Bagel Index Is Showing Inflation's Bite

The Street ^ | November 22, 2006 | Jim Jubak

[GodGunsGuts]

Look up the term "hedonics" and you will find your answer. If you want some really biting articles on the subject, type in "hedonics cpi gold".

[marinamuffy]

Hmmm... bagel and large coffee totaled $2.94 this morning instead of the usual $3.15.....my bagel index conflicts with the authors. :)

[Moonman62]

The yield curve is inverted with the low end a bit above 5% and the longer end below 5%. Those are historically very low rates.

Inflation is not going to be a problem regardless of the bagel or McDonald's index.

[q_an_a]

If all the people screaming about the cost of bagels would mention to the store that they would gladly accept a smaller bagel - would that change everything? Ask any nutrition person and they will tell you food protions have doubled in 15 years - why not take them back and save health costs, the price of flour etc. etc.

[GodGunsGuts]

Have you looked at what has been happening to the price of precious metals for the last five years???

[Diana in Wisconsin]

Why the h#ll anyone is buying gold is beyond me. My Dad and I have been playing the commodities market for years. Our 16,000 oz. of silver has been the best performing "commodity" that we've ever bought.

Sell your gold, buy silver. No, no, wait! Don't do it yet...I'm buying more, and I don't want to share it, LOL! :)

And FWIW, I got a FREE bagel the other day when I bought a dozen. That's got to really screw up this hack's numbers, LOL!

[Silly]

I thought in NYC we used pizza slices and subway rides to gauge inflation -- which are highly correlated.

[GodGunsGuts]

I have done just fine trading gold. I have also traded silver and done quite well. But you are right, silver will outperform gold in the long run. However, silver is extremely volatile and you can loose your shirt in an instant if things go south (if you are a short term trader).

[marinamuffy]

Yes and I hope it continues since I put a few dollar in just a month or so ago :)

[GodGunsGuts]

I think you will be very impressed with your returns...especially if you stay in for the duration of the bull market in PMs.

[Diana in Wisconsin]

"But you are right, silver will outperform gold in the long run. However, silver is extremely volatile and you can loose your shirt in an instant if things go south (if you are a short term trader.)"

Dad? Is that YOU? LOL! Yep. We're in it for the long haul. We haven't sold any in five years, and just buy more when the price falls. :)

[GodGunsGuts]

I wouldn't be surprised if silver goes over $100 by the time this all over. May you grow rich and prosper!

[Diana in Wisconsin]

Thank you. That's our conventional wisdom, too. :)