No Inflation? Housing, Food, Energy, Gold and Silver Skyrocket in Last 6 Months

Well, The Federal Reserve has been trying to combat deflation (declining prices) by generating inflation. The Fed also hopes to reduce unemployment and increase economic output (GDP). QE3, a third round of quantitative easing, was announced on September 13, 2012.

So, what has happened to prices in the last 6 months?

Energy prices have risen around 20% (second column from the right). Gold is up 7.06% while silver is up 13.87%. Corn and wheat are both up about 6% over the last 6 months. Coffee, on the other hand, has fallen 13.22% (maybe Starbucks are use more expensive beans in their coffee since the prices have fallen!)

Live cattle prices have risen sharply, particularly since October 1st.

Milk, an important source of nutrition for children, has skyrocketed over the past six months.

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And, of course, house prices rose during the six months prior to the last Case-Shiller quarterly print.

30 year fixed rate mortgage rates declined over the past six months, helping fuel a rise in house prices.

Core PCE YoY is expected to print at only 1.70%.

So, prices on a number of commodities have risen sharply over the past 6 months while core PCE has dropped.

Huh. It sure FEELS like prices are rising which is a shame given that wages and salaries are falling.

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