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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (8467)	2/23/2004 8:21:04 AM
From: russwinter	Respond to of 110194

Here's an essay that reviews the various economic theories about commodity prices and inflation. geocities.com It runs the gamut: Beckerman and Jenkinson theorized that commodity prices (not wages) dominates the cycle. Gilbert countered that commodity prices only accounts for about one-third of inflation (or deflation). Whatever the case may be, I have in my research found no credible economist that blows off or ignores commodity or input inflation, in quite the way (only give some "dog ate the homework" lip service to energy impacts) that Berneke and Greenspan do. That's why I think the Fed is practicing crackpot monetary policy. Apparently the market is buying into it too. I've looked at (and posted) the most on food products on this general topic. Direct farm costs account for about 19% of finished product. However, you have another 8% for energy and transportation, and that's indirectly related to an input commodity. Then you have another 8% for packaging, and that's going to be affected by input commodity. It just adds up, and becomes real money after a while. So much so, that frankly, I'm perplexed by your question.