Posts Tagged ‘inflation’

French Prez Sarkozy warns of soaring commodity prices

AFP: French President Nicolas Sarkozy called Tuesday for tighter controls on the speculators he blames for soaring food and energy prices threatening global growth.

Saying the world had “worked extremely hard” to revive growth in the aftermath of the global financial crisis, Sarkozy said “one of the main threats to growth is the rising cost of commodities.”

The president has said he plans to use France’s chairmanship of the Group of 20 top economies to push for regulations to curb speculative trade in the commodities markets but this has met strong resistance from suppliers such as Brazil and Argentina who have benefited from high prices.

Sarkozy, speaking at the invitation of European Commission president Jose-Manuel Barroso, said “the G20 nations are the first concerned by this issue and it is up to them to install conditions for sustainable growth.”

The same rules applied to curb financial market speculation needed to be used to crack down on commodities prices which threaten inflation and social tensions.

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INFLATION! Your Memorial Day BBQ will cost you 29% more this year than last year

U.K DAILY MAIL: One sausage or two?

You may be lucky to get half at this weekend’s Memorial Day cookout, which is set to cost 29 per cent more than last year, thanks to inflation.

Those thinking of hosting a BBQ – even a modest one – can expect to fork out an extra $45 on food to serve a dozen guests.

The total cost comes to $199, or around 29 per cent more than last year… and that’s before soda and alcohol, according to the latest data for metro New York.

Lettuce has sky-rocketed 28 per cent since last year’s traditional BBQ, while an ear of sweet corn is now 50 cents, up from 20 cents last year.

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Dreaded inflation accelerates (predictably). Food prices near record high.

This is what happens when the Fed prints money like confetti

BLOOMBERG: World food prices rose to near a record in April as grain costs advanced, adding pressure to inflation that is accelerating from Beijing to Brasilia and spurring central banks to raise interest rates.

An index of 55 commodities rose to 232.1 points from 231 points in March, the United Nations’ Rome-based Food and Agriculture Organization said in a report on its website today. The gauge climbed to an all-time high of 237.2 in February before dropping 2.6 percent in March.

The cost of living in the U.S. rose at its fastest pace since December 2009 in the 12 months ended in March, the same month in which Chinese consumer prices rose by the most since 2008. The European Central Bank raised interest rates on April 7, joining China, India, Poland and Sweden in a bid to control inflation partly blamed on food costs. Costlier food also contributed to riots across northern Africa and the Middle East that toppled leaders in Egypt and Tunisia this year.

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CLAIM: The Fed will make sure Obama is reelected in 2012

CNBC: As we approach next year’s presidential elections, the chances of President Barack Obama being ousted by a rival from either side of the political divide are low, according to Thanos Papasavvas, the head of currency management at Investec Asset Management.

“History is very much on the side of the incumbent President and unless we have a double dip recession with a significant increase in unemployment I don’t believe Obama will lose 2012,” Papasavvas said in an interview with CNBC on Thursday.

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Bernanke: Get Set for the INFLATION

CNBC: In his first regular news conference, Federal Reserve Chairman Ben Bernanke said the central bank was continuing its stimulus policy because it was projecting slower growth in the economy with only a modest uptick in inflation.

Wednesday’s event marks the first regularly scheduled news conference by a Fed chairman in the central bank’s 97-year history. The Fed cut its growth estimate for 2011 to between 3.1 percent and 3.3 percent from a January forecast of 3.4 percent to 3.9 percent.

The Fed also raised its estimate of inflation this year to a range of 2.1 percent to 2.8 percent, taking into account a recent surge in oil prices. However, it bumped its core inflation forecasts only marginally to a 1.3 percent to 1.6 percent range.

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Skyrocketing gas and food prices are pushing economy back into recession

CNBC: The combination of rising gasoline prices and the steepest increase in the cost of food in a generation is threatening to push the US economy into a recession, according to Craig Johnson, president of Customer Growth Partners.

Gas station in San Francisco.

Johnson looks at the percentage of income consumers are spending on gasoline and food as a way of gauging how consumers will fare when energy prices spike.

With gas prices now standing at about $3.90 a gallon, energy costs have now passed 6 percent of spending—a level that Johnson says is a “tipping point” for consumers.

“Energy is not quite as essential as food and water, but is a necessity in today’s economy, and when gasoline costs more than bottled water—like now—then it takes a huge bite out of disposable spending,” he said, in a research note.

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WALMART chief warns of ‘serious’ inflation in coming months

USA TODAY: U.S. consumers face “serious” inflation in the months ahead for clothing, food and other products, the head of Wal-Mart’s U.S. operations warned Wednesday.

The world’s largest retailer is working with suppliers to minimize the effect of cost increases and believes its low-cost business model will position it better than its competitors.

Still, inflation is “going to be serious,” Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY’s editorial board. “We’re seeing cost increases starting to come through at a pretty rapid rate.”

Along with steep increases in raw material costs, John Long, a retail strategist at Kurt Salmon, says labor costs in China and fuel costs for transportation are weighing heavily on retailers. He predicts prices will start increasing at all retailers in June.

“Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along,” Long says. “Except for fuel costs, U.S. consumers haven’t seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory.”

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PETER SINGER: Inflation, printing money like confetti will likely trigger next financial crisis

JAMES FREEMAN-WALL STREET JOURNAL: At the height of the housing bubble, hedge-fund manager Paul Singer was shorting subprime mortgages. By the spring of 2007, he was warning regulators on both sides of the Atlantic that the world was facing a major financial crisis.

They ignored him. Now the founder of Elliott Management says the biggest banks are headed for another credit meltdown. Among the likely triggers for the next crisis, Mr. Singer sees one leading candidate: Monetary policy “is extremely risky,” he says, “the risk being massive inflation.”

In some areas gas prices have reached $4 per gallon, and now Americans must brace themselves for higher grocery bills. This week the Labor Department reported that February wholesale food prices posted their sharpest increase since 1974. News like that has driven Mr. Singer to the history books: He treats visitors to his 5th Avenue office to a copy of a 1931 treatise on German currency debasement, Constantino Bresciani-Turroni’s “The Economics of Inflation.”

Mr. Singer—who launched Elliott in 1977 and has delivered a 14.3% compound annual return (compared to the S&P 500′s 10.9%)—is not comparing today’s Federal Reserve to the Reichsbank of the early 1920s. Rather, he’s once again warning financial regulators. This time the message is: Don’t take for granted investor faith in a major currency.

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U.S. Cost of Living hits record high. CPI rose at 6% rate in Feb (annualized)

CNBC: One would think that after the worst financial crisis since the Great Depression, Americans could at least catch a break for a while with deflationary forces keeping the cost of living relatively low. That’s not the case.

A special index created by the Labor Department to measure the actual cost of living for Americans hit a record high in February, according to data released Thursday, surpassing the old high in July 2008. The Chained Consumer Price Index, released along with the more widely-watched CPI, increased 0.5 percent to 127.4, from 126.8 in January. In July 2008, just as the housing crisis was tightening its grip, the Chained Consumer Price Index hit its previous record of 126.9.

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