Over the past few weeks I’ve commented on inflation.  It’s here, whether or not it’s reported.  Can I prove this?

Well, beyond my own anecdotes regarding the 50% rise in most of my food costs there’s another indicator.  Wheat futures are going nuts.  Up, up, and away.   Why?

First off, commodities are rising across the board.  With the value of the dollar going down, “real assets” are going up.  Something tangible vs something printable.  You can’t print wheat.  It takes time to grow.   It has a lot of value built into it.  The time it takes to grow, the farmer’s time growing it, the water, the land, and the necessary items to keep it healthy and bug free.  So, you know there’s a lot of value built right into it.

What else is happening?  Plenty.  We are the world’s bread basket.  We export tons of food product each year to the rest of the planet.  Increasing demand globally impacts us.  The more someone else wants a thing, the more they’ll bid for it.

And finally, from my perspective, we have one other issue.  Ethanol.  It’s impacting our food markets in more ways than one.  Several effects are occurring.  First, substitution.  Since the price of corn has gone up (due to supply being diverted to fuel creation) other crops replace corn use.  If corn is more expensive as a feeder crop you select something else in place of it.  And the thing you select goes up in price too because demand increased on it.  On top of the substitution effect, we have the effect of farmers growing less of other things and more corn because they want to cash in on the Ethanol program.  Hey, corn pays better as a fuel, I should grow more of that.  That means less wheat gets grown, as we’re all growing inefficient fuel now….great idea.  Once again, I’ve never heard of any great nation burning it’s food supply….but maybe I missed that lesson in history class.

So, our wheat growth supply is down, it’s being used as a substitute for corn, and demand is up from many corners.  Overall, the price goes up.  That means more expensive bread, burgers, pizza, etc.  But hey, that’s not inflationary (see, we don’t count food in inflation numbers…hooray).

We’ll see more about this in the coming weeks and months.  Just remember, you’re only perceiving inflation guys!

I can’t help myself….economic comments are ahead.  Dodge this one if you’d rather not think about this stuff……

Things still aren’t “cleaned up”, nor will they be for a while.  Massive unplanned rate cuts, major bank downgrades, and the fear of bond insurer downgrades are all plaguing the markets at the moment.  And there’s a simple reason why…..

Our economy has no real gage of value any longer.

See, the dollar is backed by debt, and the debt is backed by the dollar.  It’s all about faith in the system, and little more.

Once upon a time our dollar was backed by gold.  Having our currency backed by a true benchmark, we couldn’t print money at will.  We had to peg values against a certain supply of a commodity.  Without such a peg we can print money at will, alter rates (which also changes the money supply immensely), and “fine tune” the economy.  What the fine tuning has bought us is bubble after bubble.

Looking outward to the larger economy I do believe a period of stagflation is at hand.  We’ve all seen the inflationary signs through food, energy, and basic need costs increasing.  Sure, tech items drop regularly, but tech items aren’t basic daily needs for an average family.

So, what can one do about it?  Simple.  Cut your debt.  Don’t follow the latest trend without thinking.  Treat your house as a home, not the end all investment.  Oh, and pay for what you buy.  If you can’t buy it without credit, re-evaluate your need for it.

What spurred this random post???  Check out this link, and you’ll see why I’m a little hot under the collar this morning.   Bankruptcy, foreclosure, and walking away.  Yup, I’m betting this will be the next big business for the bulk of this year.  It’s a shame, but many folks who over bought will be looking to talk to the owners of the site I linked above.  Maybe I’ll see them soon with their own Airstream!  :)  Glad to say I’ve got no debt! 

October of 1994 I received a speeding ticket.  42 in a 35 zone.

It was during a rough patch in grad school.  I was feeling low, coming around a corner, and I hadn’t seen the speed limit sign change down from 45 to 35.  I did see the police cruiser shortly after the bend in the road, and was surprised to see the car with lights on behind me moments later.

Since that point in time I’ve never had a ticket, accident, or anything else for the matter.  The biggest deal that occurred with one of my vehicles was in 2000 when a pair of low lifes broke into my Jeep and stole my stereo and a ham radio.  Yeah, I’m sure they were licensed to use it…….hmmmm…..

Why am I recounting all of this?  What has spurred on “memory lane?”  Simple, today after returning from Sedona (hooray Rollies Camera shop) I picked up my mail and had a thick envelope from Prescott Valley, Arizona.  What could it be?

What was in the envelope was my first speeding ticket in 14 years.  The notice told me I was doing 66 in a 55 zone.  It even included a cute little picture of me in the driver’s seat, and a photo of my new Arizona license plate.  And the ticket is accurate.  I can believe I was doing 66.

See, route 69 from I-17 is mostly a 65mph road.  Wide open, few houses, only a few stop lights, and some tiny towns where speed limit signs are clearly posted.  Coming into Prescott Valley the limit is 65 mph as well.  Unfortunately well outside of town there’s a sneaky little 55 mph sign (I noticed it today near a “photo enforcement sign”).

I also noticed the camera apperatus today as well, and thought to myself, “Hey, it’s one of those automatic ticket systems.”  Go figure 45 minutes later I’d see what the results of the system looked like first hand.

Now, I’m not complaining.  Last week returning from Phoenix I know I was doing 66 (1 mile per hour more than 65) in that area.  The truck in front of me was too, and the little Honda riding up my tail pipe was as well.  Not to mention the rest of the traffic along with me.  I even asked Sadira along that stretch of highway, “it’s still 65, right?”

Nope, it isn’t.

It’s funny.  I’ve been referred to as a “Grandma driver”, pokey, safe, and I’ve been told that I stick to the rules too much.  I’ve got two friends in Colorado who will laugh at the thought of me getting a ticket…..they rode to Durango with me once and they were teasing me about obeying all the signs and having my hands at 10 & 2 on the steering wheel…..

As an aside…..the photo of me from the automated system was so good you can clearly see my hands were in fact at 10 & 2.  Also, the photo showed off my spiffy sunglasses……I was looking really great that day!

So, Mr. Safe Driver has his first ticket in a decade and a half.  Had I seen the sneaky speed sign (blocked by the big truck near me leaving the light before Prescott Valley) you can be assured I would have been doing about 56mph maximum.  I follow the rules.

What’s this little disaster going to cost me?  How about $190?  You have to love speed traps.  I’ll give it to Prescott Valley, it’s a great way to get additional revenue as a tax base begins to contract thanks to the super weak housing market.  But they’ll never get me again….now I know where the speed limit changes…..and I won’t go with the flow of traffic.  I’ll not be used to make up city revenue.

And yes, I’m paying the fine.  I can’t contest the speed I was going.  It’s dead on.  And I can’t contest the existence of a speed limit sign, I saw it today…..miles away from the speed trap, near a stop light…..with no other signs posted until after the trap.  Cute, effective, and sly guys!

But wait, there’s more……

In addition to my little moving violation paperwork I had one more envelope.  Ah, but this one would be different and positive.  A letter from the organization I’ve been trying to join for more than one year.  My last round of resumes was submitted months ago, and the only response I ever got was an e-mail containing other people’s resumes for a different job (uh…..WHOOPS).

So, what was in the envelope?  An offer?  An interview?  A turn down letter????

It’s really hard to build suspense on a blog…..What do I do, create 5 inches of white space or something?  I’ll work on that. 

How about none of the above?

The letter let me know that my skills were impressive, as were the skills of many other candidates.  Uh oh, going the wrong way…….but that’s when it got funny!

While we were impressed by the qualifications of our candidates, we have had some positive organizational changes in that area.  We have added another related position and redistributed duties.  As a result we are canceling the position and are opening 2 new positions.

At the end of the letter I’m encouraged to reapply to one or both of the positions.  Given the fact they have four paper copies of my resume, multiple e-mailed copies, and more than 4 applications from me, I’m surprised they want additional paperwork from me.  Further, the last time they were in contact they e-mailed me the personal details of several candidates, including their social security numbers!

Now, I have to ask you……do you think I should reapply? 

Tomorrow I’m staying away from my mailbox!

In today’s economics corner I’ve seen more on the indicators front that should be concerning.  None of it is shocking though.

1. Citigroup is writing down $18 Billion due to subprime issues.
2. Citigroup is looking for new investors in China and Kuwait.
3. Citigroup will layoff between 20,000 and 24,000 employees.
4. Stagflation is being talked up.
5. We’re producing more Ethanol from corn.
6. Staple food prices are increasing (maybe #5 is driving that?)
7. My soy milk went from $2.69 a box in March to $3.79 a box today.  Under a year.  While close to 50% inflation, it’s not 50% which I guess should make me happier.  Hmmm.
8. Relating to number 5 once more, have you ever heard of a nation burning it’s food supply?  Just asking. 
9. Countrywide is being bought by Bank of America because Countrywide is in trouble.
10. I’m wondering how many Countrywide Employees will be hanging with those Citigroup employees soon?

Well, there are a few of the fun indicators and lead stories out of the Prudentbear site.  They didn’t mention ethanol or my soy prices.  Those are my observations.