Filed under: Trader Dan Norcini
Dear Friends,
I missed this story from yesterday but felt it was significant enough to bring it to your attention as it has a parallel here in the US.
The headline is entitled; “Inflation Jumps in Europe”.
When you read the story note the first sentence well: “Higher prices for food, oil and other commodities are starting to stoke inflation in the euro area…”
This is precisely what we have been warning you about that was going to occur over here based on the chart of the CCI (Continuous Commodity Index). The fact is food prices are globally connected nowadays with rising prices in one quarter of the globe spilling over into the rest. Monty has spoken to rising inflation in the emerging markets in his newsletters; now it is becoming evident that inflation is surfacing in the developed world, protestations and denials by the monetary authorities to the contrary.
You will also notice that the job situation in the Euro zone is not particularly healthy, meaning wages are flat over there as well. The pundits constantly refer to this fact when they assure us that inflation is manageable. Excuse me to differ; yes – upward pressures on wages are non-existent but that does little to soothe the problems of the average citizen who are watching the cost of the essentials of life moving higher as his or her wages go nowhere. Translation – more of the disposable income of the consumer is forced to pay for the necessities of life leaving less for discretionary spending. Oil’s first foray above the $91 level already has seen the headlines trumpet the charge: “OIL PRICE ‘ENTERS DANGER ZONE’”. Wait until gasoline enters its peak demand season later this year!
The monetary authorities are playing a very dangerous game in attempting to stoke the fires of inflation to ward off the icy fears of deflation. By beating back the latter and seeking to generate “growth”, they may find their creation not so compliant and manageable as they might believe.
Perhaps there are some marching orders given to the primary dealers to see what can be done about those pesky commodity markets.
ARTICLE:
http://finance.yahoo.com/news/Inflation-Jumps-in-nytimes-130499028.html;_ylt=AsOkxtbyRQJ2NQZftSl7H_67YWsA;_ylu=X3oDMTE2bmRqbGQwBHBvcwMxMQRzZWMDdG9wU3RvcmllcwRzbGsDd2hhdHlvdXNob3Vs?x=0&sec=topStories&pos=7&asset=&ccode=
I missed this story from yesterday but felt it was significant enough to bring it to your attention as it has a parallel here in the US.
The headline is entitled; “Inflation Jumps in Europe”.
When you read the story note the first sentence well: “Higher prices for food, oil and other commodities are starting to stoke inflation in the euro area…”
This is precisely what we have been warning you about that was going to occur over here based on the chart of the CCI (Continuous Commodity Index). The fact is food prices are globally connected nowadays with rising prices in one quarter of the globe spilling over into the rest. Monty has spoken to rising inflation in the emerging markets in his newsletters; now it is becoming evident that inflation is surfacing in the developed world, protestations and denials by the monetary authorities to the contrary.
You will also notice that the job situation in the Euro zone is not particularly healthy, meaning wages are flat over there as well. The pundits constantly refer to this fact when they assure us that inflation is manageable. Excuse me to differ; yes – upward pressures on wages are non-existent but that does little to soothe the problems of the average citizen who are watching the cost of the essentials of life moving higher as his or her wages go nowhere. Translation – more of the disposable income of the consumer is forced to pay for the necessities of life leaving less for discretionary spending. Oil’s first foray above the $91 level already has seen the headlines trumpet the charge: “OIL PRICE ‘ENTERS DANGER ZONE’”. Wait until gasoline enters its peak demand season later this year!
The monetary authorities are playing a very dangerous game in attempting to stoke the fires of inflation to ward off the icy fears of deflation. By beating back the latter and seeking to generate “growth”, they may find their creation not so compliant and manageable as they might believe.
Perhaps there are some marching orders given to the primary dealers to see what can be done about those pesky commodity markets.
ARTICLE:
http://finance.yahoo.com/news/Inflation-Jumps-in-nytimes-130499028.html;_ylt=AsOkxtbyRQJ2NQZftSl7H_67YWsA;_ylu=X3oDMTE2bmRqbGQwBHBvcwMxMQRzZWMDdG9wU3RvcmllcwRzbGsDd2hhdHlvdXNob3Vs?x=0&sec=topStories&pos=7&asset=&ccode=
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