Savers and merchants worldwide are being forced to price scarce resources
in ever-depreciating money...
BLAME speculators, poor weather, global demand, or the Federal Reserve
as you choose. Either way, sugar's
up, wheat's
up, and cotton's new record highs are starting to hurt Chinese textile makers.
Hence this bale in the wind. Clothing and footwear prices to UK consumers
rose year-on-year in September for the
first time since March 1992, hitting a two-year high in absolute terms.
Yet only now do central bankers fear deflation ahead. C'mon...where do they
find these people?
"The longevity of what appears to be a speculative bubble in cotton prices," will
determine 2011 profits at UK
clothes retailer Next, it warned this week, adding that rising costs will
force it to raise shop prices.
Over in China - which uses some 40% of the world's raw cotton output...and accounts
for one-third of global textile exports - textile manufacturers face
a "shortage
of raw material", said industry group the China Federation of Logistics
and Purchasing meantime, with last month's record-high prices "endangering" their
survival.
For our money here at BullionVault,
we'll blame loose monetary policy...and not just from force of habit, either.
The Pound Sterling, like the US Dollar, looks further than ever from paying
a positive real rate of interest - leaving both savers and merchants to price
scarce resources in ever-depreciating, ever-more generously supplied currencies.
Short of an about-turn in monetary policy, the near-halving of UK clothing
and footwear prices since 1989 appears finished.
Formerly City correspondent for The Daily Reckoning in London and head of
editorial at the UK's leading financial advisory for private investors, Adrian
Ash is the head of research at BullionVault,
where you can buy gold today vaulted
in Zurich on $3 spreads and 0.8% dealing fees.
About BullionVault
BullionVault is the secure, low-cost
gold and silver exchange for private investors. It enables you to buy and sell
professional-grade bullion at live prices online, storing your physical property
in market-accredited, non-bank vaults in London, New York and Zurich.
By February 2011, less than six years after launch, more than 21,000 people
from 97 countries used BullionVault,
owning well over 21 tonnes of physical gold (US$940m) and 140 tonnes of physical
silver (US$129m) as their outright property. There is no minimum investment
and users can deal as little as one gram at a time. Each user's unique holding
is proven, each day, by the public reconciliation of client property with formal
bullion-market bar lists.
BullionVault is a full member of
professional trade body the London Bullion Market Association (LBMA). Its innovative
online platform was recognized in 2009 by the UK's prestigious Queen's Awards
for Enterprise. In June 2010, the gold industry's key market-development body
the World Gold Council (www.gold.org) joined
with the internet and technology fund Augmentum Capital, which is backed by
the London listed Rothschild Investment Trust (RIT Capital Partners), in making
an $18.8 million (£12.5m) investment in the business.
Please Note: This article is to inform your thinking, not lead it.
Only you can decide the best place for your money, and any decision you make
will put your money at risk. Information or data included here may have already
been overtaken by events - and must be verified elsewhere - should you choose
to act on it.
the
first time since March 1992, hitting a two-year high in absolute terms.
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