Showing posts tagged inflation

Fed gloomier about the economy

NEW YORK (CNNMoney) — Ben Bernanke and the rest of the Federal Reserve have grown more pessimistic about the state of the U.S. economy.

At the conclusion of a two-day policy meeting, the central bank said that while the recovery is continuing at a moderate pace, growth is somewhat slower than expected. It also said the jobs market is “weaker than anticipated.”

It also issued new economic projections that call for slower economic growth, higher unemployment and higher inflation in 2011 and 2012 than in its previous forecast. At a press conference Wednesday afternoon, Fed chairman Bernanke referred to the new forecast as a significant revision.

Source - CNN


Price increases of up to 7% on commodities such as toilet paper, diapers, baby wipes, garbage bags

Get used to it. This is just the beginning. If you remember, the same thing happened back in 2008 when P&G raised prices by up to 16%.  

Procter & Gamble Co. last week notified U.S. retailers that it was raising wholesale prices on Pampers diapers and baby wipes, Charmin toilet tissue and Bounty paper towels, a company spokesman said Monday.

The wholesale price increases amount to 7% for Pampers diapers, 3% for Pampers baby wipes and an average increase of 5% for Bounty and Charmin products.

The price increases come in the wake of rival Kimberly-Clark Corp. on Monday saying it was raising prices on most of the products it sells in North America as it faces higher costs for key materials like wood pulp and fuel. Last month, Kimberly-Clark announced price increases on items like Huggies diapers and Cottenelle bathroom tissue.  Source

Kimberly-Clark reported Monday that a bigger-than-expected rise in the cost of raw materials took a toll on first-quarter profit, which fell 9% to $350 million, or 86 cents a share, from $384 million, or 92 cents a share, a year earlier, even as net sales increased 4% to $5 billion.

The Dallas-based company, which also makes Kleenex tissues, said cost increases for raw materials like wood pulp, resins and fuel are likely to run twice as high this year as previously projected. It said it needs to raise prices in response.

Clorox Co., which reports next week, says it is raising the price of Glad trash bags by 9.5% beginning in May. The cost of some of its salad products, like Hidden Valley ranch dressing mix, will also rise.

Shoppers and investors will be watching for similar moves from Colgate-Palmolive Co.,Unilever PLC and Energizer Holdings Inc., which report results this week.

Consumers already are absorbing higher costs for food and gasoline. And price tags are also forecast to begin rising for apparel, reflecting rocketing cotton costs. U.S. consumer prices rose 2.7% in March from a year earlier, the largest increase since December 2009.

"When you look across almost every category out there you are seeing the impact of higher commodity costs show up and higher selling prices for everything," Kimberly-Clark CEO Thomas Falk said on a conference call to discuss quarterly results Monday.


CHICAGO, March 18 2011 (Reuters) - Procter & Gamble Co will raise U.S. detergent prices by 4.5 percent in June as the world’s largest household products maker starts to respond to rising costs for materials, packaging and transportation.

 The maker of Tide, Gain and Era laundry detergents said the increase would go into effect on June 6.  Source

What you see here is the manufacturers raising prices on things they know people have to have and are less likely to buy generic.  This is just the beginning of commodities price increases. Stock up while you can or BUY GENERIC.

Shoppers are less likely to switch to a cheaper brand on a baby product than many other items on the shopping list, according to a recent survey by Sanford Bernstein analyst Ali Dibadj. Just 10% of consumers said they switched to a cheaper diaper brand because “it’s not worth paying more in this category,” and no consumers reported switching baby food. By comparison, nearly a third of consumers said they switched brands of bleach, bottled water and liquid soap.

Jacking up prices carries marketing risks, even for diapers. Premium brands face intense competition from less-expensive options, especially private-label brands, which gained market share during the recession. Nevertheless, many parents, especially new ones, are willing to splurge on babies even when cutting back elsewhere, believing pricier products are better for comfort or development.



Commodities Food Price Index from Sept. 2010 - Feb 2011.

The prices of commodities such as corn, wheat, sugar, coffee, etc.


Screenshot taken 04/06/2011

Corn soars to post-2008 food crisis highs

Corn futures continue to sell high, the highest since the 2008 peak.

U.S. corn prices surged 6.5 per cent on Friday to their highest levels since the food crisis of 2008, setting the stage for record global food prices – which have sparked social unrest – to push even higher.

Futures, which rose 4.5 per cent on Thursday, were fuelled by strong demand for corn to make food and fuel. That demand has whittled down the corn supply, which was already at its lowest level in 15 years in the United States, the world’s top exporter of the grain.

Read the rest here at Reuters


Posted at 10:35pm
Tagged food crisis food supply food shortage inflation


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Posted at 11:34pm
Tagged inflation food prices economy finance Walmart


Gold Replacing Dollar as World’s Reserve Currency?

$105 per barrel oil. Cotton prices at record levels. Food prices at 2008 highs. Typically, such commodity price increases would send central banks running to the U.S. Dollar to secure the value of their savings. After all, the dollar has been the reserve currency since World War I.

But not this time. 

Central banks are shedding dollars, reducing their holdings by about $9 billion in previous quarter, according to Nomura Securities’ Jens Nordvig, global head of G10 FX Strategy.

What are they buying instead? Gold 

The yellow metal hit a fresh record high this morning, while the dollar index dropped to a 15-month low. The news had Fast Money’s Brian Kelly looking to add more gold and silver longs to his portfolio Thursday morning.

“What is working is gold, silver  and oil ” said Kanundrum Capital’s Kelly. “I wish I had more.”

Gold and silver have become the inflation hedges of choice for some investors. Gold hit an intra day high today of $1,448 per ounce. Silver is trading at 31-year highs, hitting an intra day high of $38 per ounce.




The great U.S. economic machine is being ripped apart and dismantled right in full view of us all. This is not a “conservative” issue or a “liberal” issue. This is an American issue. The United States is rapidly being turned into a “post-industrial” wasteland. It is time to wake up America.

Posted at 10:51pm
Tagged food prices inflation food supply


Marc Faber: Real U.S. Price Inflation Currently Between 5% and 8%

Marc Faber was on CNBC today live from the Russian Forum in Moscow and said that real U.S. price inflation is already between 5% and 8%, much higher than the CPI’s reported year-over-year inflation rate of 1.5%. This is in line with NIA’s comments in recent weeks that we estimate U.S. price inflation to be a minimum of 5%. (via Marc Faber: Real U.S. Price Inflation Currently Between 5% and 8% | National Inflation Association Blog)