Inflation’s Collapse

[Guest]

ADM Lloyd , commodity canola , sep/oct/dec-$20.13

[Austrian Economics]

The reality of the current crisis is that prices are rising for some commodities and collapsing for others. For example, it's almost to the point where you cannot give away Russian crude while simultaneously European consumers are going to go bankrupt heating their homes. This is the reality of severe economic dislocation.

Rising wheat prices are great if you only look at one side of the ledger. Rising costs for fertilizer and fuel are going to eat up margins. For that reason, it's better to focus on profit margins. I don't think this crisis is going to be positive for margins, especially if the B of C follows through with more interest rate hikes.

[Austrian Economics]

So Govt wants to raise interest rates , isnt this counter to what your thinking?

Will interest rates go negative?

They will, but it will take a bit of time. Probably within the year for Canada. It make take a bank going wobbly to do it.

[wheatking16]

Selling your gold to buy wheat has paid a decent return.

The easy money of this trade appears to have been made.



https://klarenbachgrainreport.substack.com/publish

[errolanderson]

Interesting article from David Rosenberg this morning entitled;

Bank of Canada will have to 'kill the economy' to crush inflation.

Well, the 'kill the economy' appears well on-the-way . . . .

[errolanderson]

Are the panicked buying price highs in for oil, wheat and gold?

May Chicago / KC wheat off 20% from Monday highs. May MWE off about 15%. Crude oil could break $100 per barrel should OPEC budge on production? Gold swaying both sides of $2,000 . . . .

[furrowtickler]

Interesting graph when you think of who is / was in power in the US the past 4-5 years ...


BYW this started long before the Ukrainian situation that government and media are going to try to blame it on .

[furrowtickler]

Be interesting to see a Canadian version the past 10 years

[shtferbrains]

Interesting graph when you think of who is / was in power in the US the past 4-5 years ...


BYW this started long before the Ukrainian situation that government and media are going to try to blame it on .

That is a great chart.

The green lines are energy and drop below the line when Trump encouraged FF exploration and fracking bring down the cost of living in a buoyant economy.
Rapidly moved to the negative side with build back better theme.

[errolanderson]

Global economies clearly recessionary. Triggering commodity price meltdown . . . now in-progress.

Gold to crude oil to copper to lumber, even veg oils. Global urea prices appear now in-decline. Clear peak in inflation (in my view). Housing is a sitting duck as so-called housing shortage turns into a surplus likely in 2nd half of 2022.

Fed may be double thinking their 3/4% rate hike chatter talked about for May . . . .

Gov't policy and economies now in-a-skid . . . .

[sumdumguy]

Bank of Canada warning of 200 basis point rise in interest rates this month. That’ll be a big Whammy.

[errolanderson]

Bank of Canada warning of 200 basis point rise in interest rates this month. That’ll be a big Whammy.

Central bank policy is quite lost right now . . . Out-of-step with markets and reality.