Sunday, September 23, 2012

142 cows / one 2012 pick-up truck

[one local old-timer] told me that in 1949 the price of one pick-up truck with deluxe cab and heater was 10 cows ... he said that his 2012 pick-up truck cost him 142 cows ... imagine, if we were to return to the 10:1 ratio from today's 142:1 ratio, then the cost of beef at the supermarket would increase 14 times over ... that would be $100/lb or more for beef ... most restaurants have a markup of 300%, which would mean a $75-$100 cheeseburger at a fast food joint ... or a stew pot with one pound of beef serving four or more people on a special occasion only ...

today's silver spot price is about $35/oz ... 35x14= $490 which isn't really that far away from my ultimate price target of $599/oz for silver ...

with a shortage of rain, a shortage of hay, and an ocean of quantitative easing by the fed, i expect that we will soon see dramatic commodity price inflation.