Corn prices peaked in April and began coming down in May, June, and July... but all that may be over. According to Bloomberg corn prices may be set to drive up inflation. Recently they've been running a series of articles on Corn Prices: Their article US Crop Tour Stokes Fears of Looming Corn Shortage says, "Parched soils. Grasshopper infestations. Scorching heat. Hail damage. This year’s US corn crop has been put through the wringer... Things are so bad that scouts currently on a four-day tour through the Midwest are finding plants that are stunted and browning. Scores of fields have visible damage from pests. Cobs of grain are unusually small, and sometimes, stalks aren’t producing the … [Read more...]
Two Ways to Destroy the Economy: Hyperinflation and Central Planning
In the following video, Professor Engelhardt says that if he were a "Super Villain" and wanted to destroy an economy, there are two ways that seem obvious to him. The first is "Central Planning", aka. "Socialism" and the Second is Hyperinflation. Since he would be a lazy super villain, he says Central Planning is "too much work", so he would choose hyperinflation. He goes on to say that hyperinflation is difficult to define; even Economists like Murray Rothbard and Ludwig Von Mises used different definitions of plain inflation depending on the context. Generally, inflation was originally defined as an "increase in the money supply in excess of the increase in the demand for money". More … [Read more...]
Gas Prices Fall, Bringing Down July 2022 Inflation
The Bureau of Labor Statistics reported that in July 2022, Annual Inflation fell from 9.1% to 8.52% Inflation Summary: July 2022 Annual Inflation fell to 8.52% CPI Index declined slightly from 296.311 to 296.276 Monthly Inflation for July was -0.01% down from 1.37% in June. The next release is on September 13th July 2022, Annual Inflation was 8.52%. Jan. 2021 -- 1.40% ** Jan. 2022 -- 7.48% ** Feb. 2022 -- 7.87% ** March 8.54% Apr. 2022 --8.26% ** May 2022 -- 8.58% ** June 2022 -- 9.06% ** July 2022 -- 8.56%% Crude Oil prices averaged over $107.10 per barrel for June and averaged $93.12 in July. While according to the AAA, Regular Gasoline prices averaged $4.99 … [Read more...]
Total U.S. Cumulative Inflation
How Much Inflation have we had since 1913? Just like compound interest, "compound inflation" grows faster and faster. So, even though the average annual inflation since 1913 has been "only" 3.24% PER YEAR. After over 100 years, the total cumulative inflation becomes astronomical. See Average Annual Inflation Rates by Decade to see how each decade stacked up. As you can see from the chart below, compounding something for over 100 years at 3.24% will result in well over 2000% inflation. The Consumer Price index (CPI-U) for January 1913 was 9.8. The CPI-U for July 2022 was 296.276. This means that something that cost $9.80 in January 1913 would cost $296.28 in July of … [Read more...]
Have Commodity Prices Peaked? Does That mean Recession?
A recent article from Elliottwave International suggests the possibility that Aluminum, Copper and Zinc may have peaked on March 7-8th. They included the following chart... And the following commentary: The Goldman Sachs Spot Commodity Index hit a high on March 8, and so did the Bloomberg Commodity Index. Crude oil futures made an intraday high on March 7 and a closing high on March 8. Platinum reached a closing high on March 7. Commodity prices are leading indicators of overall inflation since they are components of every consumer good. Another major component affecting all other prices is gasoline and oil. According to AAA, regarding the price of gasoline... National Average … [Read more...]
2022: Highest June Inflation Since 1941
The Bureau of Labor Statistics reported that in June 2022, Annual Inflation rose to 9.1% Inflation Summary: Annual Inflation Rose from 8.58% in May to 9.06% in June CPI Index rose from 292.296 to 296.311 Monthly Inflation for June was 1.37%, the highest June since 1941 The next release is on August 10th June 2022, Annual Inflation was 9.06%. Jan. 2021 -- 1.40% ** Jan. 2022 -- 7.48% ** Feb. 2022 -- 7.87% ** March 8.54% Apr. 2022 --8.26% ** May 2022 -- 8.58% ** June 2022 -- 9.06% Crude Oil prices averaged over $100 per barrel for June. While according to the AAA, Regular Gasoline prices averaged $5.016 in mid-June. Monthly Inflation At 0.84% (January), 0.91% … [Read more...]
July 4th Cookout Will Cost You 17% More in 2022
Whether you call it a "cookout", "grilling", or a "barbeque", cooking over an outside fire with family and friends on Independence Day is an American tradition. Every year the American Farm Bureau tracks how much the July 4th Cookout family gettogether is going to cost and it's no surprise that the cost is up this year. But what may be a surprise is how much it is up! According to the U.S. Bureau of Labor Statistics (BLS), annual inflation is 8.6%. But according to the Farm Bureau survey the cost of your July 4th Cookout will cost you 17% more in 2022. It is always nice when we can get some independent data on prices. Every year Farm Bureau enlists volunteers from around the country to … [Read more...]
Surprise, Surprise, The FED Raises Rates by .75%
At its June 15th meeting, the FED announced that it will be raising rates by ¾%. Up until last week, this would have been a big shock to the market. But despite the imposed FED silent period leading up to their Wednesday meeting "somehow" journalists from all the major financial publications published remarkably similar articles predicting a 0.75% increase in the FED funds rate. Prior to this leaked guidance, the consensus was that the FED would increase rates by ½% but last week's higher-than-expected inflation report threw a wrench into the works. Everyone is making a big deal out of the fact that this is the first raise of that magnitude since 1994. And that it will double the FED … [Read more...]
Inflation Takes a Bite Out of Your Food Budget
The Bureau of Labor Statistics reported that in May 2022, Annual Inflation Rose. May Food Inflation Breaks Record: The combined food index (at home and away) increased 10.1 percent for the 12-months ending May, the first annual increase of 10 percent or more since the period ending March 1981. Food at home rose even more... 11.9% over the last 12 months... while food away from home "only" rose 7.4% over the last year. All six major grocery store food group indexes rose in May. The index for dairy and related products rose 2.9 percent, its largest monthly increase since July 2007. The index for nonalcoholic beverages increased 1.7 percent, and the index for other food at home rose … [Read more...]
Inflation Adjusted Gasoline Hits New High
June 10, 2022 Update: AAA says the national average is now almost $5.00 a gallon (and much higher in places like California). That moves the blue dot on the chart below up and prices are now well above inflation-adjusted peaks! June 2, 2022 It's no secret that gasoline prices are skyrocketing. However, a couple of months ago we said that although gas prices were high and rising, they still weren't at record levels when looked at in inflation-adjusted terms. But all that has changed now as gasoline prices continue to climb upward. Today the AAA reported the highest national gas prices they have recorded. Although this is a significant development, all sorts of … [Read more...]
