Thursday, November 11, 2010

National Inflation Association Estimates. Highlights. Read if you believe inflation is 4%

  • In February of 1974, wheat reached a high of $6.45 per
    bushel, which based on the CPI is $29.85 per bushel in
    today’s dollars. Based on the way NIA calculates real price
    inflation, by eliminating geometric weighting and hedonics,
    wheat’s real inflation adjusted high in February of 1974 was
    $97.37 per bushel. NIA expects wheat to reach new inflation
    adjusted highs this decade and if so, the average price for
    a 24 oz loaf of the cheapest store brand of wheat bread in
    your grocery store will likely rise to around $23.05.
  • The median U.S. home is currently worth $171,700 or
    6,550 ounces of silver. After the inflationary crisis of the
    1970s, the median U.S. home declined to below 1,000
    ounces of silver. NIA believes that because this decade’s
    Real Estate bubble was so large, Real Estate prices will
    likely overcorrect to the downside and the median U.S.
    home will be worth only 500 ounces of silver at some point
    this decade. Therefore, if you buy just $13,000 worth of
    physical silver today, NIA believes you will be able to pay
    cash (without any mortgage) for an average American home
    within the next 5 to 10 years.
  • In November of 1974, sugar reached a high of $0.65 per
    pound, which based on the CPI is
    $2.757 per pound in today’s
    dollars. Based on the way
    NIA calculates real price
    inflation, by eliminating
    geometric weighting
    and hedonics, sugar’s real
    inflation adjusted high in
    November of 1974 was
    $8.99 per pound. NIA
    expects sugar to reach new
    inflation adjusted highs this
    decade and if so, the average
    price for a 32 oz package
    of Domino Granulated Sugar in your
    grocery store will likely rise to around $62.21.
  • In November of 1977, orange
    juice reached a high of $2.20 per
    pound, which based on the CPI is
    $7.76 per pound in today’s dollars.
    Based on the way NIA calculates
    real price inflation, by eliminating
    geometric weighting and hedonics,
    orange juice’s real inflation
    adjusted high in November of 1977
    was $25.33 per pound. NIA expects
    orange juice to reach new inflation
    adjusted highs this decade and if so,
    the average price for a 64 fl oz container
    of Minute Maid 100% Pure Squeezed Orange Juice in
    your grocery store will likely rise to around $45.71.

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