Yes, we have no inflation

[rapier]

We have no inflation today.

Or none reported anyway because the Connerce Department didn't release its monthly Producer Price Index for January this week. Why you ask? Well apparantly the index is in the shop for repairs.

Truth be told it's running a bit hot and they want to find a way to cool it off.

Read Doctor Stool's comments on it.

http://www.capitalstool.com/stoolfactor.htm

[Turbineguy]

1. Page contains Avenue A spyware

[rapier]

2. OK

I'm a member and always sweep with AdAware in background so I tend to ignore these things. I don't much like that he has to rely upon advertisers like that but they are easily taken care of and the site is just too important, to me anyway, to give it up.

[Gulf Coast J]

3. The Labor Department, not Commerce does PPI

The Bureau of Labor Statistics is in charge of putting out the PPI. That mistake alone should set off a flag. I think I'll wait until somebody with more credibility than Stepan N. Stool, Chief of Stock Proctology confirms this conspiracy theory.

[rapier]

4. notes

That was my mistake. The source of the PPI report is secondary. More than ever before all government agencies are being politicised under Bush. Labor, under the absurd Mdm Chow, or Commerce under Happy Talk Evans are two peas in a pod.

Nobody believes the governmant inflation statistics anymore. Under Clinton there was a concerted effort to configure the indexes so as to downplay inflation. All economic statistics are suspect now in ways that are very obvious to even the slumbering press corp and public. The employment ones being the most obvious. That has accelerated under Bush. Perhaps it is coincidence that with inflation now trending upwards that the PPI is being delayed. That is scondary. Conspiracy has nothing to do with the FACT that all inflation measures are rising.

This delay in the relase of the PPI is virtually unprecdented. If they are not ready with then new tweaks to the index then simple common sense says use the old one. It does stink to me and many others but that isn't the largest point.



Underneath the scatological humor is a very sophisticated analysis of, in this case, the statistics relating to inflation.

Feel free to offer some statistics and analysis which shows that inflation is not trending upwards, please.

Energy, food, health care, education, lumber, copper, gold, silver, aluminum, ocean shipping, and the list could go on and on, are trending upwards. This is undeniable.

The trends may reverse. So be it. You can show perhaps why they will, but that will be opinion. Offer it if you will. But don't forget the current trend.

The one thing that isn't inflating is income. In post war recoveries after 24 months income has averaged a rise of 17%. This time it is less than 4%. This disparity heightens the effects inflation will haveon housholds and contains a hint of the possible troubles ahead.

The supposed most sophisticated economic mind extant, Al Greenspan, is a lying old fool. Or so say I. Do you prefer a Larry Kudlow offering the party line like a wind up doll. Or is the 'analysis' from ever pure and disinterested Wall St. more to your liking.

5. Nice job

I agree, something isn't right.

I called the BLS and they gave me the lame excuse that the computer program was broken.

They could do the calculations manually with a spread sheet, or go back a version in the program!

[rapier]

6. notes

"As announced on February 17, the release of the Producer Price Index (PPI) for January 2004 has been delayed from the originally scheduled date of February 19, 2004. The length of that delay now means that the release of February data originally scheduled for Friday, March 12, must also be postponed."

US Dept. of Labor
http://www.bls.gov/ppi/delaynotice.htm

Not to worry though because yes, we have no inflation.

March 4 - Market News (Gary Rosenberger): “Prices for steel in the U.S. are soaring on rising raw material costs, strengthening global demand and domestic supply constraints, creating painful inflationary pressures among manufacturers who consume steel, say industry officials. The price for hot-rolled steel, a benchmark product, has more than doubled in the last six months -- with the biggest increases having occurred since January, they say. Producers say the price rise is occurring in the context of unprecedented increases in the cost of raw materials and a global ‘bull market’ for all commodities, from rice to tin, amid a recovering world economy. All have slapped on hefty ‘raw materials’ surcharges on the order of $90 to $100 a ton on top of base price increases in response to unprecedented increases in the price of ore, coke, natural gas and, most critically, scrap steel. Users of finished-steel products complain of severe supply constraints and of enforced price increases amid contracts that are not as ironclad as they thought. But what is clear is that the tables have turned on giant manufacturers that have long squeezed their suppliers -- and suppliers are happy to return the favor. ‘All those companies that were making record profits while their suppliers were losing money are now getting their payback,’ said a major steel distributor. ‘Prices keep changing by the week, by the day and by the minute. As soon as I hang up the phone, there’ll be a new price.’”

Taken from this weeks Credit Bubble Bulletin.
http://www.prudentbear.com/creditbubblebulletin.asp

It is entirely possible that real inflation could be well over 5% this year. Currently benchmark 90 T bills are at .95%. Making for a negative interest rate of officially -2% or so but which could easily be -5% or -7% or even -10% if they stay there and prices keep jumping up.

Will Al keep Fed Funds at 1%? Sure he will. He has to. So speculators can leverage into commodities with free money reinforcing the trend.

7. Call the FBI?

I am thinking this should be reported to the FBI.

I noticed a strange change in the December PPI number. Now, two reports missing since then.

This information is very important and valuable to financial markets.

According to my study, the BLS would have no problem going back to the previous categories. I called them and they claimed it was a problem with a computer program, but I know better, since I am a computer scientist!

[rapier]

8. notes

It isn't a crime unless they are required by statue to release the number monthly.

The number is "valuable" to the financial markets only when it confirms low inflation so the absence of ones reporting higher or much higher inflation are of great value to the financial markets as well. That being a play on the world 'value'. Boosting the 'value' of financial assets is, de facto, the purpose of all such statistics now.

These numbers could, and I emphasize could, be a bomb to the markets when they come out. I wouldn't bet on it. I think already people are preparing for more 'reported' inflation. THe meme is already beginning to circulate that inflation is good for the markets. This expectation will be allowed to percolate a bit more and the PPI will come out coincident with some gigantic story which will mute or mask the initial reaction.