the staff of the Ridgewood blog
Ridgewood NJ, since the November election the CRB commodities index has been surging. This index of nearly 20 major commodities – from silver, to copper, to corn, to coal – hit it’s three-year high on Monday at 205. That’s a 35% commodity price spike from election day when it stood at 154. Energy prices have led the ascent. The index had been rising throughout 2020 from its collapse in March and April when the virus hit.
While the Ridgewood agrees that the FED should be watching the CRB index as it is the best lead indicator of inflation. The original “Volcker rule” used by Fed chief Paul Volcker in the early 1980s to squash the double-digit inflation of the Carter years. By driving down commodity prices, he drove down the inflation rate from 13% to 3%.
Throughout most of the Trump years, many believed the Fed was too tight as the CRB index remained way below its five-year average. When Trump entered office the CRB was at 190; when he left it was 155. That’s called deflation.
Yesterday Fed Chair Powell told Congress he’s going full speed ahead on near-zero interest rates on top of the $9 trillion of m2 money creation in 2020. In a throw back to the 1970’s Powell says he is not worried about a rise in consumer prices.
If you think gas prices, which have risen 35 cents in the last couple of months, are high now , just wait much higher commodity prices are just around the corner.
This was the inevitable result of Biden winning and the US no longer pursuing a policy of energy independence. The lefties have this ridiculous belief that we are somehow saving the planet but the reality is we are now importing energy which affect the price of just about everything.
Biden Elected.
Gas Prices Go up.
Stock Market tanks.
What’s next?
An Iran Hostage Crisis?