Thursday, June 17, 2010


(click on image to enlarge)

Today,the Bureau of Labor Statistics (BLS)published the Consumer Price Index (CPI), which tracks retail prices. As with the PPI, the CPI uses a base period 1982 - 84 = 100.

What is interesting is the fact that the CPI rose in May 2010. The "experts" all talk about large inventories of cheese holding prices down. According to my calculations, the inventories are exaggerated.

Be that as it may be, processors make cheese when milk price at the farm is low. Inventories are reduced when consumers are given deals.

The market system is obviously failing, which is not to say things are not working out according to a basic rule of capitalism, buy low and sell high. How sweet it is.

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