Thursday, April 21, 2011

Inflation: McDonald's says so

Expect the "2$ value menu" and the "10$ value meal" at your window. Soon enough.

McDonald's warns of higher food inflation
McDonald's Corp (NYSE:MCD - News) said higher costs for beef, bread and other items cut into its quarterly margins and that inflation for the year would be worse than expected.

The inflation comments on Thursday sent shares of the world's largest restaurant company down 2 percent, even though strong sales helped McDonald's post a first-quarter profit that beat expectations. March sales at established restaurants also rose more than expected.

"The key question now will be how they are going to raise prices to try to offset some of these food costs," Edward Jones analyst Jack Russo said.

McDonald's said it now expects food costs to rise between 4 percent and 4.5 percent in the United States and Europe this year. In January, McDonald's said it expected its food costs to be 2 percent to 2.5 percent higher this year in the United States and up between 3.5 percent and 4.5 percent in Europe.

McDonald's has been outperforming most other U.S. restaurant chains and taking market share from smaller rivals amid a slow U.S. economic recovery.


Thursday, April 14, 2011

Monday, April 11, 2011

Gas prices to reach $5 a gallon by summer?!

Expect a total market collapse at that price point (without payroll keeping up with rate of inflation)

Gas Prices Climbing Toward $5 Per Gallon
At one time, $5 per gallon gas seemed like a farfetched idea, but that is no longer the case.

As CBS 2’s Roseanne Tellez reports, as of Monday, the average price for a gallon of regular unleaded gasoline in the Chicago area is $4.11, compared with $3.71 a month ago, and about $3.10 a gallon at this time a year ago.

Some experts say $5 per gallon gas is possible by Memorial Day.

The public can and will reduce consumption this summer. The question is how - and for how long.

* How many people will opt to work from home via TeamViewer?

* How many people will forgo any summer scenic drives and road trips?

* How many people will hoard food and shop once a month?

* Saving on trips to the mall - yet absorbing rise in cost of shipping on online purchases...

* Summer camp? Try stay at home with unemployed mom or dad camp

* You've heard about car pool to work, try car-pool shopping

* Soccer moms, will you just cancel kids after school activities to save on gas?

* Will people fly around the country for leisure when flight costs catch up to cost of fuel?

Rough summer.

Signs of a system cracking: Bonds giant PIMCO shorting US treasuries

What's a saver/investor to do? Hold everything in cash while facing hyper inflation? Invest in over-valued topping market? Volatile commodity markets and precious metals? Expensive and unreliable "currency mix" ETF-s?

PIMCO goes short U.S. government debt - Yahoo! Finance