It seems there may only be one place on the entire planet not experiencing crushing inflation ... at the Federal Reserve.
The Federal Reserve would have you believe that everything is fine, focusing on core inflation rates and ignoring broader measures of inflation as they affect food and energy. These commodity-driven prices, as our central banking overlords would have you believe, are naturally more volatile and shouldn't be overstated.
As measured by the CRB inflation is raging having risen by nearly 33% y-0-y. Measured by the commodity price index it is over 25%.
So what makes up these indexes and how are the individual components performing y-o-y?
The “RJ/CRB” is an Index of 19 commodity futures prices, Commodity Research Bureau (CRB) Index was originally developed in 1957, continues to be one of the most often cited indicators of overall commodity prices. (weighted percentages)
Aluminum (6%),Cocoa (5%),Coffee (5%),Copper (6%),Corn (6%),Cotton (5%),Crude oil (23%),Gold (6%),Heating oil (5%),Lean Hogs (1%),Live cattle (6%),Natural Gas (6%),Nickel (1%),Orange juice (1%),Silver (1%),Soy beans (6%),Sugar (5%),Unleaded Gas (5%),Wheat (1%)
Lets take a quick look at some of the more common components and see what they have been up to for the last year.
Mar 2010 Cotton - 85.79
Mar 2011 Cotton - 229.67 y-o-y ... up a whopping 167.71%
Mar 2010 Crude Oil(WA) - 79.30
Mar 2011 Crude Oil(WA) - 108.65 up 37.01%
That morning cup of java?
Mar 2010 162.15
Mar 2011 294.48 a 68.79% increase Some sugar for it will cost you an additional 42.70% since last year.
How about a bowl of Wheaties or some toast?
Mar 2010 191.07
Mar 2011 316.77 that is a 65.79% increase
Like a steak? Mar 2010 - Mar 2011: up 23.42% y-o-y
Ask the Fed President and he will emphatically deny that his money printing is causing soaring prices. Yet when you look at the USD index was at a high in May 2010 of 88 and is reaching a new 52 week low as I write this at 73. That is a 17% loss of purchasing power in the paper currency of choice in just the last year.
People inflation is raging everywhere except the Federal Reserve.