January 2012 Index

January 20, 2012

Declining Food Inflation Shows Up In The Guild Basic Needs Index …But As We Said Above, It Is Not Permanent

Available only in the Guild Global Market Commentary, the Guild Basic Needs Index (GBNI) tracks the changes in price of the essential needs for living; food, clothing, shelter, and energy.

2011 saw prices of certain basic needs pull back. Correspondingly we saw a reduction in the rapid rate at which the GBNI had been outpacing the U.S. inflation measure, the Consumer Price Index (CPI). Longer term inflationary pressures are building, especially in food and energy, and we expect a re-acceleration of inflation will resume in years ahead. The GBNI gives our readers insight into the subsurface inflationary trends that cannot easily be gleaned from the data offered by government statisticians.

In the twelve years since the new millennium started, the prices of the ingredients for life measured in the GBNI are up almost 70 percent, versus about 35 percent for the CPI. To measure a decline in the standard of living, you can take either inflation measure, and compare it to the fact that over the same twelve years, wages in the U.S. have gone nowhere.

Our goal is to help readers and investors preserve the purchasing power of savings, and thus their standard of living.