Head fake correction.

Discussion in 'Economy' started by william the wie, Feb 23, 2011.

  1. william the wie
    Offline

    william the wie Gold Member

    Joined:
    Nov 18, 2009
    Messages:
    7,298
    Thanks Received:
    675
    Trophy Points:
    175
    Ratings:
    +1,614
    Dent and others are calling for a slight correction (less than 10% decline) then a rally until primarily food inflation derails it. There are two major problems with this scenario:

    Food is not counted in published inflation numbers.

    Most of the costs will be borne by importers of US foods: instant grits/polenta/cous-cous for example are generally processed in the importing country at less efficient domestic processing plants. Similar local differences in the processing of potatoes, wheat, rye, barley and oats also raise overseas prices.

    Unless Russia, Argentina, Brazil, the Ukraine and Pakistan have much better than expected crop yields the US and its ethanol program will blamed for everything bad. This could lead to some very big economic problems.
     
  2. pinqy
    Offline

    pinqy Gold Member

    Joined:
    Jun 8, 2009
    Messages:
    5,052
    Thanks Received:
    574
    Trophy Points:
    165
    Location:
    Northern Virginia
    Ratings:
    +1,009
    Yes, it is.
     

Share This Page