March of 2012, annualized CPI will cross the hyperinflationary tipping point of 15%. "

Tue, 02/01/2011 - 13:24 | 924146 johnnymustardseed
johnnymustardseed's picture

In an honest world you would be right, but they will continue to hide this inflation, we can not afford cost of living increases to social security.

Tue, 02/01/2011 - 13:43 | 924224 cossack55
cossack55's picture

Once you open your 16 oz box of Kelloggs Corn Flakes and one flake falls out, the game me be up.  Then again, there is at least one flake at the Fed.

Tue, 02/01/2011 - 14:02 | 924309 Horatio Beanblower
Horatio Beanblower's picture

Gonzalo Lira v Nicole Foss - http://fosslira.blogspot.com/

Let me know what you make of the price tag.

Tue, 02/01/2011 - 14:13 | 924363 Rainman
Rainman's picture

Housing is weighted at 42% of the CPI, thus masking the inflated measurement of the other components in the index. Doctor Bubble just posted an interesting analysis of this and why CPI never revealed the bubble during the housing boom.

      www.doctorhousingbubble.com

Tue, 02/01/2011 - 13:17 | 924121 gwar5
gwar5's picture

Zimbabwefied by Benbabwe

Tue, 02/01/2011 - 13:26 | 924155 redpill
redpill's picture

The United States of Benbabwe

Has a nice ring to it

Tue, 02/01/2011 - 13:32 | 924176 Bastiat
Bastiat's picture

Benbabwe . . . isn't that a Korean dish?

Tue, 02/01/2011 - 13:18 | 924123 johnnymustardseed
johnnymustardseed's picture

Banksters and Hedgies piling up profits with free money from the FED. The thing about starving people is that eventually they are to weak to riot.

Tue, 02/01/2011 - 13:19 | 924129 I Told YOU So
I Told YOU So's picture

that means its time to SELL some OTM cotton puts, say 175 185 strikes very high premium now.

Tue, 02/01/2011 - 13:20 | 924133 I Told YOU So
I Told YOU So's picture

Boner, should be OTM CALLS 

Tue, 02/01/2011 - 13:24 | 924147 Commander Cody
Commander Cody's picture

But the gubmint says inflation is tame.  They wouldn't lie, now would they?

Tue, 02/01/2011 - 13:25 | 924149 redpill
redpill's picture

Instead of the Zombie Apocalypse with the world overrun by undead, it will be a Zimbabwe Apocalypse with the world overrun by the unfed. Ah the universe has such a sense of humor.

Tue, 02/01/2011 - 14:13 | 924360 SheepDog-One
SheepDog-One's picture

And theres no excuse for a food shortage in america...only 15 years ago we were still growing all our own and still exporting massive amounts. A food shortage where we are now dependant on imports in america is criminal and all responsible should be hanged.

Tue, 02/01/2011 - 14:51 | 924511 Oh regional Indian
Oh regional Indian's picture

Cargill, Monsanto, ConAgra, ADM, Bayer, FDA, Subsidies, Factory Farming...

ORI

Tue, 02/01/2011 - 16:25 | 924920 holmes
holmes's picture

Yeah, how about Barbara Boxer turning off the irrigation canals to California's Central Valley starving the most productive farmland in America. Why is she doing this? To save some little fish that no one ever heard of and to bring in the big bucks from the enviro wackos.

Tue, 02/01/2011 - 15:03 | 924555 goldsaver
goldsaver's picture

So stealing this....

Tue, 02/01/2011 - 13:29 | 924164 Cdad
Cdad's picture

Just check a two day chart of the DXY.  There is the effect of the criminal syndicate known as Wall Street.  It is complete with flash dashes again today, too.

Each time I look at that chart, I get angrier.  I hear Ben Bernanke's printing press running, and I hear the tinkling of fine crystal...somewhere near Wall Street at noon.  And those scheduled to pimp their crap on the Blow Horn prattle on about valuation and discounted cash flow...as machines simply short the dollar [and any other store of value for the common citizen] and buy everything else at any price as part of the forced reallocation...the circle of destruction continuing...until it doesn't anymore.

And DC bailed these guys out for our own good?  Does anyone really believe that, in the age of the Internet, the cover will stay tight enough upon this story...the story of the greatest crime every committed by a criminal syndicate of Wall Street bankers...that anyone alive during this event will actually come back to Wall Steet with the remainder of their funds?  I think not.

CAPITAL WILL NOT FORM IN BANKS AS CORRUPTS AS THESE.

Fire hose, please....

Tue, 02/01/2011 - 13:40 | 924208 sbenard
sbenard's picture

Ditto that!

But two days is nothing. They've been destroying the Dollar for nearly three weeks! Meanwhile the price of food is going parabolic as a consequence! The food riots we've seen so far are nothing compared to what's to come!

Tue, 02/01/2011 - 13:53 | 924278 Cdad
Cdad's picture

Agreed on the time frame and the dollar.  However, these last two days...this is what has propelled the ponzi scheme, the retest of 1300...and in such a short span, the move is so visible.  It is at a moment like this that the entire computerized, terminator robot nonsense can be so clearly seen.

And as posted in another article about how stock picking is dead, so too is investing dead, which means our capital markets are dead, which means our free market is in intensive care...and as you follow that path, you are delivered to the portrait of a plutocrat, a billionaire banker in Davos complaining about how life is not fair enough for him as he arbitrages to death every last store of American wealth.

On a two day chart like this, it is just so much harder to close your eyes and pretend it is not happening...but it is.  My country!

That was my point, is all, about two days on the Dixie.  Oh, and...........

CAPITALISM CANNOT EXIST WITH BANKS THIS CORRUPT!

Hello Ron Paul?  Bueller.....Bueller....Bueller...

 

Tue, 02/01/2011 - 13:44 | 924229 sbenard
sbenard's picture

Ditto that!

But two days is nothing. They've been destroying the Dollar for nearly three weeks! Meanwhile the price of food is going parabolic as a consequence! The food riots we've seen so far are nothing compared to what's to come!

Tue, 02/01/2011 - 13:52 | 924274 I Told YOU So
I Told YOU So's picture

don't fret, the euro will shortly turn around, at soon as it does make some good money by SELLING some euro calls around 145-150, that should help some.

Tue, 02/01/2011 - 14:00 | 924306 SheepDog-One
SheepDog-One's picture

I dont know Cdad, not ALL stores of wealth are getting hammered by The Bernank, my M-4 I bought 5 years ago is way up in value and those copper and brass thingies that go into it used to be $50 for 500, now $250 for 500.

Tue, 02/01/2011 - 15:56 | 924784 impending doom
impending doom's picture

So, are you a fan of Nut'n Fancy? Or maybe you are him? All your posts sound like they came from one of his youtube vids. No offense intended.

Tue, 02/01/2011 - 14:15 | 924374 SheepDog-One
SheepDog-One's picture

Also now the BlowHorn doesnt even mention the icky dollar anymore, who needs it when you got STOCKS to swoon over all day!

Tue, 02/01/2011 - 13:30 | 924170 sbenard
sbenard's picture

Risk? What's that?

Tue, 02/01/2011 - 13:34 | 924179 william the bastard
william the bastard's picture

Priced in gold, cotton is up about 40% for the month.

Tue, 02/01/2011 - 13:33 | 924180 Johnny Lawrence
Johnny Lawrence's picture

At least in the US, I haven't seen any signs of companies passing through those input costs.

So either they will, or their margins will collapse.  Either scenario is not good.

Tue, 02/01/2011 - 13:35 | 924189 Bluntly Put
Bluntly Put's picture

And yet global trade seems to be dropping off a cliff, the BDI is around 1,100. What happens when it drops below 1,000, while commodities are ramping upwards?

 

Tue, 02/01/2011 - 13:39 | 924206 gookempucky
gookempucky's picture

The Mex Peso will go par--quietly broke below 12 today.

Tue, 02/01/2011 - 14:21 | 924394 sun tzu
sun tzu's picture

What will happen to manufacturing and tourism in Mexico?

Tue, 02/01/2011 - 13:36 | 924191 overmedicatedun...
overmedicatedundersexed's picture

seems home land sec has warned the big bank ceo's that arabs are out to get them..I think arabs are the least of their worries..don't think we will see any of them in public for a while a shame really.

Tue, 02/01/2011 - 13:36 | 924194 Convolved Man
Convolved Man's picture

Breaking News

The virtuous circle is reaching closure.

Party at the Fed.

BYOB

Tue, 02/01/2011 - 13:37 | 924196 SayTabserb
SayTabserb's picture

For crying out loud, TD, will you stop this and click over to Krugman's blog, The Conscience of a Princetonian? There are explanations for all of this. Core inflation is low and trending lower. These modest spikes in commodities are easily explained (away). Each crop is a victim of bad weather, ok? Things like rubber and copper are because of increased demand in China, because they're booming. Any crop not explained away by weather can be explained by the need of the Chinese peasant to eat more corn, for example, in order to do all that work with rubber and copper. My guess is that Chinese factory workers are eating tremendous quantities of corn tortillas. Bottom line: THERE IS NO INFLATION! Glad I could clear this up.

Tue, 02/01/2011 - 13:49 | 924260 EscapeKey
EscapeKey's picture

Exactly. So far, I've heard about 20 different reasons for rising prices, while the Austrians have had just one.

But hey, 20 different - and contradictionary - explanations are totally more likely than one. Occam's razor, and all.

Tue, 02/01/2011 - 13:41 | 924212 Wynn
Wynn's picture

Looks like Ron Paul might start poking the hornet's nest. Good article at B I.

One of Congressman Paul's immediate aims is to challenge what he believes is a gross misunderstanding of Fed policy when it comes to unemployment. He intends to interview Former Fed board governors on the topic at the subcommittees first meeting on February 9th.

http://www.businessinsider.com/ron-paul-interview-2011-2#ixzz1CjKOo8vo
Tue, 02/01/2011 - 13:43 | 924221 Dick Darlington
Dick Darlington's picture

"Nope, still no inflation in the horizon Timmah", said Ben and went to print some more.

Tue, 02/01/2011 - 13:44 | 924227 Internet Tough Guy
Internet Tough Guy's picture

Millions of people don't give a damn about the stock market, but they care about these prices. The government is playing with fire.

Tue, 02/01/2011 - 13:46 | 924243 cossack55
cossack55's picture

Any governments last recourse is to command "Fire".

Tue, 02/01/2011 - 13:44 | 924231 Bruno the Bear
Bruno the Bear's picture
     

Cramer's latest take on the Bernank:

Manitowoc (MTW - commentary - Trade Now), the crane and food machinery company, is up huge today. Some would like to credit management for navigating the company through rough times, made tougher by its overpaying for Enodis, a food service equipment company, back in 2008. Manitowoc outbid the much larger Illinois Tool Works (ITW - commentary - Trade Now), paying a staggering $2.7 billion right before the world's financial collapse.

I credit Ben Bernanke. By keeping the spigot open, by making it so companies like Manitowoc could survive by doing bond offering after bond offering even as it missed its earnings estimates, Bernanke saved this American manufacturer and thousands of jobs that would have come with it. I have no doubt that the combination of a stressed balance sheet and a collapse of the crane market would have doomed MTW. Instead, it's flying high today.

Manitowoc's crane news is in sync with the terrific news flow we have had from Joy Global (JOYG - commentary - Trade Now) and the takeover of Bucyrus (BUCY - commentary - Trade Now) by Caterpillar (CAT - commentary - Trade Now). It also makes a ton of sense that Terex (TEX - commentary - Trade Now) is up too, as that crane business looks the most like Manitowoc's business, and the crane order picture is outstanding.

We hear endless and relentless criticism of Bernanke for his attempts to keep rates down. We never hear, "Hey he saved thousands of jobs by keeping rates low -- maybe hundreds of thousands."

I do hope that when the book is written on his tenure, we look back and remember companies like Manitowoc that would have been shut out of the debt market or would have had to pay so much through the news that it wouldn't have made it through this incredible rough patch.

One day he will be credited with these kinds of saves.

Until then, go profit from his largess and buy CAT, TEX and of course MTW, and hope that Manitowoc one day realizes that these terrific brands don't have to be under one roof -- the company can split into two to create tremendous value.

Oh, and remember: This stock traded at $50 during the heyday, and while its balance sheet is far worse than it was back then (courtesy the Enodis overpay, which has wildly exceeded the entire market cap of the company for two years now, even up here), know that it could refinance a great deal of the debt with an equity offering here and return to those lofty levels.

Tue, 02/01/2011 - 14:08 | 924239 plocequ1
plocequ1's picture

No Inflation. Sesame chicken combo still same price as last year, And yes, this includes fried rice and shrimp roll. Repeat, No inflation.

Tue, 02/01/2011 - 14:34 | 924431 Fernley Girl
Fernley Girl's picture

But my ever-hungry grandson's Mickey D's double cheeseburger, ketchup only, has gone up from 99 cents to a buck twenty-nine.  Worse yet, the kid is only 15 and 6'5".  Glad I only have to pick him up after practice and feed him one day a week... five burgers at a time.

Tue, 02/01/2011 - 13:48 | 924255 johny2
johny2's picture

the price of the food is a sign where the price of silver is going, unless the Fed stops printing and devaluing dollars...And there is more chance of queen of England being reptile alien than of Bernanke stopping printing. 

Tue, 02/01/2011 - 14:03 | 924257 Comrade de Chaos
Comrade de Chaos's picture

AWESOME.

 

One can attempt to control the market and even appear to have the upper hand until ..reality comes back with vengeance.

 One of those days it will blow up. And the faster/larger the explosion the better our chances to start anew. 

 

 

Which of the developed countries provided the least government intervention on the help/economy size scale? 

Which of the developed countries did not relay on easy monetary policy to solve every single economic bump they face?

And which of the developed countries has the lowest unemployment since 1992?

Same country that is winning the cold trade war and electing physics PhD instead of lawyers.

 

 

 

 

Tue, 02/01/2011 - 13:49 | 924264 rustybenelli
rustybenelli's picture

Im glad the Bernank can stop inflation in a heartbeat.  I hope he does it soon.  I can not afford much more inflation.

Tue, 02/01/2011 - 13:57 | 924296 Dr. Richard Head
Dr. Richard Head's picture

For the last time already. THERE IS NO INFLATION!!!!  We are in a deflationary spiral and we need to create more capital on cotton linen. 

Wait a minute, if cotton is surging that means the value of the dollar should go up as well.  We might reach a point where the DOLLAHHH will be worth more for patching together clothes.  Kind of like a collector coin's melt value only different.

Ohhhh....American Idle is on.

Tue, 02/01/2011 - 13:59 | 924303 Bastiat
Bastiat's picture

USD likeness printed on cotton wd be great patching material for jeans!!  Somebody needs to do it!

Tue, 02/01/2011 - 14:14 | 924368 Dr. Richard Head
Dr. Richard Head's picture

We can call them or Bernanke Bloomers or Dollar Denim.

Tue, 02/01/2011 - 15:10 | 924596 Dr. Richard Head
Dr. Richard Head's picture

Ha.  What was once fashion will now become resourcefulness.  So will the tripping point be when dresses are more expensive than using actual dollars to sew it together?

Tue, 02/01/2011 - 14:36 | 924441 Dr. No
Dr. No's picture

The Bernank will shut down inflation when the academically accepted metrics indicate hyper inflation is in place and/or when the board of governers Pensions are at risk.  Aside from a visit-in-the-night from a "representative" of the real FED shareholders demanding change, the spigot will not be turned off until then.

Tue, 02/01/2011 - 14:01 | 924310 Bastiat
Bastiat's picture

Blythe getting her ass kicked today -- APR silver north of 28.50.  

Tue, 02/01/2011 - 14:03 | 924316 john milton
john milton's picture
Report: U.S. Intel Officials Warn Wall Street Execs of Al Qaeda Plot Read more: http://www.foxnews.com/us/2011/02/01/report-bank-execs-warned-al-qaeda-plot/#ixzz1CjPk70mn hah, maybe the real danger comes from homeland rather than in yemen
Tue, 02/01/2011 - 14:08 | 924327 SheepDog-One
SheepDog-One's picture

Al Qaaeda plot? Uh oh, CIA boys are at it again!
http://www.youtube.com/watch?v=Gzun4ehFjeA

Tue, 02/01/2011 - 14:06 | 924328 The Axe
The Axe's picture

The markets continue to plow higher and higher...no matter what???

Tue, 02/01/2011 - 14:09 | 924342 SheepDog-One
SheepDog-One's picture

1%? Mere childs play compared to Zimbabwe's money printing heydays where their markets were plowing higher 500% daily!

Tue, 02/01/2011 - 14:06 | 924329 Dick Darlington
Dick Darlington's picture

"Print, print, print away and export it to China! La la la la laa..."

Oh man I feel like singing today.

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