Monday, December 14, 2009

We Haven't Beaten Inflation

Let's not let the Fed be too quick to pat itself on the back for levitating the U.S. out of a Great Depression. Inflation in some commodity prices is waiting for us:

Global food costs jumped 7 percent in November, the most since February 2008, four months before reaching a record, according to the United Nations Food and Agriculture Organization.

Farm prices this year lagged behind copper futures that doubled and oil’s 57 percent increase.

The Fed's deflation-fighting tactics will only accelerate the price increases driven by the natural forces described in the article. This is probably good news for gold (I still own ANV and GDX).