Wednesday, October 19, 2011

Dear Paul Krugman: "Food at Home Price Index has increased 6.3% and the Dairy Index is up 10.2% in the Past Year"

The good Professor swore up and down that QE2 wasn't supplying the funds to fuel commodity inflation, going so far as donning a climatologist hat and blaming the 2010 Russian heat wave on global warming.

The folks at the National Oceanic and Atmospheric Administration had a different opinion:

Natural Variability Main Culprit of Deadly Russian Heat Wave That Killed Thousands

but Krugman, rather than acknowledging his ideology had gotten the better of his common sense, moved on to denying there was any inflation, then using 'core' inflation rather than headline (food, fuel, etc.) then when headline bled into core he started using the Atlanta Fed's 'Sticky Price CPI" i.e. prices that don't change.

I've no idea what he's saying now.
From Big Picture Agriculture
Today, the report is out from the BLS with the Consumer Price Index for September, 2011. If one wanted to generalize, energy inflation over the past twelve months is very alarming, food inflation over the past twelve months is becoming quite alarming, and for the most part essential categories are rising while nonessentials are not.——K.M.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.9 percent before seasonal adjustment. ... Increases in energy and food indexes were the main cause of the seasonally adjusted all items increase. ... The index for all items less food and energy increased 0.1 percent in September, its smallest increase since March. ... indexes for medical care, airline fares, and tobacco all increased. ... The 12-month change for all items less food and energy remained at 2.0 percent for the second straight month. The energy index has risen 19.3 percent over the last year, while the food index has increased 4.7 percent. ...
Food Category:
... The dairy and related products index rose the most, increasing 1.2 percent, followed by 0.9 percent increases in both the cereals and bakery products index and the fruits and vegetables index.