The Blog

2021-

2021-12-14 c
FEDERAL RESERVE CREATES INFLATION III

EUREKA, Someone Finally Points Out The Obvious

Finally! Good grief, it’s been a long wait to see someone on the TV pointing out the obvious.

CNBC’s Steve Liesman points out what all the financial pundits keep ignoring.

The price of raw material at origination is still climbing…. which means the prices of intermediate manufacturing goods will keep climbing… which means the prices of finished goods (to wholesalers) will keep climbing….. which means consumer prices will keep climbing. WATCH

♦ Here’s the kicker. The rate of raw material price increases are still higher than the rate of intermediate price increases, which are still higher than the rate of price increases in finished goods, which are still higher than the rate of price increases in consumer goods (retail).

As long as the rate of price increase for raw material, the very first step in the supply chain, remains higher than the rate of the price increase for the next step in the process, then you can guarantee future prices will go up. It’s a simple and commonsense way to look forward when evaluating inflation.

If the stuff starts at a higher price (day one), the end product at day 90 will be at a higher price than today. This is how you can tell that inflation is not slowing down. The first sign of inflation easing is when the rate of inflation for raw material is lower than the rate of inflation in the next step. (read more)

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