Don't Be Fooled, Inflation Is Already Here

[Letsbereal]

Food prices in Argentina? I was just there most recently and if you want my opinion, comparing with my part of Europe, they are a breeze. I find food there is cheap comparing with here.   

Do you earn your money in Argentina and have the same salary as most Argentinians.

[agentbluescreen]

What's all this loose talk here, I was just watching Fox Business and they announced inflation is a steady 0% and everyone should be investing HEAVILY in "growth funds".  They didn't have that weird Texas congressman with two first names on, either.  


LULZes

[Letsbereal]

US 2011 Inflation: 10.6%
18 February 2011, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/article/us-2011-inflation-106

Excerpt:

We thank Sean Corrigan of Diapason Securities for bringing our attention to the MIT Billion Price real time inflation Index (first reported here) who points out that based on the ongoing surge in prices, which have increased by 1.25% in the last 45 days (December 31, 2010: 101.085, February 14, 2011: 102.353), a simple annualization indicates a 10.6% increase in prices in 2011!

With all undue respect to the Chairsatan (and other "disinflationists") it is time to bring Volcker out of the freezer once again.

Look for the 30 Year to pass 5% in a few weeks. Oh yes, M2 surged to all new time highs again.

[Letsbereal]

Chinese Futile Inflationary Response Intensifies As PBOC Hikes RRR By 50 bps, Again
18 February 2011, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/article/chinese-futile-inflationary-response-intensifies-pboc-hikes-rrr-50-bps-again


Due to lag effects of monetary policy and fiscal stimulus, the effects can’t be removed until a few years forward
25 November 2010, (Business Insider) http://www.businessinsider.com/andy-xie-its-too-late-for-china-to-stop-inflation-because-of-the-last-decade-2010-11

It’s Too Late For China To Stop Inflation Because of Stimulus Lag Effects. There’s no question that China will experience high inflation over the next few years says Andy Xie.

[Letsbereal]

Rising Food Prices Push Up Inflation Significantly
19 February 2011, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/article/guest-post-rising-food-prices-push-inflation-significantly#comment-980996

Excerpt:

A recently released report by the World Bank’s Food Price Watch confirms that rising agricultural products are sharply pushing up global food prices in lower-income nations (see “World food price uncertainty presents social risks,” in AsiaNews, 4 February 2011), especially among the poorest (where the poverty line is defined as US$ 1.25 per person per day).

The WB’s global food price (GFP) index increased by 15% between October 2010 and January 2011, 29% per cent above its level a year earlier. The global prices of wheat, maize, sugar and edible oils especially saw sharp increases. According to the WB estimates, an additional 44 million people fell into poverty.

For some Asian nations, the price of wheat rose considerably: Kyrgyzstan (54%), Bangladesh (45%), Tajikistan (37%), Mongolia (33%), Sri Lanka (31%), Azerbaijan (24%), Afghanistan (19%), Sudan (16%), and Pakistan (16%).

[Letsbereal]

Euro-zone Feb. annual inflation up 2.4%
1 March 2011, by William L. Watts (MarketWatch)
http://www.marketwatch.com/story/euro-zone-feb-annual-inflation-up-24-2011-03-01


Double it and you come closer to reality, 4.8% inflation cause the always plays these figures down cause otherwise they are to ugly for in their rigged books and don’t fit in the FIAT Ponzi round 2% max. Inflation.

[Letsbereal]

UK: Grocery sales growth slows, prices rise
1 March 2011, London (Reuters)
http://uk.finance.yahoo.com/news/Grocery-sales-growth-slows-reuters_molt-3468107508.html

Sales growth at grocers slowed in February, despite higher prices, according to market research published on Tuesday, adding to signs of growing caution among consumers since the start of the year.

[kerrymti]

As my family is trying to 'readjust' our family budget...to make room for the increasing food/gas prices...my son (21yr) got a job at Wal-Mart and started work yesterday...I thought we might be able to save a little money on a select few items that I would consider buying at Walmart (if I received an employee discount - right now we don't buy anything there)...much to my dismay...we find out that the 10% discount "does not apply to any items that are edible"...guessing this means, vitamins, medications, groceries, drinks, etc...oh well, I despise them anyway.  We will just take the money my son makes there and spend it at another store. 

[Letsbereal]

Brazil central bank raises interest rate to 11.75pc
3 March 2011, (The Telegraph)
http://www.telegraph.co.uk/finance/economics/8358654/Brazil-central-bank-raises-interest-rate-to-11.75pc.html

Excerpt:

Brazil's central bank has raised its key interest rate a half a percentage point to 11.75pc as it turned the screw further on climbing inflation.

The increase - which put the base rate at the highest in the G20 group of developed and emerging economies - was expected, given inflation of 5.9% last year, well above the government target of 4.5%.

It was likely, though, to undermine government efforts to slow the appreciation of Brazil's currency, the real, whose soaring value against the dollar is sapping exports.

The interest rate hike was the second consecutive increase by the central bank's monetary policy committee. In January, the institution also added 50 basis points to the key SELIC rate.

Analysts predict another tightening in April.


"The economy is zooming along, demand is a lot stronger than supply, and the central bank had to raise the rate to get inflation within the limits," an economist at the Brazilian Economic Institute of the Getulio Vargas Foundation, Fernando de Holanda Barbosa, told AFP.

----

Brazil's manufacturing sector, though, is complaining loudly about the successive rate hikes, which are pushing up the value of the real, making exports less competitive, and increasing their costs.

"We are witnessing the strangulation of the national economy," the Sao Paulo state Federation of Commerce said in a statement Wednesday.

It blamed the inflation spike on the United States and its ultra-easy monetary policy.

----

Foreign investment in Brazilian stocks and bonds last year already hit a record $52bn.

[Letsbereal]

The Doc is back! Good points!

import Inflation and Core Inflation http://www.youtube.com/watch?v=saqFf9VVEwU

Doc. says that: The only way you can fight imported inflation is to strenghten the currency, rise in value.

[Letsbereal]

High World Food Prices May Persist as Demand Rises, IMF Says
4 March 2011, by Whitney McFerron and Luzi Ann Javier (Bloomberg)
http://www.bloomberg.com/news/2011-03-04/record-food-prices-may-persist-as-economic-growth-boosts-demand-imf-says.html

Excerpt:

Consumers should get used to paying more for food, after prices rose to a record, because farmers will take years to expand production enough to meet demand and drive down costs, the International Monetary Fund said.

People in developing countries are becoming richer and eating more meat and dairy, meaning more grain for livestock feed and land for grazing animals, Thomas Helbling, an adviser for the IMF’s research department, and economist Shaun Roache wrote in an article. Rising demand for biofuels and bad weather also tightened supply, they said.

“Rising food prices may be here to stay,” Helbling and Roache wrote in the article published in the agency’s Finance & Development magazine. “The main reasons for rising demand for food reflect structural changes in the global economy that will not be reversed.”

The world food price index tracked by the United Nations rose to a record in February. Food inflation fueled political unrest across North Africa and the Middle East that toppled leaders in Tunisia and Egypt, the largest wheat importer.

“Over time, supply growth can be expected to respond to higher prices, as it has in previous decades, easing pressure on food markets, but this will take time counted in years, rather than months,” the IMF’s Helbling and Roache said.

[Letsbereal]

Crude Heads for Fifth Weekly Gain In London on Libya Violence, U.S. Demand http://www.bloomberg.com/news/2011-03-04/crude-heads-for-fifth-weekly-gain-in-london-on-libya-violence-u-s-demand.html

Commodities Rise to Two-Year High as Cotton Jumps to Record, Cocoa Gains http://www.bloomberg.com/news/2011-03-04/commodities-rise-to-two-year-high-as-cotton-jumps-to-record-cocoa-gains.html

Cocoa Advances to 32-Year High on Concern About Curbed Ivory Coast Supply http://www.bloomberg.com/news/2011-03-04/cocoa-advances-to-32-year-high-on-concern-about-curbed-ivory-coast-supply.html

[Letsbereal]

Last Updated: February 17th, 2011

http://www.shadowstats.com/alternate_data/inflation-charts

No. 353: January Inflation  subscription required   February, 17th, 2011
http://www.shadowstats.com/commentaries

• January Annual Inflation Rose to 1.6% (CPI-U), 1.8% (CPI-W), 9.1% (SGS)

• Accelerating December and January Inflation Was Muted by Unstable Seasonal Adjustments

• C-CPI-U Revisions Generated “Needed” Lower Inflation Reporting

[Letsbereal]

Global Food Prices Hit Record High In February, U.N. Says
3 March 2011, (Reuters)
http://www.huffingtonpost.com/2011/03/03/global-food-prices-hit-re_n_830679.html

Excerpt:

Global food prices hit a record high in February, the United Nations said Thursday, warning that fresh oil price spikes and stockpiling by importers keen to head off popular unrest would hit already volatile cereal markets.

Rising food prices are a morphing global concern, partly fuelling the protests which toppled the rulers of Tunisia and Egypt in January and February, which in turn unleashed unrest in North Africa and the Middle East from Algeria to Yemen.

The U.N. Food and Agriculture Organization's Food Price Index hit its second straight record last month, further passing peaks seen in 2008 when prices sparked riots in several countries, driven by rising grain costs and tighter supply.

FAO economist Abdolreza Abbassian said global food prices are likely to remain close to record highs until the condition of new crops is known, adding that jumps in the oil price could have a bigger impact on grain markets, which have seen benchmark U.S. wheat prices surge 60 percent in the year to March.

"Until we know about new crops, that means waiting at least until April, our view is don't expect any major corrections in these high prices, expect even more volatility now that oil has joined the crowd," Abbassian said in a telephone interview.

Oil prices recently hit 2-1/2 year highs, nearing records set in 2008, with markets spooked on concern that North African and Middle East unrest would choke key supplies.

[Letsbereal]

Saudi Arabia, Which Allegedly Hiked Output, Just Raised Crude Export Prices To Asia And Europe
5 March 2011, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/article/saudi-arabia-which-allegedly-hiked-output-just-raises-crude-export-prices-asia-and-europe

Excerpt:

Two weeks ago Zero Hedge claimed that Saudi Arabian "gestures" to hike crude output were about as hollow as the heads of those suggesting that dealing with surging oil prices involves reducing interest rates even more (which just happen to be at zero already), mostly as a result of the country's recent adoption of "whorism" or its doomed strategy to buy the love of its citizens.

The reason is that as UBS' Andy Lees noted, Saudi "will need to ramp up production by about 10% (more capital spending) without prices falling" to fill the suddenly gaping budget hole left from literally throwing $37 billion out of Bernanke's leased helicopter.

Yesterday, BusinessWeek's Peter Coy essentially reaffirmed our theory verbatim in the piece "Saudi Arabia Must Keep Pumping Oil to Buy Stability"... needless to say we completely agree with this.

Obviously, the bigger issue here is that as WikiLeaks recently suggested, and was reconfirmed by Jim Rogers, Saudi Arabia is simply lying about its excess capacity.

Because if Saudi had indeed raised output as many have hoped for, and as Saudi has represented, it would have made up for the funding differential simply by the hike in export volume.

Instead, as Reuters reports, Saudi Aramco just hiked prices on oil to customers in Asia and Europe up substantially.

This, at least to us, does not appear like the rational action of a player seeking to moderate surging oil prices to avoid further social conflict, and one who can plug offline capacity.

[TahoeBlue]

Saudi Arabia, Which Allegedly Hiked Output, Just Raised Crude Export Prices To Asia And Europe  

Just to be clear - OPEC pricing is controlled by:
Rockefeller-StandardOil/QEII-BP/QueenBeatrix-RDS/Rothschild Banking

and seconds: Halliburton/Bush -  KBR/Carlyle

[Letsbereal]

China's inflation hits 4.9% in Feb
11 March 2011, by Fran Wang (AFP)
http://uk.finance.yahoo.com/news/China-inflation-hits-4-9-Feb-afp-639311926.html

Excerpt:

China said Friday that consumer prices rose 4.9% year-on-year in February, well above the official target, but the government insisted it could keep inflation under control in 2011.

Rising costs of food, housing and other essentials have become a major source of anxiety for consumers and stability-obsessed policymakers, who are ever fearful that prolonged inflation could spark social unrest.

The consumer price index, the key gauge of inflation in the world's second-largest economy, was unchanged from January, and again surpassed the government's annual inflation target of 4%.

Analysts had expected inflation to stand at 4.8% due to lower vegetable prices and much-needed snowfalls across drought-stricken northern China, according to Dow Jones Newswires.

While officials said the situation was manageable, some analysts warned prices would continue to rise in the coming months.

[TahoeBlue]

Germany 1920's inflation....
http://www.leninimports.com/dr_mabause.html
Fritz Lang remembered a poster in Berlin which summed up the nihilistic state of mind

Berlin, sein Tanzer is der Tod (Berlin, your dancing partner is Death)

http://www.mitpressjournals.org/doi/abs/10.1162/dram.2009.53.1.73?journalCode=dram
“Berlin … Your Dance Partner Is Death”

Dance and death combined in post-WWI Germany to complicate the material authority they were seen to share

[Letsbereal]

US Inflation On Track To Hit 8.3% In 2011
22 March 2011, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/article/us-inflation-track-hit-83

Excerpt:

And here is where we stand: per a quick check with the recently released and constantly updated MIT billion price project, which just happens to correlate 93% with the CPI, 2011 inflation in the US is trending at an 8.3% annual rate of increase.

This is only comparable to China, which just happens to have a growth rate (presumably that is double that of the US), and is almost three times higher than the latest inflation data released by... Zimbabwe.

[TahoeBlue]

http://repository.unm.edu/bitstream/handle/1928/10894/MaryAnneNewhall%20Final%204-12-10.pdf?sequence=1

Dance Around the Golden Calf – Emil Nolde, 1910. Courtesy of Staatsgalerie moderner Kunst, Munich

[Letsbereal]

INFLATION

17 March 2011: Inflation hits diaper market http://www.marketwatch.com/story/inflation-hits-diaper-market-2011-03-17

17 March 2011: Consumer prices climb 0.5% in February http://www.marketwatch.com/story/us-consumer-prices-rise-05-in-february-2011-03-17


16 March 2011: U.S. producer prices climb 1.6% in February http://www.marketwatch.com/story/us-producer-prices-climb-16-in-february-2011-03-16

16 March 2011: Euro-zone Feb. annual inflation confirmed at 2.4% http://www.marketwatch.com/story/euro-zone-feb-annual-inflation-confirmed-at-24-2011-03-16


15 March 2011: Prices of U.S. imports jump 1.4% in February http://www.marketwatch.com/story/prices-of-us-imports-jump-14-in-february-2011-03-15

[Letsbereal]

Trichet says inflation durably above ECB target
28 March 2011, Paris (Reuters)
http://uk.reuters.com/article/2011/03/28/uk-ecb-trichet-idUKTRE72R4O820110328

Excerpt:

The inflation rate in the euro zone is “durably” above the European Central Bank’s target, the bank’s president Jean-Claude Trichet said on Monday in comments which offered support to the euro.

Inflation in the 17-country euro zone accelerated to 2.4% in February, well above the ECB’s target of close to, but below 2%.

It has been above 2% since December.

“Inflation rates … are now durably above the common definition of price stability in the euro zone,” Trichet said.


U.S. consumer spending up and inflation accelerates
28 March 2011, (Reuters)
http://uk.reuters.com/article/2011/03/28/uk-usa-economy-idUKTRE72R34320110328

Excerpt:

U.S. consumer spending rose for an eighth straight month in February, but much of the gain went to cover rising food and energy prices, providing little lift to the economy.


US consumers use savings to pay for basics
28 March 2011, by Richard Blackden (The telegraph)
http://www.telegraph.co.uk/finance/economics/8411488/US-consumers-use-savings-to-pay-for-basics.html

[TahoeBlue]

http://www.flickr.com/photos/hab3045/3585961101/

poster plastered around Berlin in 1919, which read: “Berlin, stop and think! Your dance partner is Death!”

Berlin, sein Tanzer is der Tod (Berlin, your dancing partner is Death)

http://www.mitpressjournals.org/doi/abs/10.1162/dram.2009.53.1.73?journalCode=dram
Dance and death combined in post-WWI Germany to complicate the material authority they were seen to share.

Using nascent modern dance techniques to exploit the expressive capacities of the dancing body, choreographers turned to dances of death to portray the increasingly difficult conditions of humanity. The logistics of performing these spectacles of the real are investigated through three choreographer/performers of the Weimar Republic: Kurt Jooss, Valeska Gert, and Anita Berber.

[Letsbereal]

U.S. Inflation Expands Beyond Food and Fuel
30 March 2011, by Charles Wallace (Daily Finance)
http://www.dailyfinance.com/story/market-news/consumer-prices-are-rising-and-not-just-for-food-and-fuel/19896433/

The culprit is the U.S. dollar, which has fallen 5% in the last year. The inflation-adjusted, trade-weighted dollar, which is a measure of the greenback against the currencies of nations we trade with, now stands at its lowest level since the Federal Reserve began keeping records in January 1973.

[Letsbereal]

European Inflation Comes At 29 Month High Of 2.6%, Well Above Expectations, Sends EURUSD Above 1.42
31 March 2011, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/article/european-inflation-comes-29-month-high-26-well-above-expectations-sends-eurusd-above-142

Earlier Eurostat released its February European CPI number which was higher than January (2.4%) and consensus (2.4%), coming at 2.6%.

That is the fastest inflation growth in more than two years in March as European Central Bank policy makers prepared to raise interest rates to fight increasing price pressures

[agentbluescreen]

U.S. Inflation Expands Beyond Food and Fuel
30 March 2011, by Charles Wallace (Daily Finance)
http://www.dailyfinance.com/story/market-news/consumer-prices-are-rising-and-not-just-for-food-and-fuel/19896433/

The culprit is the U.S. dollar, which has fallen 5% in the last year. The inflation-adjusted, trade-weighted dollar, which is a measure of the greenback against the currencies of nations we trade with, now stands at its lowest level since the Federal Reserve began keeping records in January 1973.

While Ford will also have to rise prices not only to avoid being swamped with orders it cannot fill but to pay for more expensive parts now largely made outside the US, not including the main cost of everything, which is fuels in the 'LIAR-CPI' is pure hocus-pocus lying that conceals vastly higher real, actual inflation and tax-inflation. You can't even run out to or open your door to the wintery blast to pick up a newspaper to read such lies without spending more to read them.

The tragedy here is grossly inflated housing - real estate bubble prices which are doomed to crash severely in the coming depression which as a taxable corporate-socialist wealth-tax-rent asset that people can no longer even afford to live in let alone keep or rent out (to be used and abused) for an income that is not also inflated-rent-taxed by starving greedy local-communist party governments now holding gluts of wealth-tax-rent-defaulted lands they can scarcely even give away. This says nothing of the gluts of mortgage default repossessed properties held by banksters which they also cannot sell for the ridiculous prices they are nowhere near worth.

[Letsbereal]

Wal-Mart US CEO To America: "Prepare For Serious Inflation"
31 March 2011, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/article/wal-mart-ceo-america-prepare-serious-inflation

See Also:

Santellli on the roque http://www.cnbc.com/id/15840232?video=3000014040&play=1

One problem if the EU is gonna raise rates first (which they probably will) they will replace the Yen carry trade and even more “hot money” will come in and create even more inflation.

Exactly were the cunning FED is waiting for. Ask China about “hot money”.

[Letsbereal]

Despite March Drop From All Time High, Near Record Food Prices Predict Jump In Headline Inflation
7 April 2011, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/article/despite-march-drop-all-time-record-food-prices-predict-jump-headline-inflation

Excerpt:

The UN's Food and Agriculture Organization, whose January print was the catalyst for us to predict revolutionary food riots ahead of time, released its March food price update

- "the Food Price Index (FFPI) averaged 230 points in March  2011, down 2.9% from its peak in February, but still 37% above March last year.

International prices of oils and sugar contracted the most, followed by cereals. By contrast, dairy and meat prices were up.

"So in essence the drop in the volatile energy component has been transitory, courtesy of WTI and Brent now at 30 month high, and the April number will be yet another surge.

Reuters agrees: "new increases are in sight as demand grows and supplies tighten, the UN Food and Agriculture Organisation said.

Rising food prices have climbed to the top of the international political agenda after contributing to protests that toppled the rulers of Tunisia and Egypt earlier this year, with unrest spreading across North Africa and the Middle East."

The spin: ""The decrease in the overall index this month brings some welcome respite from the steady increases seen over the last eight months," David Hallam, director of FAO's Trade and Market Division, said in a statement.

"But it would be premature to conclude that this is a reversal of the upward trend," he said." It isn't.

And with loose monetary policy expected out of the US for as wide as the eye can see, little if anything will change for a long time.

[Letsbereal]

Chinese inflation data understate price rise: ADB
6 April 2011, by Chris Oliver - Hong Kong (MarketWatch)
http://www.marketwatch.com/story/chinese-inflation-data-understates-price-rise-adb-2011-04-06

China's official consumer price index likely understates the real rate of inflation, according to the Asian Development Bank's Outlook 2011 report, released Wednesday.

The report said that while Beijing made adjustments earlier this year to the way it calculates CPI -- lowering the food component and raising housing -- the data don't really capture actual price movements.

Chinese statistics were prone to low-ball the CPI reading "because its composition and weights have not been significantly adjusted to reflect the major changes in consumption patterns in the last decade," according to Beijing-based authors of the outlook's China chapter.

The ADB also said China's growth rate will moderate to 9.6% this year, from 10.3% in 2010, adding that inflationary pressures will likely continue to rise throughout 2011 before easing the following year.


China bank-credit rises $1.8 trillion in 2010: ADB
6 April 2011, by Michael Kitchen - Hong Kong (MarketWatch)
http://www.marketwatch.com/story/china-bank-credit-rises-18-trillion-in-2010-adb-2011-04-06

China's bank credit expanded by 11.8 trillion yuan ($1.8 trillion) in 2010, according to figures in the Asian Development Bank's Outlook 2011 report, issued Wednesday.

The credit figure included 8 trillion yuan in bank lending and an estimated 3.8 trillion yuan in off-balance-sheet loans channeled through trust companies, the report said.

[Letsbereal]

Irish inflation at 2-1/2 year high; adds to woes
7 April 2011, by Carmel Crimmins - Dublin (Reuters)
http://uk.reuters.com/article/2011/04/07/uk-ireland-economy-inflation-idUKTRE7363DB20110407

Excerpt:

Irish consumer prices jumped at their fastest annual pace in nearly two and a half years in March heaping pressure on consumers already stretched by falling wages, rising unemployment and harsh government cutbacks.

The consumer price index (CPI) rose by a stronger-than-expected 0.9% in March to stand 3% higher than a year earlier, official figures showed on Thursday, the fastest annual pace since October 2008.

----

The median forecast of seven economists polled by Reuters had been for a 0.4% rise on the month, giving an annual rate of inflation of 2.5%.

In February, the index rose by 0.9% and was 2.2% higher year-on-year.

----

"Global inflation seems to have taken off now and this is going to add to the difficulties of hard-pressed consumers, who are in no position to look for wage increases. Expected interest rate hikes will just add to their woes," said Alan McQuaid, chief economist at Bloxham Stockbrokers.

"It looks like inflation for the year will be 2.5%-3%, which is double what I expected at the start of the year."

Nearly a third of Irish homeowners are on variable interest rate mortgages and have already suffered a slew of rate hikes over the past 12 months as Ireland's bust banks sought to shore up their funding positions.

Around 50% of Irish mortgages track the ECB rate and an expected 25 basis point increase in the base rate will further squeeze them and push more borrowers into arrears.

----

The ECB is widely expected to raise interest rates from a record low 1.0% on Thursday to offset inflationary pressures.

Irish consumer prices, which have fallen 5.5% over 2009 and 2010, are now beginning to move in line with the rest of the euro zone.

Ireland's Harmonised Index of Consumer Prices (HICP), which is used for intra-EU comparisons, rose 0.5% in the month to give a year-on-year rate of 1.2% compared to 2.6% in the rest of the currency bloc.

[Letsbereal]

Holland: Price Explosion in supermarket
7 April 2011, (De Telegraaf)
(google trans from Dutch) http://tinyurl.com/3q3w4vv

Holland: Shopping considerably more expensive
7 April 2011, (NU)
(google trans from Dutch) http://tinyurl.com/4xobsn8

[Letsbereal]

China inflation threat underestimated
13 April 2011, by Emma Rowley (The Telegraph)
http://www.telegraph.co.uk/finance/china-business/8448921/China-inflation-threat-underestimated.html

Excerpt:

While many commentators suggest Chinese price rises are peaking, Mr Coulton believes that Beijing is not on top of inflation expected to come in at 5.5% for March which threatens a more painful tightening process to rein in prices than many expect.

"This means rising risk to the country's macroeconomic stability and of growth falling from the current 10% a year to 4% or 5%." Mr Coulton said.

If China's economic growth does halve as feared, it could have serious implications for the global recovery.

LGIM's argument is that soaring food prices are not a temporary driver of inflation, but reflect underlying pressures from rising demand rather than one-off supply shocks.

Lending has been expanding rapidly, while wage inflation is rising as cities find the pool of cheap labour from the countryside is not infinite.

In addition, measures from Beijing to rein in prices are running into difficulties, LGIM believes. Banks are "getting around" lending quotas with off-balance sheet transactions, which see loans repackaged as investment products.

[Geolibertarian]

http://forum.prisonplanet.com/index.php?topic=202354.0 (Is there a causative link between oil speculation and fuel prices?)

http://forum.prisonplanet.com/index.php?topic=204193.0 (What's the leading cause of the rise in food prices?)

[Letsbereal]

British 12-month inflation falls to 4% in March
12 April 2011, (AFP)
http://uk.finance.yahoo.com/news/British-12-month-inflation-afp-3851326167.html

British 12-month inflation falls to 4% in March from 4.4 % in February which had been the highest level for more than two years.


LOL UK 4% Inflation!!!! Think about the real super negative interest rates while the bank is not even highering interest rates normaly against inflation!

[Letsbereal]

S. Korea central bank raises inflation projection
13 April 2011, (AFP)
http://uk.finance.yahoo.com/news/S-Korea-central-bank-raises-afp-1581450277.html

Excerpt:

South Korea's central bank Wednesday increased its inflation forecast for this year to a three-year high of 3.9%, raising the prospect of an early rise in interest rates.

The Bank of Korea, in its revised economic outlook, maintained its December projection of 4.5% growth for Asia's fourth-largest economy in 2011.

Gross domestic product grew 6.2% in 2010 after a 0.3% increase in 2009.

The bank said the US economic recovery and an expansion in global trade are expected to offset the damage done by higher oil prices.

But it raised its 2011 inflation forecast to 3.9% from a previous estimate of 3.5%.

This was "mainly due to supply-side pressures like high oil prices and the outbreak of foot-and-mouth disease", it said in a statement.

The growth forecast is the same as that made by the International Monetary Fund on Monday. But its inflation estimate is lower than the IMF's predicted 4.5%.

South Korea is battling growing inflationary pressure, sparked by strong economic growth and rising oil and food prices.

The bank said core inflation, which excludes oil and food prices, is expected to rise to 3.3% this year compared to its earlier estimate of 3.1%.

Its revised outlook came one day after it froze the key interest rate at 3%. Analysts expect an increase in May to combat inflationary pressure.

Separate figures released Wednesday showed that the unemployment rate rose in March from a year earlier, but that the number of newly created jobs grew sharply as the private sector continued to expand recruitment.

The rate was 4.3% last month, up from 4.1% a year earlier but down from 4.5% in February, Statistics Korea said.

[Letsbereal]

Inflation darkens Indian outlook
13 April 2011, by Kunal Kumar Kundu - Bangalore (Asia Times)
http://www.atimes.com/atimes/South_Asia/MD13Df01.html

Excerpt:

India stands out among the emerging market growth stories as a country with an uncomfortably low (read negative) rate of real interest,

meaning the inflation rate is substantially above the policy rate, despite the central bank raising key rates eight times in the past 13 months.

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The bank itself has conceded that it has under-estimated the level of inflation - a month after forecasting 7% inflation for March it raised the figure to 8%.

For a long time, the RBI has been in denial mode and has kept on hoping that inflation would remain under control. Clearly, it missed out on the bigger picture.

To the central bank's chagrin, India's inflation rate for February 2011 stood at 8.31%, still above the expected rate.

Although the final inflation figure may yet come down for March, there's no gainsaying the fact that inflation is now the biggest bugbear and is occupying the minds and research space of economists of various hues.

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Not to be left behind, the opposition All India Anna Dravida Munnetra Kazhagam is giving them a run for their money with its own set of schemes.

Whoever comes to power will more than exhaust the state coffers by even trying to partially meet promises made. The natural consequence is a further increase in deficit.

While the government in its recent union budget projected a fiscal deficit of 4.8% of gross domestic product (GDP), the final deficit figure will be beyond 5%, most likely in the region of 5.3-5.5% of GDP.

----

Rising inflation and interest rates will squeeze corporate profit margins.

Also, high interest rates will not only lead to a slowdown in leveraged consumption - it will lead to increased preference for saving over consumption.

Even domestic investment is likely to face a slowdown because of inflation.

To conclude, with inflation conjuring up the fiercest headwind being faced by India this year, the country needs to brace for slower economic growth.


See Also:

Indian industrial growth slows to 3.6% 11 April 2011, (AFP) http://uk.finance.yahoo.com/news/Indian-industrial-growth-afp-483812730.html

[Letsbereal]

Rising Chinese wages make for inflated outlook - Domestic inflation in advanced economies is no longer immune from events in China
13 April 2011, by Rahul Jacob and Chris Giles (Today Online)
http://www.todayonline.com/Commentary/EDC110413-0000406/Rising-Chinese-wages-make-for-inflated-outlook

Excerpt:

Two months ago, Mr Zhu Xinzhi, head of a lighting manufacturers' association in the industrial city of Foshan in southern China, set off for Guangxi on a recruiting trip. Offering a monthly wage of 1,600 yuan (S$308), he hoped to attract 500 workers; he got 10.

Alternative opportunities, high inflation and a recent trend of rising wages made his jobs unattractive.

"The workers felt the salary was relatively low and that it's better to stay home and run their own small business or go to cities with higher pay," he says. "The salary we offered has no advantage any more."

The reverberations from China's rising wages, alongside rapid economic growth there and in fellow emerging economies, were felt in far-off Frankfurt this week.

That Mr Zhu might have to pay more to recruit workers will raise the price of light bulbs imported into Germany from China.

If the process is replicated in the prices of other Chinese goods, inflation in Germany and other European nations will be permanently higher, requiring action by the ECB.

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It is not just the ECB that looks at China and sees a more inflationary future. This week the People's Bank of China, the central bank, raised rates for the fourth time since October, as well as taking other action against price rises. Others are expected to follow suit by the end of the year.

The International Monetary Fund expressed concern in the World Economic Outlook published this week that oil scarcity combined with rapid growth in oil-intensive emerging economies would continue pushing oil prices higher year after year. In February, Mr James Bullard, president of the St Louis Federal Reserve Bank, raised the question of whether inflationary pressures might mount in the United States despite high unemployment because there was little or no slack in the global economy.

The potential worldwide consequences of local trends make it impossible for policymakers to ignore the Chinese labour market and its links to the global economy.

----

The improved prospects for Ms Wangli and Ms Xiaoye are far from a disaster for advanced economies, but it is likely that the days of ever cheaper imported labour-intensive low-wage Chinese goods are coming to an end.

If China is no longer exporting deflation, domestic prices in Europe and the US will have to be kept on a rather tighter rein in future.

[Letsbereal]

Prices for U.S. imports jump 2.7% in March - Fuel costs up 36.6% over the past six months
12 April 2011, by Jeffry Bartash - Washington (MarketWatch)
http://www.marketwatch.com/story/prices-for-us-imports-jump-27-in-march-2011-04-12

Excerpt:

The prices paid for goods imported into the U.S. jumped 2.7% inMarch, the biggest increase in nearly two years, as fuel and food costs accelerated, according to government data.

Import prices have risen more than 1.0% in each of the past six months and they have climbed 9.7% over the past year, marking the largest 12-month increase since April 2010.

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Higher costs for necessities such as fuel and food mean consumers have less money to spend on other things.

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Once again, the rising cost of imported petroleum drove prices higher. Fuel prices have surged 36.6% over the past six months, sparked by both rising demand and political instability in the Mideast.

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Excluding fuel, import prices rose 0.6% in March, spurred by the biggest increase in the cost of food, feed and beverages in nearly 17 years.

Over the past year nonfuel import prices have jumped 4.2%, reflecting the largest 12-month increase since October 2008.

Food import costs have been on the rise as demand for agricultural crops around the world intensifies.

A weaker dollar, partly the result of Federal Reserve efforts to keep interest rates low, has also led to higher import costs. It takes more U.S. currency to buy the same amount of imported goods.

----

The price of goods exported by the U.S. to other nations, meanwhile, rose 1.5% in March. Over the past year export prices have risen 9.5%, the highest one-year increase since July 2008.

The increase has been driven by higher prices demanded by producers of farm goods such as cotton, corn, wheat and soybeans.

[Letsbereal]

China March consumer prices up 5.3%-5.4%: report
14 April 2011, by Sarah Turner (MarketWatch)
http://www.marketwatch.com/story/china-march-consumer-prices-up-53-54-report-2011-04-14

China's March consumer price index rose between 5.3% and 5.4% compared to a year ago, according to reports of an account from Hong Kong broadcaster Phoenix TV.

The Phoenix report came a day ahead of the data's official release.

The report also said March M2 money supply rose 16.6% compared to the year-ago period.

[Letsbereal]

U.S. wholesale prices rise 0.7% in March - Higher gasoline prices spur increase, but food costs fall
14 April 2011, by Jeffry Bartash - Washington (MarketWatch)
http://www.marketwatch.com/story/us-wholesale-prices-rise-07-in-march-2011-04-14-90310

Excerpt:

U.S. wholesale prices rose sharply in March, spurred once again by higher gasoline costs, but food prices fell for the first time in seven months.

The producer-price index climbed a seasonally adjusted 0.7% in March, following a 1.6% gain in February and a 0.8% increase in January, according to the Labor Department.

The core rate, which excludes the volatile food and energy categories, rose 0.3% in March. Higher prices for light trucks accounted for a large chunk of the increase.

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Over the past year, wholesale prices have jumped 5.8%, stoking concerns about higher inflation. Other price indicators have also flashed warning signs.

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Energy costs rose 2.6% in March, and they’ve shot up 17.6% over the past 12 months.

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The price for food paid by producers has risen 4.4% over the past year.