In The Meantime, Food Prices Jump The Most Since 1974

With so much going on in the geopolitical/logical arena, it is easy to forget that there is an actual underlying economy which the Fed in its endless efforts to hike the Russell 2000 is doing all it can to destroy. Earlier we pointed out, when we looked at the PPI number, that the finished consumer food inflation index surged by the highest percentage in 37 years. This fact bears repeating. So we leave it to John Lohman to summarize briefly and succinctly as he is wont to do, how Americans will soon have no choice but to indeed eat their iPad 2 as soon as Benny unleashes QE3, which is now inevitable, or sooner.

It’s understandable that this morning’s spike in finished consumer food prices received little attention.  What with a mini-crash in housing starts, spent fuel pools running dry, USDJPY breaking the BOJ’s strike price of 80, and busted underwater POMO trades, there was no shortage of distractions.

Nevertheless, anytime an ecostat comes in at the 4th highest reading in its 64 year history, it’s worth taking note.  As shown in the chart below, the finished consumer foods component of the Producer Price Index jumped 3.9% in February alone.  But not to worry.  The core PPI only rose 0.2% in the month and ‘inflation expectations [among blue chip economists] remain subdued’.  Paging Mr. Dudley…