Abelson on Heart Attack Lunches

As if by magic, Alan Abelson of Barron's mentions inflation, just before you read our post on lunch-pricing.

THERE'S NO INFLATION -- EXCEPT FOR SUCH NECESSITIES of daily sustenance as food, gasoline and The Wall Street Journal (which, in case you were too busy having a jolly time at the beach to notice when it was disclosed, next month will fetch $1.50 a copy rather than the current buck). But those are obviously exceptions that prove the point, for none constitutes a component of core inflation, so, in the larger economic scheme of things, how significant can any of them be?

Once again last week, confronted by a disquieting indication that inflation is alive and virulent -- namely, that the producer-price index shot up 0.9% in May

[They then] seized on release of the consumer-price index as confirmation that all's well on the inflation front. What better proof, they exulted, than the miserly 0.1% uptick in the CPI -- once you take out pesky items like food and energy. As for the 0.7% rise in the CPI when food and energy are included, "pshaw," they scoffed, that's just the "headline number"!

...And we're also aware that the price of certain commodities has plummeted. DRAM prices, as we noted some weeks back, have suffered a huge markdown. Moreover, the Journal reports that a gram of cocaine, which sold for around $200 barely a decade ago, can be bought these days for as little as $20

(Note to self: cut out lunches, do coke instead...)

HT: The Big Picture