06-26-2013 06:41 AM
Heck of a morning here in Chicago.
Raining so hard I saw the animals walking two by two.
Story of the morning is gold. Getting killed on deflation concerns. Down $47 to $1230. This is telling us that there is no inflation out there and those that bought gold as a hedge are having to exit and it hurts.
Corn is slightly higher by 1 to 2 cents. July corn is up 5. Wheat up 2 and soybeans are down 6 to 7 cents.
Russian wheat production seen below target estimates. China corn seen rising to a record while imports jump to an all time high as well. Hhmm what is going on there?
Soybeans are lower on fears that the USDA may raise acreage estimate. We shall see. The USDA has been good at delivering the unexpected as of late.
Today we get Mortgage Applications, GDP and Personal Consumption. They all will help give us a clue as to what Ben Bernanke may have seen last week.
06-26-2013 08:01 AM
I Call Bull Chit on NO inflation.
Go try to buy something real...not that plastic crap from shinola.
Bought a new swather 7 seasons ago $20,500
Tried to trade it for a new one, same size and brand
They now start out at $40,400 They wanted $17,700 difference.
Really no big differences or improvements. (mine is not all beat up either, just used)
7 years and they have almost doubled. NO INFLATION yea right. Somebody needs to get out more.
06-26-2013 08:10 AM
Scott I read your post every day and have met you in person. I have to say that office folks vs. people with boots on the ground can sure view things a lot differently. You guys up there must have a lot of cups and strings.
06-26-2013 12:26 PM
The proof is in the pudding.
I would agree that the ag sector has had higher prices in everything. And, the ag sector has been one of the best sectors as far as economic growth here in the States. But, the economy has more to it than just the ag sector.
Today the government released GDP and it was at 1.80%. That is UNBELIEVABLE considering that we are pumping $85 billion into the economy every month. We should be collectively appalled at the pace of this recovery. GDP should be at 6% or 7% percent with stimulus like that. Maybe its not a stimulus, just a stimulant.
While I realize that farmland prices have been sky rocketing, ask the average man on the street about the price of his or her house. While we have rebounded slightly from the lows, house prices are nowhere near where they were 7 years ago. The lack of sellers and institutional buyers have been behind the rebound.
We have a record 48 million people on foodstamps while we are the worlds number one food producer and have a stock market at record highs. Go figure.
Our unemployment rate is still at 7.60% and actually went up .1% last month, not down. Manufacturing is trending ever so slightly lower.
Yes, corporations are reporting decent profits considering expectations but those expectations have been set at record low levels and those companies have been cutting themselves to profitability not growing themselves to profitability.
Europe is in real trouble, and China is starting to catch a cold. Japan has embarked on a QE program that eclipses ours in real terms because to the trouble they are in. It is pretty hard to find any good news and I am an optimist.
Mark my words, we at risk of running into a deflationary cycle which is a psychological problem not an economic one which makes it ever more dangerous. Think about it, we pump $85 billion into this economy EACH MONTH and the best that we can do is a GDP of 1.80% ???
06-27-2013 10:21 AM
The housing market is booming in Tulsa. Not the $150K houses. Not much demand for them but the $350K on up cannot build to demand. BTW todays $400K houses were $300k before the bust so there is inflation in home building. Not so much in preowned houses.
$85B per month. Is that to stimulate business or to prohibit Government financial collapse? Business needs customers more than anything but what percentage of sales is foreign goods. If we are not buying american, how will we ever stimulate domestic production and domestic sales?
Our objectives seem to be corporate profit and wage suppression. How can we expect workers to pay taxes and buy consumer goods without improving wages and benefits?