The Tide has Turned

Are we witnessing the first inklings of price pressures, massive currency devaluation and attempts by individuals to protect themselves against both. Farmers in Argentina are currently holding the majority of their soybean holdings in storage rather than sell, in light of the devaluation of the Argentina Peso. One such farm manager commented ” Pesos are no good, the worse thing you can do is hold pesos.” Meanwhile in countries like South Africa, which has seen the Rand depreciate over 20% last year, inflation is beginning to rear its ugly head.  This  loss in purchasing power is not lost on  South African investors who have piled into the rand based platinum ETF. If you think that this rise in prices is limited to  the EM’s, witness the story in the WSJ discussing Procter and Gambles attempt to manage margin (i.e. raise overall prices) by explicitly cutting the size of their most popular tide brand, thus effectively raising the cost 13%. The message to Central Bankers worldwide: Your inflation wish might be coming true…Good luck. Continue to Buy Stuff.