The signs of inflation continue to appear in
the economy.
The Fed is ignoring this because the Fed is
afraid of deflation… despite food prices, energy prices, healthcare
costs, home prices and stocks soaring.
· FedEx is
increasing prices by 42% for some shipments.
· Commonwealth
Edison is raising electricity rates by 38% in June.
· Chipotle is
raising prices for the first time in three years.
· Netflix is
raising prices on new customers.
·
Colgate-Palmolive is raising prices.
These
are simply explicit price increases. Many companies have been raising
prices via a “stealth” price hike by simply charging the same
price for less of
a product. The latest example of this is bacon, but companies such as
Kellogg’s, Snickers, Tropicana, Bounty, Heinz, and others have been
using this tactic for some time.
Against
this backdrop, the Fed is openly stating that it wants to
create inflation. Put another way, the Fed is not only oblivious to
the fact inflation is already appearing in the broader economy, the
Fed actually wants to create more inflation!
Small wonder the US Dollar is teasing with
breaking multi-year support.
In its quest to fight the brief deflation of
2008-2009, the Fed has unleashed a wave of inflation. These
developments take time to unfold. But the signs are already there.
The grand theme for 2014 will see prices moving higher.
This
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Best Regards
Phoenix Capital Research
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