The Dow fell today — strictly speaking, it continued a slide from last week’s multi-year highs — along with the other indices and Treasuries on news that the Consumer Price Index rose more than expected, an annual rate of 5.1%. Even taking out food and energy, the core rate is 3%. These figures are both up substantially over last year. Of course, ShortWoman readers may remember this paragraph:
Finally, while you may be aware that Gas and Oil prices are at or near all-time highs you may not be aware that other commodities are also at high prices. Commodities being the building blocks of pretty much anything you can buy, this makes inflation almost a sure thing. Gold is also at multi-decade highs. Remember, investors usually buy gold when they are worried that all heck is going to break loose in the economy.
Seriously, how can anyone have not expected some inflation? The stuff companies use to make other stuff is at record high prices. The fuel used to power the machines that make stuff is at high prices. The fuel used to get the stuff to the store where you can buy it is at high prices. Are we surprised that there is inflation, or are we surprised that the Department of Labor can no longer hide inflation by rigging the numbers?
We might be forced to admit that the Emperor is nude. To think how recently financial news shows were talking about the Dow hitting a new record.
Fair warning, the CPI numbers pretty much mean the FOMC will have little choice but to raise interest rates at their June meeting. For pity sake, if you haven’t refinanced anything with a floating interest rate, will you please fix that?
In closing: Peruvian Princess Warrior! As “organic” food becomes more popular and more readily available, are standards for organics being maintained? Yet another article about the NSA phone record database. My favorite tidbits: yes the FISA court was told this would happen, but they didn’t actually approve it; Verizon swears they aren’t involved; and this choice quote from a Republican Senator, “For as long that I know of, the government has always had an opportunity to look at business records without a court order,” he said. “Business records are not personal property.” Alright, then the Senator won’t mind if we begin by looking at his business records? Apparently it’s ok to live in sin if you have only one kid. But have more than one, and this town thinks it can evict you. And a final bit of absurdity, “New federal guidelines ask all females capable of conceiving a baby to treat themselves — and to be treated by the health care system — as pre-pregnant, regardless of whether they plan to get pregnant anytime soon.” Boy, next thing you know it will be illegal to sell booze to any woman of childbearing age.
Great work!