Wal-Mart CEO Bill Simon sees “serious” inflation

When Walmart, the world’s largest retailer, says he sees “serious” inflation coming, serious people should take his warning, well, seriously.

Unfortunately, we haven’t any serious people in the Obama Administration. Unless, of course, you consider how serious they are about deliberately destroying America.

USA Today – U.S. consumers face “serious” inflation in the months ahead for clothing, food and other products, the head of Wal-Mart’s U.S. operations warned Wednesday.

The world’s largest retailer is working with suppliers to minimize the effect of cost increases and believes its low-cost business model will position it better than its competitors.

Still, inflation is “going to be serious,” Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY’s editorial board. “We’re seeing cost increases starting to come through at a pretty rapid rate.”

Along with steep increases in raw material costs, John Long, a retail strategist at Kurt Salmon, says labor costs in China and fuel costs for transportation are weighing heavily on retailers. He predicts prices will start increasing at all retailers in June.

“Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along,” Long says. “Except for fuel costs, U.S. consumers haven’t seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory.”

Also, ‘Inflation Stronger than a ‘Whiff”

Obamanomics producing economic disaster on all fronts

Updated.

The Obama Administration is focussed on destroying what little hope is left in America. Stories abound today detailing what an absolute mess the U.S. economy is in, yet Liberals, RINOs, the state-run media, and Americans with their head in the sand continue to pretend as if everything is lemonade and lollipops.

I just posted about how gas prices have doubled since Obama took office. When oil prices shot up under George Bush, the Liberals went berserk and dragged the heads of the major oil companies in front of congress. They accused Bush and Cheney of a grand conspiracy. But a doubling of gas prices under Democrats is suddenly a good thing, or no thing.

Next we have a new report detailing the rise in food prices due to the inflation that the Fed says doesn’t exist. Wholesale food prices spiked 3.9 percent in February from January, the biggest jump in 36 years.

Chicago Sun-Times –  Wholesale food prices spiked 3.9 percent in February from January, the biggest jump in 36 years, the Labor Department said Wednesday.

Most of the increase was because of a sharp rise in vegetable costs, but meat and dairy prices also jumped. Harsh winter freezes in Florida, Texas and other Southern states damaged crops, driving up vegetable prices. Meanwhile global prices for corn, wheat and soybeans have risen sharply in the past year. That has raised the price of animal feed, pushing up the cost of eggs, beef and milk at the wholesale and consumer level.

Corn prices are up 59.4 percent from last year. Wheat is up 81 percent, and soybeans are up 29 percent, said Ephraim Leibtag, deputy director for research at the U.S. Department of Agriculture’s Economic Research Service.

So, gas and food prices are rocketing ever upwards, but at the same time home sales continue to plummet. New-home sales fell 16.9% to a seasonally adjusted annual rate of 250,000. Compared to February 2010, sales collapsed by 28%.

(MarketWatch via Dailybail) — Sales of new single-family homes collapsed in February, the Commerce Department reported Wednesday, as a combination of high unemployment, tumbling prices and a glut of cheaper alternatives brought activity to a near-standstill.

New-home sales fell 16.9% to a seasonally adjusted annual rate of 250,000 in February, though January’s figures were revised higher to 301,000 from 284,000. Compared to February 2010, sales collapsed by 28%.

 

 

Every region but the West saw record lows, and in the Northeast, sales dropped by 50% compared to year-earlier levels.

“The housing market has literally collapsed,” said Tony Sanders, a real estate finance professor at George Mason University. “We’re stuck, it’s not going to revive in the spring and may not in the summer.”

 

Economists polled by MarketWatch had expected a slight rise to a 290,000 rate in February. While inclement weather may have played a role in the particularly poor showing during the month — the particularly nasty dive in the Northeast and Midwest lends support to such a view — analysts said the figures were reflective of a basically dead market.

“The details of the new-home sales release clearly indicate that the housing market remains incredibly soft,” said David Resler, chief economist of Nomura Securities International.

“There’s massive excess [supply] on the market, interest rates are not at record lows, tighter credit standards, unemployment is not decreasing fast enough and throw in oil and gas prices, that sends a big stop sign on consumers buying homes,” Sanders said.

The USDA forecast says consumer food prices will rise 3 to 4 percent this year.

Next up, PIMCO boss Bill Gross, who runs the world’s largest fund, recently dumped all his Treasuries and just came out with this dire warning: America will default, thanks to trillions in entitlement obligations. He says, “We are out-Greeking the Greeks.”

…the only way out of the dilemma, absent very large entitlement cuts, is to default in one (or a combination) of four ways: 1) outright via contractual abrogation – surely unthinkable, 2) surreptitiously via accelerating and unexpectedly higher inflation – likely but not significant in its impact, 3) deceptively via a declining dollar  – currently taking place right in front of  our noses, and 4) stealthily via policy rates and Treasury yields far below historical levels – paying savers less on their money and hoping they won’t complain.

Meanwhile, America is spending more on the war in Libya than Democrats are willing to cut from the budget they continue to refuse to produce. What cuts may eventually be made will go to arming al-Qaeda in Libya. Isn’t Liberalism fun!

Welcome to the new normal!

Lookout – food prices rising, and so is the number of people on food stamps

Food prices are shooting up all over the world, and so are the number of people on food stamps in America.

We are repeatedly assured by the Obama Administration that America is well out of the recession and that things are improving on all fronts at a steady rate. Obama saved the day!

Unfortunately, as with everything else that comes out of the mouths of this administration, it’s a lie.

Things are getting worse and worse. One sure way to judge is by the rise in food prices and the number of people on food stamps. Both are well into the scary range.

First, rising food prices. This today from the Wall Street Journal:

World food prices rose 2.2% in February from the previous month to a record peak, the United Nations’ food body said Thursday, as it warned that volatility in oil markets could push prices even higher.

The Food and Agriculture Organization price index rose by 2.2%—the eighth consecutive rise since June—to an average of 236 points last month, the highest record in real and nominal terms since the agency started monitoring prices in 1990.

Global cereal supplies are also expected to tighten sharply this year due low stock levels, the FAO said. The body raised its estimate for world cereal production in 2010 by eight million metric tons from its December estimate to 2.2 billion tons but said it expects that to be outpaced by an 18 million-ton increase in world consumption.

[...] Charities warn that the rising cost of staples could push the number of chronically hungry people in the world above one billion, as happened in the wake of the last food crisis.(more >>)

Currently in America about 43,000,000 people are receiving food stamps, or about 14% of the population.

That is an incredible figure, and it’s a wonder that it isn’t being talked about more. Although Michelle Obama harps on how fat Americans are, the so-called richest country in the world is stuffing its face with food stamps.

Check out this interactive chart at the Wall Street Journal. You can click on a column to arrange the data by that preference. Below is clicked on the number of people people. The chart will be updated in a week or so, but this is as of September. It’s worse now.

Pretty scary, eh? But it is only going to get much worse over the coming year(s) as the price of food and other commodities continue to increase, all brought to you by B & B, Barack and Bernanke.

Here is a snapshot from Idaho of what is going on around the nation. (h/t Atlas)

Almost 228,000 Idahoans are now on food stamps.The state has the largest growth in enrollment in the nation.In just one hour, cashiers rang up more than 570 customers.In 2007, roughly 87,000 Idahoans needed food stamps. Five years later that number has jumped to nearly 228,000. (hat tip Jason) Source: KTVB

Ladies and gentlemen, America is headed towards a financial disaster the likes of which it has never known. It will make the Great Depression look like the good old days. It’s just a matter of time. The proverbial sh*t could hit the fan within 3 months or 3 years, but hit it surely shall. The scariest part is that none of this is by accident…

World bank warns food prices at “dangerous levels,” up 29% since last year

This is just the beginning.

WASHINGTON (AP) (h/t Weasel Zippers)  — World Bank President Robert Zoellick says global food prices have hit “dangerous levels” that could contribute to political instability, push millions of people into poverty and raise the cost of groceries.

The bank says in a new report that global food prices have jumped 29 percent in the past year, and are just 3 percent below the all-time peak hit in 2008. Zoellick says the rising prices have hit people hardest in the developing world because they spend as much as half their income on food.

The World Bank estimates higher prices for corn, wheat and oil have pushed 44 million people into extreme poverty since last June.

U.S. Government Lying About Inflation and Jobs Market

The U.S. Government claims 1.5% price inflation and 36,000 jobs gained last month. However, real price inflation is already north of 5% and over 50,000 jobs were lost last month.

from Inflation.us

Rice Futures Surge 8% in Past Two Days

This can’t be good.

Much of the world depends upon rice as their staple food. As many people point to the price of wheat and bread as one of the catalysts for the turmoil in the Middle East, skyrocketing rice prices won’t go down well in other parts of the world, either.

The Australian writes today that, “INFLATION topped 7 per cent in Indonesia last month, its highest level in 22 months. The figures underscore mounting concern throughout the region about runaway food prices and potential scarcities. Consumer prices in Southeast Asia’s biggest economy rose to 7.02 per cent from a year earlier, against expectations inflationary pressure would ease slightly.”

Inflation.us

Rice futures have surged 8% during the past two days to $15.99 per 100 pounds, its highest level since December of 2009. The U.S. is the third largest exporter of rice and expects to cut production in 2011 by 25%. Very few people in the investment community are talking about rice and it appears to be one of the most undervalued agricultural commodities at this time. Rice could still be at the very beginning of a large upward move higher. NIA wouldn’t be surprised to see rice prices rise back to its 2008 high of $24 by the end of 2011.

Inflation hits McDonalds

The Obama Administration and their lickspittle megaphones in the state-run media continue to insist that inflation is nothing to worry about. Federal Reserve Chairman Ben Bernanke assures us that he has his fingers and toes on all the levers of the economy so that he can fine tune inflation to 2%.

Yet, anyone who goes to the grocery store or gas station or mall can see with his or her own lying eyes that prices for most of their essentials are inching ever upwards.

When McDonalds starts raising prices in the very competitive fast food market, you know the jig is up.

Inflationnation writes: McDonald’s just announced the prices they pay for ingrediants will be rising between 2% to 2.5% this year with Technomic estimating they will raise prices across the board between 2.5% and 3%. Keep in mind, we are less than a month into the new year. NIA bets McDonald’s total 2011 price increases will be into the double-digits by year end.

From the LA Times

Be prepared to pay more for burgers. McDonald’s Corp. is looking to increase the price of some menu items as it tries to deal with the rising cost of beef and other ingredients.

McDonald’s is not alone. The restaurant industry is expected to raise prices in the face of rising commodity costs, and grocery stores began raising prices last year.

The average price McDonald’s pays for its most-used ingredients, such as chicken, wheat and cheese, is expected to go up 2% to 2.5% this year.

“As commodity and other cost pressures become more pronounced as we move throughout the year, we will likely increase prices to offset some but not necessarily all of these cost increases,” McDonald’s Chief Financial Officer Pete Bensen said Monday.

If McDonald’s, the world’s largest restaurant chain by sales, is mulling over price increases, consumers can expect to see the cost of food going up everywhere. All of the major packaged-food companies, including Kraft Foods Inc. of Northfield, Ill., and Sara Lee Corp. of Downers Grove, Ill., have warned of higher prices in 2011.

 

 

Go Postal with Forever Stamps

good as gold?

Peter Schiff (of the must see viral video, Peter Schiff Was Right) wrote about a good idea for investors – Forever Stamps.

He lays out the case of how and why for the investor, “Forever stamps are about as close to a sure thing as most people will ever get.”

Among other things, he makes the interesting point that, “Over the past 10 years stamps are up 29%, while the S&P 500 is up a measly .1%.”

______________________________

Peter Schiff: Forever Stamps Tell Us Much

The United States Postal Service announced this week that all future first class postage stamps sold will be the so–called “forever stamps” that have no face value but are guaranteed to cover the cost of mailing a first class letter, regardless of how high that cost may rise in the future. Currently these stamps are sold for 44 cents, but will increase in price if and when the Post Office hikes rates.

Apart from sounding the death knell of the one cent stamp, the news is interesting on two fronts: it provides insight into remarkably irresponsible government accounting, and it provides investors with the most attractive Federally-guaranteed inflation protected asset available on the market today.

Over the past fifty years, the USPS has raised the rates on first class postage 20 times. During that time the stamp prices have gone up more than 1,100%. Given the increasing frequency of rate hikes (three in the last four years) the Post Office claims it made the move to forever stamps to save money on printing costs and to increase customer convenience. The public seems to appreciate the product and has snapped up a staggering 28 billion forever stamps since they became available in 2007.

But the real reason behind the permanent switch is that it allows the Post Office to hide its insolvency behind phony accounting numbers, setting itself up for a massive taxpayer financed bailout in the not too distant future.

Much the way Greece used phony accounting to qualify for euro zone inclusion, the USPS is using creative accounting to avoid making significant cuts in current wages and benefits. By offering forever stamps, the Post Office moves forward future revenues to pay current expenses. But every forever stamp sold today represents a stamp not sold in the future. The revenues booked now will not be put in escrow to deal with revenue shortfalls that are guaranteed to plague the Post Office in the years ahead. This simply kicks farther down the road any intractable fiscal problems that the USPS can’t solve through more conventional means.

The Post Office also ignores that their ability to sell higher priced forever stamps in the future will be restricted. Those individuals and institutions who hoard the stamps now could offer them for sale in competition with the Post Office. Even though the Post Office will not redeem forever stamps for cash, there is no law against reselling them for whatever price the market will bear. How many forever stamps will the Post Office be able to sell at full price if customers can buy them at a discount on Ebay?

On that note, forever stamps provide the most conservative investors with a much more attractive alternative to zero interest checking accounts, low yielding Treasury bonds, or even inflation protected government securities (known as TIPS).

Given these stamps will always be completely liquid, the only way an investor can lose money on forever stamps is if the price of postage goes down. There may not be a single human on the planet who thinks that this is a likely scenario. On the other hand, if postage rates rise with inflation then the stamps are a very, very safe bet.

And unlike Treasury bonds or TIPS, investors do not have to pay a premium above face value for the privilege of buying stamps. While it is true that stamps do not pay interest, the extremely low rate offered by government securities should not fundamentally alter the investment calculations comparing bonds with stamps. More significantly, stamps are backed by an actual tangible service, postal delivery, whereas U.S. Treasury debt is backed by nothing but a printing press.

Forever stamps are about as close to a sure thing as most people will ever get. Over the past 10 years stamps are up 29%, while the S&P 500 is up a measly .1%. With labor and other costs continuing to mount inside the Post Office, there can be little doubt that many price hikes are coming. Minimum investment in forever stamps is just 44 cents, with no brokerage fees. Plus as an added bonus, if you use the stamps yourself, you pay no income tax on your capital gains.

Sure, without a federal bailout there is a chance the Post Office will go under, and those forever stamps will end up lining bird cages. However, given the track record of government bailouts and the clout of unionized postal workers, chances are very high that the Post Office will always get the bailouts it needs. As a result, forever stamps are a better bet than Treasury debt. They also have prettier pictures.

the whole thing