Since Jon Nadler continues to point out how gold will not go up as long as this threat of deflation is upon us (if I understand him correctly), I thought I would send him this email this morning about deflation in my neck of the woods:
Jon,
You will be happy to know that here in the rural Midwest, deflation has met its match.
My health insurance premiums are rising unabated,
Home, auto, umbrella, and casualty insurance is still headed higher,
Diesel fuel is up 23% from February lows (gasoline is up also, but there are so many factors there),
LP Gas for heating is still selling at a whopping 90 cent premium at retail over NYMEX near contract (30 – 40 cent would be more normal),
Grocery bills continue to climb, having never fallen,
My wife still can’t find anyone to paint and wallpaper for her, at any price.
My wife and 3 teenage daughters report that ladies bra’s, panties and assorted feminine products are continuing their (upward) price spiral (it’s amazing what they charge for so little material..),
(we won’t talk about the price of ammunition for us target shooters),
The local plumbers cost more every time they are here, and the low price of copper did nothing to bring down the price of a new water heater or pressure tank.
At the risk of tiring myself or boring you – I shall stop here.
Oh, there is one major item that IS succumbing to deflation – my income!
Regards,
Roger.
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Note: I did receive a very prompt and courteous reply from Jon. In it, he emphasized that he does not contest the stagflationary feel of what we are going through and that it is indeed the THREAT of deflation that the Fed has it’s eyes on.
