RealMoney Silver - Still No Inflation

Still No Inflation
By Steven Smith
Director and Chief Strategist, Options Alerts
5/14/2008 9:33 AM EDT

These economic data points increasingly fly in the face of reality, yet the market seems to take them face value. So stocks bolted higher following the consumer price index, which crept up a mere 0.2%, or just 0.1% excluding those nonessentials such as food and energy.

This is starting to feel similar to what led to the credit crunch, namely hiding what the true value or cost that goes into valuing and measuring what something is worth. In this case, it is the consumer's dollar. Despite what the government tells us, our money just doesn't buy as much as it did one or two years ago.

My small inflation anecdote: The nearest sandwich/salad bar place here on Wall Street, whose food is slightly above the usually fare, charges a plump $9 per pound (I'm talking about Mangia, for those who work down here). But they also cut some of us slobs a break by offering it at half price starting at 3:00 p.m. The pickings are slimmer, but you can still cobble together a late lunch at much more digestible price. Well, yesterday I discovered the 3:00 p.m. "everything must go" sale is now just a 30% discount. I won't be waiting around to buy lettuce, pasta or potatoes at over $6 a pound.

I'll be that geek on the subway carrying a brown bag. It will be filled with confetti.

Steven Smith writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He was a seatholding member of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) from May 1989 to August 1995. During that six-year period, he traded multiple markets for his own personal account and acted as an executing broker for third-party accounts. He appreciates your feedback; click here to send him an email.

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