Kyros, have you recently looked at the PPI for crude materials? well, it's 12-month rate-of-change is at a 26-YEAR HIGH. the CRB is up 30% from its late '98/early '99 lows...other commodities indices with less weight in ag commodities are even perkier. however, SO FAR intermediate and finished goods PPI has resisted the cost push to a great extent, which imo can be largely attributed to hedonic indexing (it has NEVER before behaved in this way when crude goods were rising so strongly, only since the new methods were fully implemented can the non-reaction of later stage PPI components and CPI be observed), but anecdotal evidence sees building materials producers raise prices, transportation companies raise prices, even poor old Timet has raised prices already TWICE in recent months.i'm certain someone can come up with a load of anecdotal evidence of a similar nature...the resistance is breaking down. and yet - i can GUARANTEE you, these in some cases quite hefty price increases will NEVER find their way into overall PPI and CPI.
of course, industrial overcapacities do also play a role in keeping finished goods prices relatively tame, and i would generally agree that the inflation uptick is CYCLICAL in nature, and will eventually give way to the larger secular deflationary trend again.
and again, your personal experience (with the weight you are giving telecommunications and information related expenses) is NOT the experience of the average person. the average person doesn't even post here.
all evidence points to the fact that we are deceiving ourselves in order to keep government's COLA indexed expenses in check. shelter , food, energy, medical expenses have clearly taken a big bite out of the consumer's pocket - how come, if prices are supposed not to have gone up? you should read the BLS releases in detail, they're a HOOT! right after NG had just jumped by ANOTHER 50 % on top of its initial 50% rise, BLS trumpeted a lower-than-expected PPI/CPI due to FALLING NG prices. what happened? 'seasonal adjustment' happened. they basically said, where it went, doesn't matter, because THIS is where it SHOULD HAVE GONE. how on earth is this measuring inflation??? |
