Nov. PPI up 1.8%

[not.your.average.joe]

http://www.google.com/hostednews/afp...Nd1YlchQIGY4wQ

Energy costs push up US wholesale prices 1.8 percent
(AFP) – 3 hours ago

WASHINGTON — Surging energy costs lifted wholesale prices by 1.8 percent in November, government data showed Tuesday, highlighting the volatility of inflation in recent months.

The Labor Department's producer price index (PPI) was driven by a 6.9-percent jump in finished energy prices including a 14.2-percent rise in gasoline costs.

Food prices rose a sharp 0.5 percent in the month.

Excluding food and energy, the so-called core PPI was up 0.5 percent.

Analysts had expected a 0.8 percent rise in the headline PPI and a 0.2-percent increase in the core index.

The rise in prices comes amid ongoing fears about inflation as well as deflation.

Though overall inflation has been tame, it has allowed the Federal Reserve to keep rates low to help lift the economy out of its malaise.

Some analysts believe the recession could lead to a crippling cycle of deflation that crimps a recovery, while others fear that low rates could over time fuel a new surge in inflation that will be difficult to contain.

Over the past 12 months, wholesale prices are up 2.4 percent, reversing a period of declining prices for the first time in a year.

[tmosley]

Monetary inflation is starting to hit prices. I wonder how long it will be before we feel the full effects?

My guess is that the printed money that was poured into the stock market will start hitting prices before the end of summer of 2010. I expected the inflation from last year's stimulus to start hitting about now (by February at the latest, I believe is what I said), but that is looking like it was a bit premature. Now I am thinking that 2010 will be marked by high inflation, and that we will see hyperinflation before the end of the next decade. Gold prices and other inflation hedges are likely to explode in anticipation of this, and they are likely to never come down again in terms of dollars as we hit the phase change where the dollar moves from near the bottom of the liquidity pyramid to the top (ie people would rather have their money in small businesses than in dollars).

I hope everyone is prepared.

[llepard]

http://www.google.com/hostednews/afp...Nd1YlchQIGY4wQ

Energy costs push up US wholesale prices 1.8 percent
(AFP) – 3 hours ago

WASHINGTON — Surging energy costs lifted wholesale prices by 1.8 percent in November, government data showed Tuesday, highlighting the volatility of inflation in recent months.

The Labor Department's producer price index (PPI) was driven by a 6.9-percent jump in finished energy prices including a 14.2-percent rise in gasoline costs.

Food prices rose a sharp 0.5 percent in the month.

Excluding food and energy, the so-called core PPI was up 0.5 percent.

Analysts had expected a 0.8 percent rise in the headline PPI and a 0.2-percent increase in the core index.

.

My, my, my.......well , lookee here....

1.8% x 12 months equals.....voila 21.6% annual inflation.

Good thing Bennie's slack capacity model has it all under control.

So let' s see. Interest rates 1-2% (or zero if you are Goldman Sachs).

Inflation 21%. Meaning negative real interest rates of 18-20% the highest in history. As Mogambo would say.......we are freakin doomed.

So is the dollar.

How much you want to bet gold and silver are up more than 21% next year?

Imagine if you are on a fixed income, or a saver. Ben to you--drop dead.

L