March PPI was up 1.1%. That's much hotter than expected. If it sounds low, just multiply the number by 12 months to get an annual figure. Ugh! Crude goods up 8%, as the cost of food and energy is bleeding into the cost of finished goods. Energy inflation for one month (March) was 2.9% (multiply that number to a yearly figure). And oil is higher this month than last, suggesting that inflation will be even higher next month.
Core was restrained to 0.2%. No surprise there, since the government ignores food and energy costs. Treasuries are selling off in response.
Higher food costs are causing price riots around the world, inflation is raging even in countries with strong currencies (like Europe, Australia), but our government continues to try to persuade us that inflation is contained here.
There is a widespread myth that higher commodity prices are being driven by speculators. In a recent article on seekingalpha.com, the case was made that COT reports from the CFTC indicate just the opposite -- that speculative interests in the commodities markets are flat over the last year. Of more than 3000 funds in existence, only about 50 have been buying commodities, with very little change year-over-year. COT reports show that it is commercials -- companies who hedge and take physical delivery of commodities -- that are increasing their long positions in the commodities markets.
Core was restrained to 0.2%. No surprise there, since the government ignores food and energy costs. Treasuries are selling off in response.
Higher food costs are causing price riots around the world, inflation is raging even in countries with strong currencies (like Europe, Australia), but our government continues to try to persuade us that inflation is contained here.
There is a widespread myth that higher commodity prices are being driven by speculators. In a recent article on seekingalpha.com, the case was made that COT reports from the CFTC indicate just the opposite -- that speculative interests in the commodities markets are flat over the last year. Of more than 3000 funds in existence, only about 50 have been buying commodities, with very little change year-over-year. COT reports show that it is commercials -- companies who hedge and take physical delivery of commodities -- that are increasing their long positions in the commodities markets.
