Another Look At Inflation: Cotton Up 44% YTD - One Percent Per Day

Earlier, we got the January PPI number telling us that things are still somewhat under control on the inflationary front. Perhaps. Perhaps not. Cotton begs to differ. In a month and a half, cotton has risen 44%: since there have been about 44 days in 2011, that means about a 1% a day. Since our first warning back in September, when the world's most worn commodity passed $1, cotton is up 95%. Annualized, the YTD move in cotton is 1,512%. We are confident clothing makers and retailers have extensive hedges in place to counteract a move that will send margins negative shortly unless there is an appropriate hedge offset, or corresponding jump in prices. Either way, BTFD.

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