I do not intend this post to be a statement that inflation is here. But I think that challenging our traditional notions of how we measure inflation may be in order. Whether it is Core Inflation or Consumer Price Index (CPI had an increase of 1.2% over the last 12 months through November 17), it is clear that these measures are not reflective what has been going on on the commodities markets over the last several months.
Commodity Price appreciation for the recent 5 months:
Commodities Return*
Aluminum 19.20%
Barley 75.10%
Coffee 22.73%
Copper 29.83%
Corn 55.27%
Cotton 58.86%
Gold 11.85%
Lead 28.29%
Lumber 15.42%
Lean hogs 1.69%
Live cattle 4.30%
Nickel 16.87%
Orange juice 1.38%
Palladium 66.25%
Platinum 10.03%
Rice 52.44%
Silver 52.86%
Soybeans 18.70%
Sugar 47.49%
Tin 40.95%
Wheat 50.08%
Zinc 19.62%
Rare earths 60.53%
With interest rates at historic lows, it remains to be seen how investors could keep up with a significant loss of purchasing power.
