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  • Bifurcated inflation [Edit or Delete]0 comments
    Aug 17, 2011 10:04 AM
    I'm really getting tired of these repetitive 'America is Rome' or 'America is Burning and Nero is fiddling' analogues on the blogs. The only thing burning up is the trading accounts of short sellers. You can lose your shirt waiting for America's demise while people like me and Wall St. keep making $ hand over fist buying the dips. Zer0h3dge readers still waiting for that proverbial shoe to drop will keep being disappointed.

    Bifurcated inflation

    It's obvious we have bifurcated inflation with above average inflation for necessary goods and services such as food and heating energy and benign inflation for non-essentials like clothing and electronics. Policy makers only look at core CPI when evaluating inflation so expect more surging living expenses down the road. This is how the creators/globalists FORCE Americans to spend- by creating nosebleed inflation for essential, inelastic goods like gas , food and energy while at the same time not calling it inflation. I'll admit it's a crappy system, but there's nothing we can do about it except hedge by buying etfs for inflationary items such as UGA, GLD and DBA.

    Yea it's true you have more choices than ever when it comes to buying electronics and streaming online movies, but Bernanke doesn't not want you to have too much money left in your wallet when your done with those purchases , so he's gonna make you spend anything you have left to fill up the tank. And since you can't walk or bike to work (especially since employers will look for any excuse to fire workers, especially for tardiness) you have no choice but to grudgingly max out the credit card to fill up the tank. And you can't eat an ipad so you max the credit card on food - the prices of which keeps going up every month while the paycheck stays flat year after year.  

    The consequences of this are multi-fold: falling consumer confidence, a persistent pessimism in the American psyche,  decline in the personal savings rate (which I predict will go negative soon), decline in discretionary income (leading to falling personal savings rate), and falling approval rating for all branches of the government.

    Above average inflation:

    Food ..hedge: DBA
    Gas prices hedge: UGA
    Commodities hedge: SLV,GLD
    Heating energy
    Child care
    Healthcare (no obvious hedges)
    Education (no obvious hedges)

    Below or average:

    Digital Media
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