Housing deflation hiding inflation in other goods
Image by Getty Images via @daylifeLeading investor Jim Rogers has blasted the US government's inflation data as a "sham" that is causing the central bank to massively understate price pressures.Excluding food and fuel removes the two essential goods that are going up in price right now. While fuel prices have been volatile. Obama policies of strangling supply will inevitably drive up the cost of gasoline. Food prices have already been rising and if the ethanol subsidy survives food will go up even more in price.
Rogers, who shot to fame after co-founding Quantum Fund with George Soros, argued the Federal Reserve uses information that relies too heavily on housing prices.
"I expect interest rates in the US to go much, much, much higher over the next few years," he said, adding that he is betting against US Treasuries.
The core personal consumption expenditure index, which strips out food and energy costs, is the Fed's preferred measure of inflation. This was flat in October for the second straight month.
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Rogers also predicted that the price of gold will rise eventually above $2,000 an ounce. The price of spot gold hit a record high of $1,430.95 an ounce before falling back to close on Tuesday at $1,409.35.
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Gold is ridiculous and may get more ridiculous.
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