Wednesday , June 23 2021
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Tag Archives: Producer Prices

Copper Corroding PPI

Yesterday, lumber. Today, copper. The “doctor” has been in reverse for better than two months now, with trading in the current session pounding the commodity to a new multi-month low. Down almost $0.19 for the day, an unusual and eye-opening loss, this brings the cumulative decline to 9.2% since the peak way back on May 11.Is this just another modest fluctuation in a market just getting started on the upside (super-cycle)? After all, going back a few months earlier the Fedwire mess (Feb 24)...

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Scorching, Blistering, Highest In A Decade! Powell’s The Voice of Reason Here?

If there is one thing Economists understand very well, it’s mathematics. This is practically all they do, and all that means much to their discipline. If there’s one thing Economists don’t seem either competent with or interested in, it’s the economy. The math is supposed to match the other’s reality, yet rarely does.There are times, however, when simple calculation is sufficient and (figuratively) on the money (literally, that is the whole other story).Such was the case around 2011 and...

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Our Global Inflation Tour Chock Full of Normal

It really is about abnormality. What I mean by that is, contrary to popular imagination fed by the Fed and other central banks, ever since 2008 the inflation paradigm has changed. The first global financial crisis (GFC1) has proven time and again how it wasn’t a one-off, and since it was a monetary breakdown (global dollar shortage) that’s been permanent the entire global economy involuntarily transformed from modestly inflationary to durably disinflationary (and at times and in some places...

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Two Seemingly Opposite Ends Of The Inflation Debate Come Together

It’s worth taking a look at a couple of extremes, and the putting each into wider context of inflation/deflation. As you no doubt surmise, only one is receiving much mainstream attention. The other continues to be overshadowed by…anything else. To begin with, the US Bureau of Labor Statistics reported today that US import prices were up on annual basis for the first time in some time. Rising in January 2021 by 0.9% year-over-year, this was actually the fastest increase in almost three and a...

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If the Fed’s Not In Consumer Prices, Then How About Producer Prices?

It’s not just that there isn’t much inflation evident in consumer prices. Rather, it’s a pretty big deal given the deluge of so much “money printing” this year, begun three-quarters of a year before, that consumer prices are increasing at some of the slowest rates in the data. Trillions in bank reserves, sure, but actual money can only be missing. OK, fine. What about commodities? If the Fed’s monetary fires haven’t fed through to corporate pricing power for the stuff going out the door,...

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The Prices And Costs Of What Xi Believes He’s Got To Do

It does seem, at first, a huge contradiction. On the one hand, what we know so far of China’s 14th 5-year plan apparently will lean heavily on new technologies not-yet invented to rescue the country’s economy from the pit of de-globalization the eurodollar system had thrown it into years ago. If the global economy isn’t going to recover, and there’s absolutely no sign that it will, then the one seemingly logical (though far-fetched) way forward would be if the Chinese economy converted...

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If Trade Wars Couldn’t, Might Pig Wars Change Xi’s Mind?

Forget about trade wars, or even the eurodollar’s ever-present squeeze on China’s monetary system. For the Communist Chinese government, its first priority has been changed by unforeseen circumstances. At the worst possible time, food prices are skyrocketing. A country’s population will sit still for a great many injustices. From economic decay to corruption and rising authoritarianism, the line between back alley grumbling and open rebellion is usually a thick one. But you put food problems...

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Consistent Trade War Inconsistency Hides The Consistent Trend

You can see the pattern, a weathervane of sorts in its own right. Not for how the economy is actually going, mind you, more along the lines of how it is being perceived from the high-level perspective. The green light for “trade wars” in the first place was what Janet Yellen and Jay Powell had said about the economy. Because it was strong and accelerating, they said, the Trump administration gambled that such robust growth would insulate the US system from any fallout. Flush with confidence...

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As Chinese Factory Deflation Sets In, A ‘Dovish’ Powell Leans on ‘Uncertainty’

It’s a clever bit of misdirection. In one of the last interviews he gave before passing away, Milton Friedman talked about the true strength of central banks. It wasn’t money and monetary policy, instead he admitted that what they’re really good at is PR. Maybe that’s why you really can’t tell the difference Greenspan to Bernanke to Yellen to Powell no matter what happens. Testifying before Congress today, in prepared remarks the Federal Reserve Chairman threw cold water on what was supposed...

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China Prices Include Lots of Base Effect, Still Undershoots

By far, the easiest to answer for today’s inflation/boom trifecta is China’s CPI. At 2.9% in February 2018, that’s the closest it has come to the government’s definition of price stability (3%) since October 2013. That, in the mainstream, demands the description “hot” if not “sizzling” even though it still undershoots. The primary reason behind the seeming acceleration was a more intense move in food prices. Rising 3.6% year-over-year, China’s index for consumer prices of food and tobacco had...

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