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CPI : Consumer Price Index, for US - Index, charts, etf


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CPI : Consumer Price Index, for US - Index, charts, etf

 

One of the Fed's Favorite Tools

============================

 

CPI-etf suggests 5 year inflation is under 1% p.a. (which looks too slow) :

CPI-index shows CPI inflation to May'2013 is under 2% p.a.

 

t4q.gif : components : tables :

 

The Fed targets CPI inflation of 2% p.a., so this gives clues as to future Fed policy,

 

Current clue : CPI is rising too slowly, and so more stimulus may be needed.

But there's a danger that stock (and bond) prices will continue to bubble up,

so some shaking of confidence was necessary before more stimulus could be provided.

 

This WEEK's MOVES : === and on Friday alone =====

.

CPI- : $25.66 : + 1.17% / $25.96 : - 0.02 : - 0.06% : 12,501

 

CPI / IQ Real Return etf... 5-Yr.Weekly: Daily-chart // CRB : CRB-vs.DBA, OILB // Latest CPI etf: official

 

dif.gif :

 

It seems to lag behind Gold price moves : GLD-vs-CPI : 6mos

 

Note : Targeted rate is about 2% p.a.

 

---- Year 1 : $25.25 : $25.50 : $25.75 : $26.00 :

---- Year 2 : $25.50 : $26.01 : $26.52 : $27.04 :

---- Year 3 : $25.76 : $26.53 : $27.32 : $28.12 :

---- Year 4 : $26.02 : $27.06 : $28.14 : $29.25 :

---- Year 5 : $26.27 : $27.60 : $28.98 : $30.42 :

 

$25.00 to $26.27 is 1% per annum, over 5 years.

Current level of the CPI-etf is a little lower than that.

Is more "stimulus" needed ??

 

The Actual Data TABLES below, show that the CPI-etf is understating the reported figures by an important amount.

 

FROM CPI TABLES ... link

==== : = Jan = : = Feb = : = Mar = : = Apr = : = May = : = Jun = : = July = : = Aug = : = Sep = : = Oct = : = Nov = : = Dec = : = Ave = : toDc Ave

2007 202.416 203.499 205.352 206.686 207.949 208.352 208.299 207.917 208.490 208.936 210.177 210.036 207.342 : 4.1 2.8

2008 211.080 211.693 213.528 214.823 216.632 218.815 219.964 219.086 218.783 216.573 212.425 210.228 215.303 : 0.1 3.8

2009 211.143 212.193 212.709 213.240 213.856 215.693 215.351 215.834 215.969 216.177 216.330 215.949 214.537 : 2.7 -0.4

2010 216.687 216.741 217.631 218.009 218.178 217.965 218.011 218.312 218.439 218.711 218.803 219.179 218.056 : 1.5 1.6

 

2011 220.223 221.309 223.467 224.906 225.964 225.722 225.922 226.545 226.889 226.421 226.230 225.672 224.939 : 3.0 3.2

2012 226.665 227.663 229.392 230.085 229.815 229.478 229.104 230.379 231.407 231.317 230.221 229.601 229.594 : 1.7 2.1

2013 230.280 232.166 232.773 232.531 232.945 233.505

====

Yr.'13: +1.59% : +1.97% : +1.47% : +1.06% : +1.36% : +1.75%

Mm'13 +3.58% : +9.83% : +3.13% : - 1.25% : +2.14% : +2.88%

=====

 

Relative Importance of CPI Components, 2012

 

All Items --------------- 100.0%

Housing -------------- 41.021%

: Owners equiv.rent ----------- : 24.041%

: Rent, primary resid.---------- : 06.545%

: Household energy------------ : 04.099%

Transportation------- 16.846%

: Motor fuel ---------------------- : 05.462%

Food, Beverages-- : 15.261%

Medical care ---------- 7.163%

Education, comms.- : 6.779%

Recreation ------------ 5.990%

Apparel ---------------- 3.564%

Other goods, service 3.376%

=====

/source: http://www.bls.gov/cpi/cpiri2012.pdf

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Long Term chart : CPI, 1913-2006 (since founding of the Federal Reserve system)

 

- Now targeting about 2-3% per annum

 

5m51.png

 

The chart above show the Deflation in the 1930's that Bernanke is keen to avoid.

But the actual rate of inflation may be much higher than the reported rate:

 

alt-cpi_b.png

 

/ source: http://www.ShadowStats.com

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To help spot Turning points in CPI / use CRB (the Commodity Research Bureau index, and etf)

 

CRB vs. DBA and Oilb ... 4-year update : 1-year

 

qes.gif

 

It is possible that the recent drop in CRB (and CPI) is reversing - but there is not much confirmation yet,

That would come if CRB can get back above MA, and flip the MA's back to a rising trend.

 

CRB Components :

 

Subgroup-- : Markets------------------------------------ : Weight : related etfs

==========

Energy----- : Crude Oil, Heating Oil, Natural Gas - : 17.6% : OILB, USO, (OIH, XLE)

Grains------ : Wheat, Corn, Soybeans--------------- : 17.6% : DBA

Industrials - : Copper, Cotton--------------------------- : 11.8% : CU

Meats------- : Live Cattle, Lean Hogs ----------------- : 11.8% : ???

Softs-------- : Coffee, Cocoa, Sugar, Orange Juice- : 23.5% : ???

Prec.Metals : Gold, Silver, Platinum------------------- : 17.6% : GLD, SLV

==========

 

/ source: http://www.mrci.com/client/crb.php

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GOLD -to- CPI relationship - a good forecasting Tool maybe? ... but within a Big Range :

 

Calculating a Sept-10 base for Gold prices

 

Date-Year : $Gold / CPI-idx / Base : Index : Gold/i

24. Sep.10 : $1298 : 218.20 / 218.20 : 1.000 = $1298

05. Sep.11 : $1924 : 226.70 / 218.20 : 1.039 = $1852

XX. May 12 : $1527 : 228.65 / 218.20 : 1.048 = $1457

XX. Oct. 12 : $1798 : 231.62 / 218.20 : 1.061 = $1694

27. Jun. 13 : $1201 : 231.83 / 218.20 : 1.062 = $1131

 

mg1g.jpg

(Longer Term Chart):

 

Date-Year : $Gold/ CPI-idx : Ratio: x 215 :

====

21. Jan. '80 : $0873 / 78.79 = 11.08 = 2383. :

02. Apr. '01 : $0256 / 174.15 = 1.47 = 315.6 :

24. Sept.10 : $1298 / 218.20 = 5.95 = 1279 :

05. Sept.11 : $1924 / 226.70 = 8.49 = 1825 : Record high

12. Sept.11 : $1834 / 226.70 = 8.09 = 1739 :

XX. ????.11 : $1XXX / 2XX.xx = 6.20 = 1333. :

27. Jun. '13 : $1201 / 231.83 = 5.18 = 1113. : Thu. close

28. Jun. '13 : $1182 / 231.83 = 5.10 = 1098. : Low for Friday

28. Jun. '13 : $1232 / 231.83 = 5.31 = 1142. : Fri. close

Date- Year : $Gold / CPI-idx : Ratio : x 215 :

 

i960.jpg

 

===

Where's the Ratio going ? / see : Gold RATIO thread

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DEMOGRAPHICS suggest Deflationary forces will persist in the long run

 

This guy puts a lot of effort in: http://solarcycles.n...-and-deflation/

 

(1)

Countries with ageing populations have generally experienced low inflation in recent years, whereas younger countries have experienced higher inflation, due to the resultant spending boom:

23jun11.jpg?w=547 : Source: Andrew Cates

 

(2)

The alternative 15-40 ratio measure paints a similar picture of price deflation ahead for five of the most important economies:

23jun14.png?w=547&h=336

 

This explains why ZIRP and QE have failed to bring about inflation in Japan and now the USA. These countries want to inflate, but the demographic trends mean the public just won’t spend sufficiently in the economy for it to happen. For the majority of the major nations, this is a problem going forward, as the demographic trends persist and worsen. For the global economy, this is a problem, because the combined GDP of Brazil and India and other smaller positive-demographic countries is much smaller than the combined influence of the USA, China and Europe.

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SHORTAGES can drive inflation, even if the Demographics are "wrong"

 

Watch the CRB index in the days and weeks to come.

 

If the deflationary forces are winning or losing, the next move may be signaled by how the CRB breaks from the triangle

 

I haven't look at Ags for a while...

 

Corn is on the bottom of a channel ... update

 

iq8.gif

 

DBA-Ags fund is also "rested" ... update

 

3kf.gif

 

In the above chart, DBA has no clear "pivot point" where it is now, but it may still rally.

 

A longer term chart shows it very near to support ... update : DBA tracks CRB

 

vvp.gif

 

This etf is subject to sudden violent upswings, some have been driven by Corn price moves.

 

It could be a potential inflation hedge (and looks "cheap" now), but maybe its history is too short.

 

CRB - the Commodity Research Bureau index of commodities ... update

 

yee.gif

 

CRB ( is the black line, above) may be ready to break out of its long triangular formation.

 

It could go either way, but generally this is a Bullish pattern, with the move generally coming to the UP side.

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Central Banksters Make the Best Terrorists - by Richard (Rick) Mills , Jul 19 2013 11:24AM

 

clip_image004.jpg

 

Inflation and jobs weren’t THE real reason Bernanke backtracked. His talk of tapering literally started a global bond market rout. The Federal Reserve has over $3.5 trillion worth of securities on its balance sheet - of which $1.9 trillion are U.S. Treasuries. If the Fed had started down the path of interest rate normalizationbyslowing its purchases and eventually unwinding its balance sheet interest rates would climb back to at least the 4% they were before the Great Recession in 2008 and maybe as high as the 40 year average of 7%.

clip_image006.jpg

10 year treasury yields

This from Charles Hugh Smith over at oftwominds.com…

“The wheels fall off the entire financialized debtocracy wagon once yields rise. There's nothing mysterious about this:

1. As interest rates/yields rise, all the existing bonds paying next to nothing plummet in market value

2. As mortgage rates rise, there's nobody left who can afford Housing Bubble 2.0 prices, so home prices fall off a cliff

3. Once you can get 5+% yield on cash again, few people are willing to risk capital in the equities markets in the hopes that they can earn more than 5% yield before the next crash wipes out 40% of their equity

4. As asset classes decline, lenders are wary of loaning money against these assets; if the collateral for the loan (real estate, bonds, stocks, etc.) are in a waterfall decline, no sane lender will risk capital on a bet that the collateral will be sufficient to cover losses should the borrower default.

The consequences of interest rate normalization for stocks will prove very painful. According to the hmcapitalmanagement.coms chart below the average correction is 20% and happens in an incredibly short span of time – 10 months. Devastating to the top few percent of Americans who own 80% of the wealth in the stock market.

clip_image008.jpg

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Somewhat surprisingly, CPI Inflation is pushing higher... Now at 1.75% YoY

 

==== : = Jan = : = Feb = : = Mar = : = Apr = : = May = : = Jun = : = July = : = Aug = : = Sep = : = Oct = : = Nov = : = Dec = : = Ave = : toDc Ave

2012 226.665 227.663 229.392 230.085 229.815 229.478 229.104 230.379 231.407 231.317 230.221 229.601 229.594 : 1.7 2.1

2013 230.280 232.166 232.773 232.531 232.945 233.505

====

Yr.'13: +1.59% : +1.97% : +1.47% : +1.06% : +1.36% : +1.75% : year-on-year

Mm'13 +3.58% : +9.83% : +3.13% : - 1.25% : +2.14% : +2.88% : month-to-month x12

 

 

It seems to be mainly due to Oil prices:

 

Surging Gasoline Prices Push CPI Inflation Higher, But Weak Core ...

Forbes-Jul 17, 2013

While the Fed's preferred measure of inflation is the PCE (personal consumption expenditures), it pays close attention to core CPI, which strips out ...

. . .

With the market’s attention focused on Fed Chairman Ben Bernanke and the possible tapering of quantitative easing this year, Tuesday’s inflation numbers must have been slightly disconcerting for investors. The Bureau of Labor Statistics announced the consumer price index (CPI) jumped 0.5% in June, accelerating since May and breaking a dangerous deflationary trend that had been building up. Most of the increase, though, came from a surge in gasoline prices, which directly affects consumers across the nation. The more closely watched core CPI reading, which excludes food and energy, gained a more tepid 0.2%.

 

The number remains ambiguous, as low inflation is dangerous and would suggest the Fed could act to avoid deflation, while at the same time rising inflation gives Chairman Bernanke more arguments to begin tapering this year.

 

Gasoline prices were responsible for two-thirds of the 0.5% increase in CPI in June, the BLS said, as the gasoline index surged 6.3% on the back of higher crude oil prices.

  • At last, inflation in Japan is speeding up
     
    CNBC.com-Jul 25, 2013
    "But if you exclude oil and food prices, the CPI was still negative – so the takeaway here is that underlying inflation is still not picking up on a ...

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I don't think that Inflation will shoot up from here, but some others do: The Great Reset thread

 

“Run for the Hills Now, I’m Doing It.”

 

Jim Rogers, CNBC.com (07/20/13)

==============================

this respect, one of the necessary conditions already appears on its way to being fulfilled. Threshold Hyperinflation is already with us – though Bogus Official figures seek to hide it.

 

ad69.gif : source

 

In the U.S. for example, Real CPI bumped up from 8.99% to 9.38% from May to June 2013 (Shadowstats.com). Other Major Nations’ figures are notoriously unreliable also (e.g. China). (An Argentinean economist personally confided to us that Real Inflation in Argentina is 50% per year, even though the government will not acknowledge it.)

 

===

/more: http://beforeitsnews...er-2540692.html

 

If Oil keeps rising (which I doubt now), and that leads into Obamacare in Jan. 2014, then we might see it.

Sean David Morton is talking about a Star of David, astrological "War formation", and he believes a war may start within two months.

 

John Williams wrote:

No. 543: June CPI, Industrial Production, Real Retail Sales and Earnings

July 16th, 2013

 

• Slowing Growth with Rising Inflation

• Real Retail Sales and Real Earnings Contracted in June

• Annualized Quarterly Production Growth Slowed to 0.59% from 4.23%

• June Year-to-Year Inflation: 1.8% (CPI-U), 1.8% (CPI-W), 9.4% (ShadowStats)

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