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Politics : Dutch Central Bank Sale Announcement Imminent?
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To: sea_urchin who wrote (20408)3/18/2004 7:05:49 PM
From: philv  Read Replies (1) of 81944
 
You're not missing anything. There are several possibilities, or a combination thereof.

1. producers are absorbing raw material costs totally.

2. price inflation is cooked in place....but large lag time.

3. inflation figures are jiggered.

The first possibility may be partly true but not in its entirety because there just isn't that kind of profit in finished goods. Wall street keeps bragging about the increasing corporate profitability. So, what choices are there to raising prices? The raw material input would have to be offset by some other efficiency which I just don't buy.

The second possibility is the one I believe. Price increases in finished products due to raw materials is in the pipeline. However, that doesn't mean run away inflation because there there aren't any jobs, and wage increases are non-existent. The FED of course realizes that and therefore they keep interest rates low. Price increases to come without wage inflation spells a lower standard of living.

The third possibility should be called a probability. Just like Corporate accounting, all is well if you don't include this or that!

There is one last possibility, and that is that the CRB is going to crash. If that happens, watch out for the big D word. The FED will be dropping money from helicopters before they allow a Depression.
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