Monday, February 21, 2011

Winning The Future

Or is it back to the future.

Here comes 1979 all over again........

A number of economic indicators have been hitting their best levels since before the financial crisis of late, but you have to go way back to January 2004 for the last time the Philadelphia Federal Reserve’s monthly manufacturing gauge was as strong as the reading issued Thursday.

The Philly Fed came in at 35.9 for February, way above estimates and the 19 seen in January. That encouraging signal came with the morning’s second hint of inflation though, as the prices paid index of the report jumped to 67.2, from 54.3 in January, while prices received increased at at a slower pace — to 21 from 17.1.

Thursday morning’s report came after the Labor Department’s consumer price index showed inflation on the consumer level accelerated somewhat in January, rising 0.4% and 0.2% on a core basis when stripping out food and energy. Earlier this week the producer price index was up 0.8% (0.5% core). (See “Consumers Get A Whiff Of Inflation.”)

Taken together, the reports indicate that businesses face challenges in passing along the well-documented rising prices of commodities like oil and other raw materials to consumers. Companies are likely to take additional steps to that end though. J.M. Smuckers said in its earnings release Thursday morning that it will hike prices to combat higher costs, while beverage maker Dr. Pepper Snapple echoed recent statements from rivals Coca-Cola and PepsiCo acknowledging the challenge of offsetting growing costs with higher prices.

So class let's go back to how this mess started. The Obamunist and their Central Committee decided that using oil was bad. So they quit allowing American companies to drill for it.

Since there is less supply, the price goes up.

But don't worry. Because the Obamunist Central Committee thought that it would be a good idea to pay farmers to grow corn; not for food.........but for fuel.

As a result, we're drilling less oil which means higher fuel prices and everything else that fuel supports in our economy. But we're also reducing the amount of food in the market place which results in higher food prices.

Now class, let me ask you a question.......... who does inflation hurt more. Rank them accordingly.

1) A pediatric radiologist?
2) A Wall Street investment banker?
3) The poor working shlub?
4) A starving Somalian?


1 comment:

Anonymous said...

I wonder just how many corn farmers run their machinery on ethanol and how many think it is too expensive. If there is a farm that does run on ethanol, how many gallons of ethanol is burned to produce a bushel of corn. Would it require more than a gallon of ethanol to produce a gallon of ethanol? I bet it does.