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

To: CalculatedRisk who wrote (58153)	4/13/2006 11:29:17 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

The April 4th Contrary Investor has a chart and discussion on the CASS freight expenditure index showing the ability of transports to easily pass on higher fuel costs, plus plenty of extra. In retrospect, the big play of the last year or so, was to find areas with large increasing input costs, and buy them anticipating that they could just raise their prices in turn by at least that amount. Even I have really underestimated how easy passing through inflation has been. It's been a boom period for inflationary pass through. Real inflation may be approaching double digits? Notice how large the increases in government expenditures (and receipts) has been? Are they really buying that many more units of things? Kind of doubt it, they are just absorbing very large inflationary pass throughs as well.