No Inflation? Commodities Highest Ever For This Time Of Year

Submitted by Tyler Durden on 02/05/2013 12:56 -0400

While every central banker and policy-leech spews forth the government-supplied statistics on inflation - noting that all is well, carry on - we recently pointed out that Gas Prices are their highest ever for this time of year. Of course, the standard supply constraints (or technical) reasoning was applied to dismiss this as transitory (even though it has continued to rise since); but what is perhaps more worrisome is the broad-based nature of the real inflation that is leaking into our global supply chain. The 24-commodity heavy S&P GSCI index (widely recognized as a leading measure of general price movements and inflation in the world economy) has never been as high in early February as it is currently - ever. And with global growth stagnating at best, it seems a tough call to blame 'recovery' for this inflating (fastest pace in 8 years) raw material price leaking cost-push inflation (and margin-compression) into the real economy.

and the fastest rise in 8 years...

Charts: Bloomberg

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Tue, 02/05/2013 - 13:02 | 3216610 hedgeless_horseman

http://future.aae.wisc.edu/data/annual_values/by_area/2052?period=complete&tab=feed

Glad we grass feed our cattle on pasture.

Last night's dinner of Steal au Poivre with unctous sauce and garden sweet potato casserole.

Tue, 02/05/2013 - 13:02 | 3216633 mayhem_korner

I just checked the tags on my kids new clothes. Even they are made of corn.

Tue, 02/05/2013 - 13:04 | 3216635 Popo

Is that a glass of milk? LOL.

Tue, 02/05/2013 - 13:09 | 3216659 hedgeless_horseman

Raw milk from our cow; it has not gone up in price, and I know exactly what is in it.

Has the price of Pepsi-Coke many feed their kids for dinner gone up?

Tue, 02/05/2013 - 13:11 | 3216671 TrumpXVI

MMmmm....Pepsi. It's not just for breakfast anymore.

Tue, 02/05/2013 - 13:20 | 3216710 Jason T

"By The Sweat of Hedgeless Horseman's Brow He Will Eat His Bread."

Amen Brother.

Tue, 02/05/2013 - 13:42 | 3216802 a growing concern

Don't go talking too loudly about raw milk, HH. That's terrist talk, you know.

Tue, 02/05/2013 - 14:08 | 3216889 ceilidh_trail

Ikea glassware?

Tue, 02/05/2013 - 14:40 | 3217009 Midas

I like the candle. I raise my own whales for the blubber to make candles.

Tue, 02/05/2013 - 15:10 | 3217118 hedgeless_horseman

Libbey glassware, and I think this style is still made in USA.

LBY stock is up 25%+ over 12 months, in nominal USD terms.

Thu, 02/07/2013 - 07:49 | 3222478 ich1baN

I am in Beijing right now.... there is no such thing as steak or that fancy French word here. My mouth is watering like Niagra Falls.

The raw milk is something I have always wanted to try, but it is illegal to sell where I used to live. Gubment sayz its bad for me. They always know best.

Tue, 02/05/2013 - 13:11 | 3216675 Motorhead

Sweet potatoes? Man, bring on the fries...or yams, hehe.

Tue, 02/05/2013 - 13:20 | 3216714 LawsofPhysics

The state just called. It's about the taxes on your meadow...

Tue, 02/05/2013 - 13:41 | 3216800 hedgeless_horseman

"Agricultural appraisal lowers the value of land owned by qualified farmers and ranchers. It values rural land based on the land's capacity to produce crops, livestock, or timber, instead of its value on the real estate market. This lower value reduces property taxes on the land."

Tue, 02/05/2013 - 13:48 | 3216823 LawsofPhysics

Not in our neck of the woods. When the local governements run out of money, they will be at your doorstep. The only thing that is assured moving forward. Enjoy that while it lasts. Some of the southern states still enjoy these types of exemptions. Our operations in Georgia and South Carolina do, but water is becoming a problem as we spar with the developers/profiteers of urban sprawl.

Wed, 02/06/2013 - 08:44 | 3219422 Red Raspberry

Illinois doesn't tax farmland at it's sale price either. It's a big problem for counties that don't have industry. The home owning property owners have to bear the burden. At the same time the farmers ejoy no sales tax on farm items plus federal subsidies. And the states promotion of ethanol in gas.

Tue, 02/05/2013 - 13:23 | 3216725 NidStyles

Would you mind adopting a 32 year old former Infantryman turned Economist and his wife?

Tue, 02/05/2013 - 13:55 | 3216850 hedgeless_horseman

Possibly.

Your wife (please send photo) would need to wear a uniform, and if you are a Keynesian economist, then you just might be qualified to help us with the horses.

Tue, 02/05/2013 - 15:11 | 3217143 NidStyles

LMAO! Not Keynesian, and my wife looks better with a tight skirt, she has a nice ass.

Tue, 02/05/2013 - 14:12 | 3216902 Anonymous peon

If adopted would not you and your wife become brother and sister............

Tue, 02/05/2013 - 14:39 | 3217005 francis_sawyer

I'm my own grandpa...

Tue, 02/05/2013 - 15:12 | 3217144 NidStyles

Doesn't matter, did you see that steak?

Tue, 02/05/2013 - 14:11 | 3216894 tango

Horseman.

Got a ribeye yesterday at Publix (just cut), added a rub of brown sugar, Pimenton, salt, garlic red wine and olive oil then grilled an hour later with baked potato - my once a month treat to myself. I remember the farm and my gripe with milk was the onion taste! Butter was incredible though. I had a Valpolicella instead of milk (lol)

Wed, 02/06/2013 - 10:32 | 3219784 Pseudo Anonym

pfft, you wish

Got a ribeye yesterday at Publix (just cut)...

you ate meat glue (http://www.weatherburyfarm.com/Meatglue.htm) (http://www.greenmedinfo.com/blog/meat-glue-your-fake-steak)

bon appetit

Wed, 02/06/2013 - 10:38 | 3219813 Pseudo Anonym

pfft, i call bullshit on your photo of steak. i can tell it is meat glue, not a real steak:

http://www.greenmedinfo.com/blog/meat-glue-your-fake-steak http://www.weatherburyfarm.com/Meatglue.htm

bon appetit

Tue, 02/05/2013 - 13:03 | 3216615 Cult_of_Reason

New USD bills
http://i45.tinypic.com/504arr.jpg

Tue, 02/05/2013 - 13:07 | 3216617 mayhem_korner

At some point, the yield on the 10-YR will start to behave like this, too.

^{(and that won't be very nice, will it Precious?)}

Tue, 02/05/2013 - 13:55 | 3216852 derek_vineyard

just as long as the 10 year styas 2-5% below the inflation rate.

inflation is the feds only goal----so people nominally see higher numbers but in real terms are surrendering their standard of living

Tue, 02/05/2013 - 13:00 | 3216618 Whiteshadowmovement

Ive heard a lot of rumblings of people planning to go long nat gas so I expect a slamdown to $2.50 fairly soon

Tue, 02/05/2013 - 13:06 | 3216647 mayhem_korner

The shale gas investors already went long natural gas over the past 5-8 years. (And it hasn't worked out too well for 'em).

Tue, 02/05/2013 - 13:02 | 3216620 Cognitive Dissonance

This is not the droids inflation you're looking for. Move along.

Tue, 02/05/2013 - 13:05 | 3216641 TotalCarp

This is starting to have a pleasant whiff of 2008 doesnt it? Commodities powering up and all...

Tue, 02/05/2013 - 13:06 | 3216650 Cognitive Dissonance

"I don't know what you're talking about." - Bernanke

Tue, 02/05/2013 - 13:08 | 3216660 TotalCarp

Nah off course not... Transitory.. Not reflected in cpi.. Housing market is solid and all that jazz.. Kunts...

Tue, 02/05/2013 - 13:13 | 3216682 Cognitive Dissonance

"Mind your own P's & Q's TotalCarp or the IRS shark will bite your fins off." - Jack Lew

Tue, 02/05/2013 - 13:20 | 3216709 TotalCarp

I seriously wonder some times if we are all gonna wake up in gitmo soon enuff. But i guess they will start with tylers, not small fish like moi.

Tue, 02/05/2013 - 13:14 | 3216688 Bay of Pigs

Where's Orly to talk about this horrible deflation?

Tue, 02/05/2013 - 13:38 | 3216787 papaswamp

Careful or a drone will be circling over your house.

Tue, 02/05/2013 - 13:01 | 3216622 Yen Cross

Keep printing you douchebag Bernanke! The 10year is up 5bps and the vix is down over 5%? This pinball machine is set on [full tilt]today!

Tue, 02/05/2013 - 13:03 | 3216636 scatterbrains

Just playing what if here.. what happens if the fed gov. cut spending by half (deflationary) at the same time announcing an official dollar devaluation (inflationary) ? Not that they would ever cut spending... voluntarily.

Tue, 02/05/2013 - 13:06 | 3216645 JethroTull

There was a guy on the radio who was blaming speculators for the hike in prices. Was he tellign the truth?

Tue, 02/05/2013 - 13:09 | 3216667 NoWayJose

So if you buy a 10 year treasury yielding next to nothing, you are an investor, but if you buy a commodity you are a speculator?

Tue, 02/05/2013 - 20:07 | 3218236 yatikto

yes. if you buy items that people use for consumption or manufacturing to horde and not use, then you are a speculator.

Wed, 02/06/2013 - 13:25 | 3220434 Col_Sanders

"Horde"?

I only play Alliance.

Tue, 02/05/2013 - 13:10 | 3216669 mayhem_korner

Even if speculators were to drive up prices, they need the liquidity to play the game. The Fed's ceaseless liquidity spigot is at the root. And this is nothing compared to what commodity inflation could be if money velocity ever picks up.

^{(but your new shoes are worn at the hee-e-e-e-e-e-ls...)}

Tue, 02/05/2013 - 13:45 | 3216822 TotalCarp

Are you missing /sarc tag or are you actually a moron or a troll???

Tue, 02/05/2013 - 13:06 | 3216651 TotalCarp

Somebody has to say it:

Fuck you bernanke. And you krugman.

Tue, 02/05/2013 - 13:08 | 3216658 NoWayJose

With the world awash in liquidity, there are few places to go. If there really is a rotation out of bonds, it all will not go to equities but rather a lot will go to commodities. Of course, with all the liquidity, there is no longer any concern about supply and demand for commodities, since the demand is just futures contracts.

Tue, 02/05/2013 - 14:34 | 3216987 devo

Great comment. Spot on. Some will go into equities (as we're seeing), though.

Tue, 02/05/2013 - 13:08 | 3216661 Motorhead

This 'dummy' sounds like that silver bear, hehe:

http://www.youtube.com/watch?v=F584p5kJL-U&feature=youtu.be

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