October 2012 Index

November 23, 2012

The northern hemisphere is approaching its cold season — when we can expect energy prices to rise in response to the demand for heat, in the form of electricity, gas, or oil. Likewise, the continuing effects of drought and the ethanol mandate, noted above, will likely lead to higher food prices. These will have a sharp impact on the developing world populations, and a duller — but still real — impact on the standard of living of those in the developed world.

We believe that investors and consumers should prepare themselves for the reality that real inflation — the cost of satisfying basic needs — will continue to outstrip the baseline growth of individuals’ earnings. Although core inflation statistics from official sources do not reflect the “volatilities” of food and fuel prices, as consumers, we will feel them. The Guild Basic Needs Index™ will continue to reflect a picture of how inflation in the prices of basic necessities undermines and erodes the standard of living.

November 8, 2012

Speaking of Food, Clothing, & Shelter…

We will continue to track the effects of monetary debasement in the prices of essential, basic needs in our Guild Basic Needs Index™. Our premise is that increased liquidity caused by QE and other means will continue to buoy the prices of food, clothing, shelter, and the energy needed for cooking, heating, and transportation. Please check the GBNI website for our archives on the subject www.gbni.info.

In our opinion, the bottom line is that hiding from the effects of increased liquidity will be very difficult to do. We believe that it is highly probable that the cost of basic needs will rise globally. The GBNI and charts below only pertain to prices in the U.S., but as we discussed above, the effects of QE can cross national boundaries and oceans.