PRICES UP - PURCHASING POWER DOWN

Here's the deal; assets - dollars, homes, cars and all the other stuff we own, are losing value while commodities, all the things that we need to live, food and fuel most prominent among them are going up.

And the other thing that continues to rise; unemployment.

Put all this together and we have the perfect storm. Less money and much lower net worth combined with massive increases in the prices of the things we absolutely must have to survive will end in riots in the streets. That or a strongman that will lead us into slavery; or perhaps both.

And this is just the beginning.

Buckle up.

"Investors looking for safer places to stow their assets pushed gold to a record price above $1,400 an ounce Monday as they become more worried about the global economy.

A combination of issues have created fresh worry among investors: Ireland's debt difficulties and two key global summits where leaders of major industrial and developing nations are discussing currencies, free trade and ways to help the world economy.

Also in the back of investors' minds is the prospect of inflation stemming the Federal Reserve's multi-billion bond-buying program.

"People are really concerned again and so I think we're seeing safe-haven buying," IG Markets Inc. CEO Dan Cook said."
Yahoo

"Clear Capital released their monthly Home Data Index Report today and it showed continued deterioration in national home prices. Prices are now off -6.8% from their August peak. It looks to me like the housing double dip is here and Ben Bernanke rolled out QE2 just in time to prepare for massive MBS purchases in 2011 when the banks hit another rough patch."
Business Insider

"Oil prices reached two-year high points on Monday before profit-taking pushed them down, while attention was on Nigeria after an oil rig was attacked off the coast of the energy exporting nation.

New York's main contract, light sweet crude for delivery in December, struck 87.49 dollars a barrel -- the highest point since late 2008."
MSN News

"We are officially in an inflation trade melt-up.

Everything that is an inflation hedge has exploded since late August. Gold is up 15%. Silver is up 48% (courtesy of the manipulators finally getting taken to court). Agricultural commodities are up 25%. Oil is up 20%.

Against this backdrop, stocks’ 17% rally becomes slightly less insane. That’s right, stocks are up 17% since late August. What happened in late August?

The Fed announced QE lite and promised QE 2 was coming. Almost to the day of this announcement, the US Dollar rolled over and dropped some 8% (it’s down nearly 15% since June)."
Seeking Alpha

An inflationary tide is beginning to ripple through America's supermarkets and restaurants, threatening to end the tamest year of food pricing in nearly two decades.

Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months. And food makers and retailers including McDonald's Corp., Kellogg Co. and Kroger Co. have begun to signal that they'll try to make consumers shoulder more of the higher costs for ingredients.

For food executives, how quickly to pass along higher costs presents difficult choices. Missteps could be costly when the economy remains weak. Many Americans, nervous about high unemployment, have pledged allegiance to their pennies and are willing to trade down on brands, switch supermarkets, opt for Burger King over Applebee's, or stop dining out altogether to save money.
Wall Street Journal