Wholesale prices: Highest annual rate in 27 years

[Amerigo Vespucci]

Source: CNN Money

NEW YORK (CNNMoney.com) -- In another indication of growing inflation, wholesale prices increased in July to the highest annual rate in 27 years, according to a government report released Tuesday.

The annual Producer Price Index for finished goods rose 9.8% in the 12 months that ended in July.

The jump in wholesale prices is the fastest rate of increase since a 10.4% bump-up in June 1981, according to Joseph Kowal, economist at the Bureau of Labor Statistics.

The surge in producer prices is in large part due to higher energy prices, said Doug Roberts, chief investment strategist for ChannelCapitalResearch.com.

Read more: http://money.cnn.com/2008/08/19/news/economy/producer_prices/?postversion=2008081910

[David__77]

1. It's gonna trickle more into consumer prices soon.

I would not be surprised to see double-digit consumer inflation. Not too likely, but possible. There's a perfect storm of financial crisis ahead.

[CountAllVotes]

2. it is a great time to be holding

old I-bonds & gold IMO.

:kick:

[natrat]

3. bad shit about to happen-you cant buy phyical gold for the last three weeks

ie some big hand is scooping it all up while the price is being pushed down

[CountAllVotes]

4. really?

I had not heard this. I know the U.S. Mint just released their 2008 Buffalos. Price is outrageous - an uncirculated proof set for $1960.00. I cannot afford one of these. That is over $1,000.00 an oz.

Yikes.

Now you have me really worried. I've noted that Kitco has a message up about gold pricing now. Here is the message posted on kitco.com FYI.

>> IMPORTANT NEW NOTICE: Demand for bullion products has increased significantly in recent days. As a result, we may experience delays in supply and possibly delays in processing and shipping by our vaults. We apologize for this inconvenience and will do everything in our power to service your orders as quickly as possible. While cancellation fees still apply, prices are guaranteed regardless of the length of the delay. We remain committed to providing you the best service no matter what market conditions prevail.

:scared:

[roamer65]

10. Wait for the 2009 ultra high relief Saint Gaudens...

coming out next year from the mint. It will be a remake of a ultra high relief Saint Gaudens pattern originally struck in 1907, but it will be dated "MMIX" (2009). It will be a much prettier coin than the Buffaloes and should be lower in price.

http://www.usmint.gov/pressroom/index.cfm?action=photo#UHRDEC

[Gman]

5. I believe the term from 30 years ago was "stagflation"

and was used to beat Carter about the head and neck. Seeing how after a huge drop after 9/11, the market has gone no where but sideways for the duration of Bush's presidency, "stagflation" sounds like the proper term to end his "presidency" on.

[CountAllVotes]

6. it could be deflation

which is worse.

I remember the Carter years very well. I do not remember those years being anything like what this country is going through now - not even close.

:kick:

[snappyturtle]

7. Agree. nt

[CountAllVotes]

8. more re: deflation ...

Is Deflation Good or Bad?

Actually, deflation itself is neither good nor bad. It depends on the cause of the deflation whether people will suffer or rejoice. As I said, if the cause is increasing supply of goods that would be good. Another example of this is in the late 1800's as the industrial revolution dramatically increased productivity.

However, if deflation is caused by a decreasing supply of money as in the great depression, that would be bad. The stock market crash sucked all the liquidity out of the market place, the economy contracted, people lost their jobs and then banks stopped loaning money because people were defaulting. The problem compounded as more people lost their jobs and money supply fell further causing more people to lose their jobs, etc. etc.

Note: During the Depression demand for money was high (but no one could afford it) because supply was low.

http://www.inflationdata.com/Inflation/Articles/Deflation.asp

Sounds kind of familiar doesn't it? :scared: again ...

:kick:

[snappyturtle]

9. Unfortunately, it sounds way too familiar! As I was reading your

second cause of deflation....a bulb went off in my very small, non-economic head....but i'm learning....the hard way!

edit: spelling

[populistdriven]

11. Its not the price of Oil, its the economy

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=3814477&mesg_id=3814477