Now, they «re mainly talking
about commodity inflation around metal prices like aluminum and steel and oil prices, which translates to the higher packaging costs for many companies.
Not exact matches
While the
inflation impact from higher oil prices and
commodity prices in general, continue to pump up
inflation expectation and push bond yields higher, keep in mind that much of the recent spike in Yields is
about as much
about supply as it is
about inflation.
The firm's commodity strategists reiterated their call in early February, just before the stock market got rocked by concerns about inflation and higher interest rates.
The
inflation sensitivity is high for
commodities with an
inflation beta near 15 for world production weighted indices (near 70 % in energy) and closer to 10 for equally weighted indices with
about 1/3 weighted in energy.
It is a familiar concept that
commodities have provided
inflation protection as discussed in a recent post
about a discussion I had with Bluford Putnam, Managing Director and Chief Economist, of our partner, CME Group, to discuss why
inflation is likely to appear this year.
When there's uncertainty in the air and investors become fearful
about the economy and major investment markets, we often hear of them flocking to and investing in gold because as a
commodity, it's
inflation proof as a tangible asset.
Vanguard found that an investment in
commodities over the 26 years to 2009 would have provided an annual return of just 2.1 %, just
about the rate of
inflation.
Investors and asset managers who didn't understand the operational realities of the monetary system made devastatingly erroneous predictions
about the direction of interest rates,
inflation, stocks,
commodities and the economy in general.
In just over five years, the price of the
commodity — electricity — increased 62 %, a multiple of the
inflation rate during that five years, which added
about $ 400 to the average consumer bill.
If you know consumers who are looking for a hedge against the rising cost of
commodities and the
inflation that usually accompanies it, you have a story to tell them
about real estate.