Diamond News Archives
- Category: News Archives
- Hits: 1306
We already know who.
Inflation “looks quite good,” Chicago Fed President Charles Evans said so eloquently in an interview[1] even before today’s Consumer Price Index was released.
Today, by his standards, inflation looks even better. In June, the Consumer Price Index for all urban consumers rose a brisk 2.9% compared to a year ago, the sharpest increase since February 2012::
Without the volatile food and energy groups, which weigh about 21% in the index, “core” CPI rose 2.2% in June compared to a year ago.
And the purchasing power of the dollar – which the Bureau of Labor Statistics also provides as a helpful reminder of what consumer price inflation actually is – dropped 2.7% from a year ago. In May and June, the dollar’s purchasing power reached, as it just about always does, a new record low. The chart below shows what the purchasing power of the dollar has been doing over the past decade:
Inflation is good for companies and landlords because it means they’re raising prices and rents, and they can report higher revenues without having sold a single extra thing. Their input costs may also rise, but they’re hoping that those increases will be less, and that in this manner, inflation will inflate their earnings. For that reason, they and their Wall Street hype jockeys love consumer price inflation. But they hate wage inflation because it eats into the hard-earned inflation profits. And the Fed has been trying to help out.
So the question arises: Who is paying for this inflation that the Fed has been strenuously trying to obtain over the last few years and that it now has obtained to the satisfaction of even its doves, such as aforementioned Mr. Evans?
...
- Category: News Archives
- Hits: 1512
President Donald Trump and Federal Reserve Chair Jerome Powell Drew Angerer/Getty Images
Federal Reserve Chair Jerome Powell, in an interview published Thursday, suggested he isn't sure how President Donald Trump's trade battles[1] are going to turn out.
But Powell told Marketplace's Kai Ryssdal[2] that business contacts across the US have raised alarm about Trump's trade policy to the 12 Federal Reserve branches.
"And we are hearing a rising level of concern about the effects of changes in trade policy," Powell said.
Recent reports from the 12 Fed branches reflect Powell's statements. Manufacturers in both the Kansas City Fed's and the Dallas Fed's most recent manufacturing surveys showed growing anxiety among businesses about Trump's steel and aluminum tariffs. In the latest Federal Open Markets Committee meeting minutes, a slew of members relayed concerns.
In the interview, Powell declined to forecast the exact economic effects of Trump's recent tariffs, but he did express support for lower trade barriers in general.
"The truth is this: Since War II we've had this trading system develop, and consistently tariffs have come down and trade has grown," Powell said. "And I think that's served the global economy, and particularly the United States economy, very well."
Trump has said his goal is to move toward a world with no tariffs or trade barriers. But given the lack of a clear plan to get to that point and a policy that is moving the US in the opposite direction, such a resolution appears distant.
Powell said that if Trump's trade barriers stay in place for...
- Category: News Archives
- Hits: 1314
Note: The charts in this commentary have been updated to include this morning's Consumer Price Index[1] news release.
Back in 2010, the Fed justified its aggressive monetary policy "to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate" (full text[2]). In effect, the Fed has been trying to increase inflation, operating at the macro level. But what does inflation mean at the micro level — specifically to your household?
Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart below illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U, which we'll refer to hereafter as the CPI.
The slices are listed in the order used by the BLS in their tables, not the relative size. The first three follow the traditional order of urgency: food, shelter, and clothing. Transportation comes before Medical Care, and Recreation precedes the lumped category of Education and Communication. Other Goods and Services refers to a bizarre grab-bag of odd fellows, including tobacco, cosmetics, financial services, and funeral expenses. For a complete breakdown and relative weights of all the subcategories of the eight categories, here is a useful link[3].
The chart below shows the cumulative percent change in price for each of the eight categories since 2000.
Not surprisingly, Medical Care has been the fastest growing category. At the opposite end, Apparel deflated since 2000 and has nearly returned to those levels in recent years. Another unique feature of Apparel is the...
- Category: News Archives
- Hits: 1312
(IDEX Online) – Sarine Technologies Ltd held a celebratory event to mark the official opening of the Sarine Technology Lab in Mumbai, India.
The event was attended by Sarine customers, diamond professionals and trade press members despite the seasonal floods, Sarine said.
The audience enjoyed a presentation about the Sarine Lab and the changes it brings to the industry, given by Sarine Group CEO, David Block.
Industry leaders were receptive to the change the lab will bring through its AI (artificial intelligence) technology-based approach, and voiced their enthusiasm for the wave of transformation that is sweeping the industry. Invitees were also given an exclusive tour of the new Sarine Lab.
David Block, Sarine Group’s CEO, said, “Objective grading reports play a significant role in our industry, enabling efficient trade and empowering consumers to purchase with confidence. We are proud to lead the technological evolution in this area that will significantly improve accuracy and repeatability. The India lab opening is an important and exciting milestone for Sarine that has been continuously supporting the Indian leadership in diamond manufacturing and trading for the last three decades."
The official ribbon cutting was performed by Bharat Diamond Bourse (BDB) Vice President Mehul Shah, Sanjay Shah from the GJEPC, Mahendra Gandhi, President of MDMA and Sanjay Kothari – TDC convener....
- Category: News Archives
- Hits: 1382
Rio Tinto (ASX, LON:RIO) said Thursday is putting up for sale a 3.14-carat, vivid pink diamond at its 2018 tender, the largest stone of its colour in the history of the annual sale of sparklers from its West Australian-based Argyle mine.
The emerald-cut polished stone, named The Argyle Alpha, is one of 63 rare pink, red and violet diamonds — weighing a combined 51.48 carats — Rio expects to sale at this year’s Argyle Pink Diamonds Tender.
The stone, found in 2015, is part of a collection of six “hero” diamonds the miner will offer at the sale.
The six top pink, red and violet diamonds Rio expects to sale this year. (Image courtesy of Rio Tinto | Flickr.)
While Rio has not set a price for the Alpha, the record sum for a pink diamond is $2.2 million per carat, which means the stone could potentially be worth around $7.9 million.
At auctions, however, pink diamonds have fetched much more than at tenders. The 59.6-carat Pink Star diamond, in fact, sold for $71.2 million last year, becoming most expensive gem ever sold that way.
While the Argyle Alpha is the biggest pink ever sold since Rio began offering its diamonds in 1984, the largest ever pink diamond recovered from the Argyle mine is the Pink Jubilee, which weighed 12.76 carats.
The emerald-cut polished diamond the largest stone of its colour in the history of Rio's annual sale of sparklers from its West Australian-based Argyle mine. (Image courtesy of Rio Tinto | Flickr.)
The prolific Argyle mine, Australia’s biggest diamond operation and the source of rare and prized fancy pink gems, is set to close in...