Food Sellers Grit Teeth, Raise Prices

The cost of nearly everything we consume (food and energy) are soaring. Yet, despite this reality, the headlines and numerous experts continue to cite the fear of deflation and relatively tame year-over-year consumer price index changes as means to justify further quantitative easing (currency devaluation). Since the market is always right, it's easy to figure who's got it wrong.

Expect the food sellers, in other words food consumers (us!), to continue gritting their teeth as long as spot commodity prices are surging to new highs.

Spot Commodity Prices: CRB Spot Index (1947 - Present);
16-Raw Industrial Spot Price (1935-1947);
Great Britain Wholesale Price of All Commodities (1885-1935):


Soon the experts will be out in force recommending reallocation towards "hot" commodities despite the direction of the secular trends illustrated below.

Spot Commodity Price Index (CRBSPOT) to Gold Ratio:


West Texas Intermediate Crude Oil to Gold Ratio (Oil/Gold):

An inflationary tide is beginning to ripple through America's supermarkets and restaurants, threatening to end the tamest year of food pricing in nearly two decades.

Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months. And food makers and retailers including McDonald's Corp., Kellogg Co. and Kroger Co. have begun to signal that they'll try to make consumers shoulder more of the higher costs for ingredients.

Source: online.wsj.com
From Bob