[quote=martink110]cereal boxes getting smaller and even the bag inside is smaller, yet the price is higher. 2.50+ for a roll of paper towels wth?? Last year Bud 18 packs were $12.99 now $18.99(yeah I know buy on “sale”) etc.
Take a look at the commodities futures and decide if there is inflation coming or not. http://finviz.com/futures_charts.ashx?p=w1
Paraphrased from another blog, but I agree.
“Overpriced assets continue to fall (homes, cars, durbable goods, etc.). Relatively undervalued assets that saw little price appreciation from 1980-2002 such as commodities continue to rise. These cycles come and go. Interest rates have been hopelessly skewed (or screwed) by $213 TRILL in US bank otc interest rate swaps created over the past 20 yrs. This has caused massive malinvestment in things that should never have been….and a lack of investment in things that should have been. If you’re waiting for higher interest rates to tell you there is inflation in commodity prices, it might be a long wait. Don’t count on China and Asia in general to continue to allow our inflation to be exported to them. That worked in the 1980’s and 90’s just fine. But as Asia continues to grow their industrial base expect them to continue to require a much higher percentage of their goods and services to stay home. And as this growth occurs, so do wages and cost of living which means cheaper exports for the US becoming a thing of the past, hence higher priced imports, especially if tariffs are added.”[/quote]
This is a VERY good point (and it’s why I detest derivatives so much). It means all the usual signals are malfunctioning. Nobody knows what’s going on because everything is dramatically mispriced as a result of these derivatives. If derivatives were to be banned tomorrow, it would be interesting to see how prices of everything would shift. IMHO, huge moves would occur.
