I get your point, I just decided to go off on a tangent. 😉
But I do think it is hard to tell from our own personal experiences. And it’s also hard to tell in the short-term.
That data about milk is good example. Over the long-term national milk prices haven’t risen much at all, but in the short-term – here in SD – for some reason milk has risen substantially in the past year. What does it mean? Maybe it’s an indication of the start of a new trend. Or maybe it’s an “outlier” (the distribution of year-over-year price changes for single goods, esp. agricultural goods is probably pretty wide.)
Watching inflation is like watching your hair grow. One day you just realize it’s longer. But that doesn’t mean it all happened in one day.[/quote]
“Dairy Farmers of America Inc. Dairy Farmers of America Inc.
Latest from The Business Journals
Legal news and notes: Settlement pops up
Dairy Farmers of America takes over Schreiber facility
Dairy Farmers of America buys Connecticut dairy
Follow this company is a target of a class-action lawsuit alleging that dairy companies fixed the price of milk by slaughtering cows.
The suit, filed this week in federal court in California, alleges that members of the dairy trade group Cooperatives Working Together — of which DFA is a member — killed more than 500,000 cows between 2003 and 2010 to reduce the supply of milk and inflate its price.”
“—>It’s so expensive to produce milk right now — due to low demand and high feed costs — that farmers are being paid to slaughter dairy cows in order to “shift the pain to consumers,” says Bloomberg.”
Note that one of the main factors that contributed to the farmers’ culling of their herds was the rising commodities prices (primarily feed, but rising land prices and water prices affected them as well).
IMHO, the rising prices ARE due to the artificially suppressed interest rates of the past ~10 years. Traders have been getting into commodities because they believe inflation is coming as a result of all this “cheap” money. This creates a positive feedback loop…as more people fear inflation, more people stock up on (or “invest” in) things that they believe will rise in price the most — basic goods that people need to survive, because they don’t have much of a choice WRT buying these goods (like housing, food, fuel, etc.). I believe we are at the tail end of a giant credit/central bank-fueled bubble that is desperately trying to deflate. The entire financial system is wobbling.
