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PPI At 2.5% Has Biggest Annual Jump Since March 2012 On Soaring Energy Prices
If Bernanke is looking for inflation under every rock and cranny, he may have just found it in today's PPI, if only in its energy components. While the headline June number was expected to jump sequentially by 0.5%, the same as May, the final print came at 0.8%, or 2.5% on a Y/Y basis - the highest since March 2012 - driven entirely by Energy good prices, which soared by 2.9% sequentially, the most since February's 3.2%. Foods PPI jumped by a more manageable 0.2%, although no matter how, it is inevitable that producers will now pass both of these to consumers whose purchasing power, especially at the gas pump, is about to be severely tested especially with fuel prices now once again rising at the fastest pace in months.
The Y/Y change: well above 2%...
Where did this surge come from? Crude goods.
The Producer Price Index for crude materials for further processing was unchanged in June. For the 3 months ended in June, prices for crude goods moved up 1.7 percent after falling 1.8 percent for the 3 months ended in March. On a monthly basis in June, a 0.3-percent increase in the crude energy materials index and a 0.1-percent advance in prices for crude nonfood materials less energy offset a 0.3-percent decrease in the index for crude foodstuffs and feedstuffs. (See table B.)
And the chart: whoosh.
Finally, those who actually eat, will be curious to see the progression of food production by stage:
- Crude foods: Prices for crude foodstuffs and feedstuffs decreased 0.3
percent in June. In the second quarter, the index for crude foods moved
down 0.9 percent after falling 0.6 percent for the 3 months ended in
March. The monthly decline in June was led by a 3.8-percent drop in
prices for slaughter steers and heifers. Lower prices for raw milk and
unprocessed finfish also were factors in the decrease in the index for crude foodstuffs and feedstuffs. - Intermediate foods: Prices for intermediate foods and feeds climbed 0.7 percent in June following a 1.1-percent rise in the prior month. A major factor in the June increase was a 1.5-percent advance in the index for processed poultry. Higher prices for meats also contributed significantly to the rise in the index for intermediate foods and feeds.
- Finished foods: Prices for finished consumer foods advanced 0.2 percent in June following a 0.6-percent increase in May. The June rise was led by the index for meats, which moved up 4.2 percent
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Taper on (in a logical world).
https://www.youtube.com/watch?feature=player_embedded&v=RjENfMdMSRI
Snowden live interview with world leaders Q&A
It's amazing how long the strategy (print Trillions and give it to friends so they can manipulate marktets and steal moar Trillions from the 99%, all the while keeping them broke and, thus, not buying, which will keep the PPI--which doesn't account for any of the "assets" we over price--in check so as we can print Trillions and give it to friends so they...) worked. Finally those Trillions2 have nowhere left to go but into anything and everything. Pretty soon we'll see Lloyd Blankfeind at Walmart attempting to corner the market on hillbilly plus sizes and cheese doodles...
Nice plan by the so called experts.
So much for no price inflation.
wait until the apple shortage hits this fall. No bees, no apples. Where are we going to get the apples to throw away in the Michelle's school lunch program?
moar layoffs can fix this
More WARS
Higher taxes.
SNAP for all
Free Phones for all
End of story
Onward and upward for the price of goods and services, otherwise it's squeezing already tight margins.
Forward.
$5 gas coming soon
http://www.youtube.com/watch?v=tNfGyIW7aHM
See. Problems aren't hard to solve.
Funny. But this solves nothing. We need someone from ZH who will serve in Congress and is willing to die for an unwinnable cause. Are you the guy??
More negative stuff. Where is the solution? What are we going to do besides bitch and complain?
Raise prices again. Already many companies have jacked up their prices 20 to 60%.
The government, Bernanke and the Fed know they are creating inflation. The just are choosing to omit it. They want it.
"They want it." - they don't want too much. It's already higher than they're willing to admit officially. That's certainly part of why they're in a corner.
"Where is the solution?"
Non debt based money, which supply is controlled by population growth and not allowed to grow insanely like it's doing now. Violations of this policy would result in dismissal from the Congressional Committee assigned for this purpose as part of Congress' return to Constitutional accountability (the right to coin money) AND SEVERE jail time (white collar criminals HATE jail, don't ya think?) I would also say that we need at least one other major party (center), that would force the Rs or Ds into a coalition, or downright take over from them (currently extremely unlikely), in order to return politics to accountability.
The non-accountability of the US financial system, and the federal government are inextricably related and must be dealt with rather simultaneously.
This week on "How to do it" we are going to fix all the economies of the world.
First, print a lot of money
Now, give all this lovely new money to the people who don't have any money.
Problem solved.
See you next week when we are going to show you how to go back in time, chew through steel and sew a button on a fart. By-by for now.
Don't worry! This all obviously has NO adverse effect on stawks because Bernank is feeding them free money foreva!
That's negative enough to get another 10 points on the S & P today... add the UPS to it and were good for another 5.. so were going up 15 today ... grab your boots
Fart in the wind compared to whats coming.
CNBS just said this doesn't matter, cuz stawks r up....but of course!
Bernanke and the rest of the Fed members want massive inflation, they will just cover it up with government stats.
The Canadian CPI came in at 1%.
Whoever remembers that this is a COLLATERAL BASED SYSTEM, will easily get to the conclusion that:
- Fresh new money always and at anytime looks for collateral.
- since fresh new money is going to primary dealers and other big institutions, they are using crude oil and commodities as collateral, since they can't consume it.
- currently crude oil is being purchased and stored to be used as collateral thus starving the economy for energy.
- same happened in 2007-2009 which led to George Bush giving the order to crap the crude oil price and the whole CDS, bond and stock market with it
Same order is about to be given now by the current useless president. Economy is dead and only crude oil at $40-50 resurrects it, absolutely nothing else.
Right, thus proving that everything is just a farce and 'price discovery' is and always has been a fantasy....because when things aren't going their way they just change the rules.
a recent post explained the economics of front running in just about everything, financial funds now buy ahead of processors, distributors. the exchanges are managed by USG to keep prices down, so the funds buy and store the commodity. they learned about front running from the Fed which buys bonds to keep the price higher.
Bush used the SPR to play with inventory numbers (count borrowed oil against inventory) the criminal Paulson then had his Goldman friends rejigger the commodity index WITHOUT gasoline. funds who mimiced that index dumped their gasoline futures and the price fell like a rock.
but crude oil at 50 will destory this economy, specifically assets values of DOW member Chevron for instanc. and assets tend to move as a groupl, you cant destroy oil prices without killing housing (asset values) granted real economic growth will occur but that will destroy Washington, and they managed to avoid it for five years without anyone calling them on it.
the fact oil is higher shows that TAPER is on. they've achieved their goal of saving Americas rich bankers, which was an evil, stupid, and criminal policy in the first place. the value of oil is now primarily in the cost to deliver it. like printing money at some point you have to print money in order to pay for you money printing operation. intrinsic or commodity value of oil Zero, cost to deliver?? name your price.
how would you like a free house, with a $1000 a month in property taxes maintenance and utilities to operate?
AGREE with everything except for crude at 50 would kill the economy
it will kill big banks, but it will hugely help the economy
"but crude oil at 50 will destory this economy, specifically assets values of DOW member Chevron for instanc. and assets tend to move as a groupl, you cant destroy oil prices without killing housing (asset values) granted real economic growth will occur but that will destroy Washington, and they managed to avoid it for five years without anyone calling them on it."
You're conflating chaff with wheat.
Oil suddenly $50 in today's dollar would be the most bullish thing that could possibly happen short of invention of cold-fusion reactors with >50 EROEI small and cheap enough for home installation combined with a comet sent from heaven to destroy the EPA.
No worry, Bernank says it is temporary. Alas, he has been saying that for five years and most of my daily basics have doubled in price since then. But somehow, I really really really don't think he is a liar.
Hmmmmmm...
"The monthly decline in June was led by a 3.8-percent drop in
prices for slaughter steers and heifers."
"Higher prices for meats also contributed significantly to the rise in the index for intermediate foods."
Who did the analysis here the BLS?
edit: forgot the punch line! The June rise was led by the index for meats, which moved up 4.2 percent
According to CIBC World Markets:
The world remains a place where enormous amounts of debt just keep stacking up. Paying this debt back is constantly believed to be less of an issue given the crucial assumption that economic growth rates in the order of 3% to 5% will return AND will be sustainable. Even if it does, it must be noted that “total payback” of the debt could be unlikely to ever be achieved. At some US$18 trillion of total debt in the U.S., it would take 14,400 million ounces of gold or some 160 years’ worth of annual global gold mined supply (at the current price of some US$1,240/oz. and at current global output of some 2,800 tonnes per annum) to pay this down. At the same time, gold production is about to take an almighty knock and we won’t be surprised to see as much as 25% less gold output in the next five years.
Still, much of this precarious (let’s just stop the debt load from growing) position is critically dependant on very low interest rates being maintained – once rates start moving higher, debt repayment schedules quickly blow out, while the value of bonds, in particular government bonds, starts to decline. The current dramatic decline in the value of government bonds will already see banks’ balance sheets shrinking again, with possible resultant liquidity squeezes across the globe. Euro sovereign debt costs are already up dramatically and Italy is seemingly also sitting with an apparent +30 billion euro loss in the derivatives market…
This could very quickly turn out to be a very bad scenario, but the point, as far as we are concerned, is really that it does not even need to get to this for the markets to start realizing that currencies will have to depreciate much further – we believe this to be a crucial mechanism for delivering lower sovereign debt levels long term. Gold will be the currency that continues to benefit in the longer term. So, making a positive case for the gold price is not too difficult – particularly if inflation becomes a problem much sooner than everybody currently expects.
The real problem, unfortunately, is that all of this argument is dependant on data that will only become apparent much later down the line. Right now, nobody is willing to go against the Fed. That simply means bonds and gold are both getting the “chop” because the Fed is signaling a return to stronger economic growth – leading to a stronger U.S. dollar.