So, Mish, we have an earnings drought, manufacturing at depression levels and collapsing as I type, I would bet my last buck the employment report is going to be just sad on Friday.
And I say inflation is now running about the same temperature as it was in 1977, double digit at least. We all know housing (buy or rent) is that high, I just had to buy a couple boxes of Duraflame fireplace logs at Costco yesterday, I remember when I moved back from Las Vegas February 1st I got the last two boxes they had, $22.49 each and I was pissed because just a few years ago they were $14.99. They quit carrying them for the summer (in February???) and just got them in for the winter yesterday, $25.99, that is a 15.56% increase since February. By the way, it was one of the coldest February months on record, and it was one of the coolest summers we have ever had, we only barely got to 100 on three days, two were in the spring. Now we just had the coolest and wettest September anyone can remember. Frost last night already.
And I can go on citing almost everything I have to buy being up by at least ten percent in the last year with very few exceptions, but the worst of it is produce. Fresh food.
Normally we see winter pricing on fresh food that is a lot higher than summer and especially fall (harvest time) because in winter it is mostly imported. Mexico and Chile, Columbia are big food exporters to the US. But, this year the winter high prices never went away, even in September tomatoes are $1.99 and Onions $1.49, more than double the usual summer prices. Broccoli? Unbelievable, it is still over $2 per pound. And even canned goods, a can of refried beans usually 59 cents on sale two for a dollar, now a buck 79 on sale for a buck 49. For freaking beans!
Beef, hamburger is cheap now, I even saw premium 93% lean at $2.49 and the cheaper 80% at $2.79 this summer, but there is a reason for this that spells disaster, dairy farms are going under at a record pace and their herds are being turned into ground beef, most are elderly milk cows going to slaughter and they are too old and not raised to be beef cows. Once they are gone hamburger is going to skyrocket and so are dairy products. Otherwise, steak cuts are ranging between $16 and $32 for fillets. And fuck me but pork is sky high, because China is a huge pork consumer and they have had to slaughter (still are) their pigs because of African swine flue in their stocks. Guess what? African swine flu was just identified in Hungary as the cause of death in 5 feral boars in Europe. Soon North American pork will be the only pork on the market, look for pork to double by Christmas and an Easter ham next year will be had only by people that see this and buy today and freeze it. We are talking probably $10 per pound for bacon if not more.
Oh and gasoline. Those who say we can't have inflation without gas prices rising, go diddle yourself, they are rising. Yes, there was an attack on Aramco facilities that slashed Arabian production by half but, we now import less than 10% of our oil, (91% of our oil consumption is domestic) and most of the rest comes from Canada or Mexico. On that very day gasoline went up about $12 cents before the stations closed that evening and in the days since SA claims that production is back to normal, so fuel prices have dropped back to normal right? Not on your nelly. It went up again last Friday, and again today, was $2.69 here before the attack, just went to $2.93 today. And premium is now $3.31, these are record price fixing profits, the markup from refiner to pump has never been higher, ever. Either in gross amount or as a percentage. That is also a major warning sign of recession, every time gas goes high in relation to other prices we fall into hard times. Gas might be cheaper than by some historical standards, but last year (I know you all have very short memories) gas was at least a dollar cheaper in most markets, BEFORE the attack on Aramco, I remember it was $1.69 in Las Vegas last October because I had to buy premium at $2.019 and thinking damn, I wish I could buy regular. Under two bucks a gallon. Now I pay more than 3. Short memory or not fuel is now near 70% higher than last year. That is not even inflation, it is hyperinflation.