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Bubble ben bernanke says "LOW RATES "WON'T" STOKE INFLATION"
- Thread starter S2007S
- Start date
Bloomberg
Cotton Record Price Lifts Costs for Gap Denim Supplier, Fun-Tees
November 04, 2010, 12:54 AM EDT
More From Businessweek
* Cotton Climbs Near to Record in U.S., China on Supply Concern
* Cotton Extends Rally to Record as China Faces Supply Shortage
* Record Cotton Prices âEndangerâ China Textile Makers, CFLP Says
* Cotton May Extend Rally 17% Before Falling: Technical Analysis
* Cotton Jumps by Daily Limit in New York; China Futures at Record
By Leslie Patton
Nov. 4 (Bloomberg) -- A doubling of cotton prices since Feb. 1 may mean more expensive clothes, sheets and towels as textile mills including Indiaâs Arvind Ltd. and retailers such as Next Plc pass along higher costs to their customers.
Next, a Leicester, England-based clothing retailer, said yesterday it will raise prices as much as 8 percent in the first quarter because of the jump in costs. Ahmedabad, Gujarat-based Arvind, the worldâs largest denim maker and a supplier to jeans maker Levi Strauss & Co. and Gap Inc., have raised prices by as much as 15 percent, Citigroup Inc. economists Rohini Malkani and Anushka Shah wrote in an Oct. 11 report.
âWe will have to wait and see if further price increases to reflect future cotton prices ultimately cause demand destruction,â Delta Apparel Inc. Chief Executive Officer Robert Humphreys told analysts on an earnings conference call on Oct. 28. The Greenville, South Carolina-based owner of Fun-Tees Inc. and sportswear maker MJ Soffe Co., plans to charge more for catalog and private-label clothing, he said.
Cotton futures surged to $1.392 a pound yesterday in New York, the highest price in 140 years of trading, on signs that dwindling global supplies wonât meet mounting demand from China, the biggest user. Cottonâs 79 percent gain this year was the biggest on the Standard & Poorâs GSCI Index of 24 commodities.
âRetailers are going to be forced to up their prices,â said Andy Ryan, a senior-risk management consultant at FCStone Fibers & Textiles in Nashville, Tennessee. Consumers probably wonât see the increases until after the holidays, he said.
Consumers may pay as much as 2 percent more for cotton apparel including denim in 2011, said Kim Kitchings, a senior director at Cotton Inc., a research and promotional organization for the industry in New York.
Low-End Buyers
Buyers of low-end products, where profit margins for retailers are thinnest, will be the hardest hit, said Armelle Gruere, a statistician at the International Cotton Advisory Committee in Washington.
The increased cost of cotton may boost the retail price of an average pair of jeans by about 40 cents, Gruere said. âFor $10 or $15 jeans, youâll notice the difference,â she said.
Cotton Record Price Lifts Costs for Gap Denim Supplier, Fun-Tees
November 04, 2010, 12:54 AM EDT
More From Businessweek
* Cotton Climbs Near to Record in U.S., China on Supply Concern
* Cotton Extends Rally to Record as China Faces Supply Shortage
* Record Cotton Prices âEndangerâ China Textile Makers, CFLP Says
* Cotton May Extend Rally 17% Before Falling: Technical Analysis
* Cotton Jumps by Daily Limit in New York; China Futures at Record
By Leslie Patton
Nov. 4 (Bloomberg) -- A doubling of cotton prices since Feb. 1 may mean more expensive clothes, sheets and towels as textile mills including Indiaâs Arvind Ltd. and retailers such as Next Plc pass along higher costs to their customers.
Next, a Leicester, England-based clothing retailer, said yesterday it will raise prices as much as 8 percent in the first quarter because of the jump in costs. Ahmedabad, Gujarat-based Arvind, the worldâs largest denim maker and a supplier to jeans maker Levi Strauss & Co. and Gap Inc., have raised prices by as much as 15 percent, Citigroup Inc. economists Rohini Malkani and Anushka Shah wrote in an Oct. 11 report.
âWe will have to wait and see if further price increases to reflect future cotton prices ultimately cause demand destruction,â Delta Apparel Inc. Chief Executive Officer Robert Humphreys told analysts on an earnings conference call on Oct. 28. The Greenville, South Carolina-based owner of Fun-Tees Inc. and sportswear maker MJ Soffe Co., plans to charge more for catalog and private-label clothing, he said.
Cotton futures surged to $1.392 a pound yesterday in New York, the highest price in 140 years of trading, on signs that dwindling global supplies wonât meet mounting demand from China, the biggest user. Cottonâs 79 percent gain this year was the biggest on the Standard & Poorâs GSCI Index of 24 commodities.
âRetailers are going to be forced to up their prices,â said Andy Ryan, a senior-risk management consultant at FCStone Fibers & Textiles in Nashville, Tennessee. Consumers probably wonât see the increases until after the holidays, he said.
Consumers may pay as much as 2 percent more for cotton apparel including denim in 2011, said Kim Kitchings, a senior director at Cotton Inc., a research and promotional organization for the industry in New York.
Low-End Buyers
Buyers of low-end products, where profit margins for retailers are thinnest, will be the hardest hit, said Armelle Gruere, a statistician at the International Cotton Advisory Committee in Washington.
The increased cost of cotton may boost the retail price of an average pair of jeans by about 40 cents, Gruere said. âFor $10 or $15 jeans, youâll notice the difference,â she said.
As long as everybody hates the FED, that means they are finally doing something right. As strange as it sounds, I still trust the FED more than the politicians.
You got Big Business "lobbying" politicians every minute of the day. That is the most blatant corruption known to society. Somehow like Gekko says; Not only is Greed Good, it's legal.
If you want to see hyperinflation, close the FED and give the printing press back to the politicians. What the FED is doing right now is just messing with the markets and moving 00's to the left and right of the computer screen.
If you guys want to point a finger to your problem, point to Big Business (they are the ones that offshore all your jobs), Politicians (they are the ones that introduce all these laws, taxes and stupidity onto your lives), and yourselves (you caused all the bubble manias and panics).
You got Big Business "lobbying" politicians every minute of the day. That is the most blatant corruption known to society. Somehow like Gekko says; Not only is Greed Good, it's legal.
If you want to see hyperinflation, close the FED and give the printing press back to the politicians. What the FED is doing right now is just messing with the markets and moving 00's to the left and right of the computer screen.
If you guys want to point a finger to your problem, point to Big Business (they are the ones that offshore all your jobs), Politicians (they are the ones that introduce all these laws, taxes and stupidity onto your lives), and yourselves (you caused all the bubble manias and panics).
Dollar at Risk of Crashing, Triggering Inflation: Strategist
Published: Thursday, 4 Nov 2010 | 11:54 AM ET
Text Size
By: Jeff Cox
CNBC.com Staff Writer
Federal Reserve policies have put the US dollar the risk of crashing, which will hammer consumers through higher prices, strategist Axel Merk told CNBC.
Investors should brace for a much weaker dollar [.DXY 75.97 0.09 (+0.12%) ] by diversifying out of the greenback and into currencies of other countries, said Merk, chairman and chief investment officer of Merk Investments, of Portland, Maine.
Merk spoke the day after the Fed said it will be embarking on a program to buy $600 billion in Treasurys in an effort to pump up the economy by increasing liquidity. Critics say the program, also known as quantitative easing, will further devalue the dollar and ultimately create inflation.
"It's with the best of intentions but I think it's a very, very wrong policy," Merk said in an interview.
Consumers should prepare for another turn of events like the spring of 2008, when oil prices [US@CL.1 87.14 0.65 (+0.75%) ] soared to $147 a barrel and gas at the pump was more than $4 a gallon, he said.
"One of the key things here is a weaker dollar has traditionally not been inflationary because Asian exporters like to absorb the higher cost of doing business," Merk said. "There comes a breaking point when Asian exporters can no longer absorb that higher cost of doing business. They'll raise prices and guess what? They will stick.
"So we will have a cost-push inflation. We're going to get inflation but not where Bernanke wants to have it. We're not going to get wages to go up. We'll get the price at the gas pump to go up instead."
The current climate of low inflation has spurred comparisons to Japan's "lost decade" where deflation prevailed.
But Merk said the difference in monetary policy between the two countries will guarantee different outcomes.
"We won't be like Japan because we finance our deficits externally. So our fate will be different," he said. "We'll have a dollar that may crash in that process. The issue here is that (Fed Chairman Ben) Bernanke wants to have a weaker dollar. This is the first Fed chairman who is seeking to have a dialogue about the dollar."
Merk said forex investors still can navigate a difficult environment but need to be diversified and should focus on countries that will be looking to clamp down on inflation by boosting rates and backing their currencies.
"There's no such thing anymore as a safe asset. Cash is no longer safe," he said. "Do what central banks do, they diversify to baskets of currencies. That's what we try to do. It's a pity for any savers out there, but we'll survive. We'll get through this."
Published: Thursday, 4 Nov 2010 | 11:54 AM ET
Text Size
By: Jeff Cox
CNBC.com Staff Writer
Federal Reserve policies have put the US dollar the risk of crashing, which will hammer consumers through higher prices, strategist Axel Merk told CNBC.
Investors should brace for a much weaker dollar [.DXY 75.97 0.09 (+0.12%) ] by diversifying out of the greenback and into currencies of other countries, said Merk, chairman and chief investment officer of Merk Investments, of Portland, Maine.
Merk spoke the day after the Fed said it will be embarking on a program to buy $600 billion in Treasurys in an effort to pump up the economy by increasing liquidity. Critics say the program, also known as quantitative easing, will further devalue the dollar and ultimately create inflation.
"It's with the best of intentions but I think it's a very, very wrong policy," Merk said in an interview.
Consumers should prepare for another turn of events like the spring of 2008, when oil prices [US@CL.1 87.14 0.65 (+0.75%) ] soared to $147 a barrel and gas at the pump was more than $4 a gallon, he said.
"One of the key things here is a weaker dollar has traditionally not been inflationary because Asian exporters like to absorb the higher cost of doing business," Merk said. "There comes a breaking point when Asian exporters can no longer absorb that higher cost of doing business. They'll raise prices and guess what? They will stick.
"So we will have a cost-push inflation. We're going to get inflation but not where Bernanke wants to have it. We're not going to get wages to go up. We'll get the price at the gas pump to go up instead."
The current climate of low inflation has spurred comparisons to Japan's "lost decade" where deflation prevailed.
But Merk said the difference in monetary policy between the two countries will guarantee different outcomes.
"We won't be like Japan because we finance our deficits externally. So our fate will be different," he said. "We'll have a dollar that may crash in that process. The issue here is that (Fed Chairman Ben) Bernanke wants to have a weaker dollar. This is the first Fed chairman who is seeking to have a dialogue about the dollar."
Merk said forex investors still can navigate a difficult environment but need to be diversified and should focus on countries that will be looking to clamp down on inflation by boosting rates and backing their currencies.
"There's no such thing anymore as a safe asset. Cash is no longer safe," he said. "Do what central banks do, they diversify to baskets of currencies. That's what we try to do. It's a pity for any savers out there, but we'll survive. We'll get through this."
Quote from intradaybill:
Nobody cares about your economic policy aspirations.
As I said, you are out of your mind. You are at a state of severe psychosis.
Projection: a defense mechanism that involves taking our own unacceptable qualities or feelings and ascribing them to other people.
As for the rest of your rambling, it was basically a cut-and-paste from someone else that I refuted. If you had the reading comprehension of a 4th grader, maybe you'd have picked up on that already.
Quote from sumfuka:
As long as everybody hates the FED, that means they are finally doing something right. As strange as it sounds, I still trust the FED more than the politicians.
You got Big Business "lobbying" politicians every minute of the day. That is the most blatant corruption known to society. Somehow like Gekko says; Not only is Greed Good, it's legal.
You've got to be kidding me. The Fed bends over backwards to help the banks and makes you pay for it. If the Fed is not in the back pocket of the financial industry, it has a funny way of showing it. The Fed does more damage to your average citizen than any politician can.
Quote from sprstpd:
You've got to be kidding me. The Fed bends over backwards to help the banks and makes you pay for it. If the Fed is not in the back pocket of the financial industry, it has a funny way of showing it. The Fed does more damage to your average citizen than any politician can.
So the new Health Care bill (soon to be law), would you blame the FED or Politicians? Or the idea that the gov should own a failed company (GM)? Okay, this one is going to take the cake; When the nation goes to war with a foreign nation in the middle of the desert?
I'm not saying the FED is a wonderful institution or whatever, but you got to see who is really CAUSING inflation.
Quote from Kassz007:
Really? Did the Fed put the USA trillions of dollars into debt?
They certainly contributed, with their insane policy of keeping interest rates extremely low from 2001 all the way up to 2004, 3 whole years after a very mild recession had ended, and by not doing anything at all to restrict untrammeled insane lending practises in the housing and sub-prime sector. Totally ignoring and being unaware of the fact that half the domestic banking system was in danger of going insolvent was also a blunder of epic proportions. The 2nd biggest property bubble in human history took place caused in large part by Fed policies, without them even realising it, and they did nothing to stop it or mitigate it once it started crashing.
So basically yes, the Fed directly caused almost the entire increase in national debt since 2007, mostly by public bank bailouts.