Jim,
In the news today, Dow Chemical is announcing a 25% price increase, following a 20% increase three weeks ago. Since they produce the feedstock chemicals for almost every industry on earth, this should be a great indicator of what’s coming. – ZBM
JWR Replies: Ay carumba! Dow produces a huge variety of chemicals and compounds that go into everything from fertilizers to plastics. This is an alarming indicator of consumer price increases in the near future. When paired with fuel price jumps, this becomes downright frightening for near-future food prices at the consumer level.
At this point, precious metals investing and a systematic Alpha Strategy (investing in practical tangibles, in anticipation of future price inflation) make even more sense. This based on wise 30-year old advice from author John Pugsley. Echoing Pugsley’s writings, I have been recommending “tangibles, tangibles, tangibles”, for many years now. This strategy is really starting to pay off. Ammo stored in your basement in now much better than money in the bank. (In fact, it is much better than almost anything denominated in US Dollars, which will soon positively melt in the heat of sustained double-digit inflation.) If you have been hesitating, stock up, soon. Every week that you delay will only cost you more!
OBTW, for any of you that feel smug holding Euros, watch out! This inflation will most likely hit globally, so your investments won’t be safe denominated in Euros, either.
Speaking of price inflation, reader ADS passed along the following along:
Score Board — percentage change for the year, so far, in various items:
Crude oil up 42.5%
Ethanol up 20.7%
Heating oil up 43.9%
Natural gas up 76.5%
Unleaded gas up 39.5%
Cattle up 1.0%
Corn up 58.8%
Soy beans up; 26.4%
Wheat down 2.2%
Coffee up 5.9%
Aluminum up 32.7%
Copper up 25.7
Platinum up 33.4%
Gold up 6.0%
Silver up 13.4%.
S&P 500 down 10.24%
Frankfurt DAX down 18.32%
London FTSE down 12.23%
Paris CAC down 19.64%
Hong Kong Hang Sang down 18.33%.
Tokyo Nikkei down 9.47%
Singapore Straits down 14.04%.
Seoul Composite down 9.57%
Sydney All Ordinary down 15.76%
Taipei Telex down 7.40%
Shanghai Shanghai B down 44.42%
You gotta love this one: Outside the Shanghai exchange people were picketing and protesting. It seems they wanted their money back.
One addenda to the data from ADS, from JWR: The reason that beef prices are remaining low is that ranchers are currently dumping cattle onto the market, because of high feed prices. Once that beef has worked its way to market, the remaining cattle (on the hoof) will jump up in price. So we can expect a huge spike in beef prices in 12 to 18 months. Buy your canned and freeze dried meats before those price increases!