April 5, 2010
Pretend it’s 1933, as so many in the deflation camp think it is or soon will be (at least from the price-of-everything standpoint). If last Wednesday you reached for a copy of that day’s Financial Times, would you have expected to see the following headline — “Steel prices set to soar: Everyday goods will cost more” — in large print above the fold?
I don’t think so.
The newspaper went on to say: “Global steel prices are set to rise by up to a third, pushing up the cost of everyday goods from cars to domestic appliances, after miners and steelmakers yesterday agreed to a ground-breaking change in the iron ore price system.”
All along, as I’ve talked about money printing, I have said it was not possible to explain in advance which goods would climb in price (or when). I just knew that as the new money was put into circulation, prices would ultimately rise. Now they have, to some degree, for various items. Steel is a great example along with other base metals, oil, health care, insurance and taxes.
This article was posted: Monday, April 5, 2010 at 9:15 am