I mentioned how much I admire the Dow Chemical CEO earlier that week - we need our political leaders to have that sort of spine and straight talk and global vision [May 28: Bravo Dow Chemical CEO] Wednesday he dropped the bombshell about the 20% price increases across the board (and again folks, that all feeds up to the Procter & Gambles, the Kimberly Clark’s of the world, which means it will feed to you down the road - diapers, paper towels, etc etc) and today he has a comprehensive 15 minute interview on CNBC (in which he takes a nice swipe at the “underreporting” of inflation) Gosh, I enjoy that human more and more by the day. I type that stuff on the blog every day/week/month but when citizens with a voice and ability say it, it finally will start to matter (we can hope).

Weekend homework assignment for readers is to take the 5 minutes to listen to the Fox Business interview I referenced in Wednesday’s post, and that 15 minute interview - 20 very worthwhile minutes to spend. (or you can just read the blog every day and get the same info from a guy without a mustache or cool accent). Just imagine whether we had public like that running for President. I could feel some comfort instead of joining Jim Cramer on the hard linoleum floor every night in fetal position.

I repeat that every week (long day readers will be bored by now) but for new readers - inflation is the most regressive tax there is, and the inflation that is being hidden away in government

reports WILL eventually come to bear; first to the producers who soon after will pass a portion down to consumers. These reports are so flawed I don’t even want to dirty my blog with the nonsense they are spewing out (i.e. gas prices went down last month according the government - seasonal adjustment baby!) The market can whistle past the graveyard and we have to respect that as investors, but the effects on the real economy (world wide) are there; since Wall Street takes government reports as gospel and the government reports understate everything, I guess we can whistle past the graveyard indefinitely. As always “it doesn’t matter, until it matters.” We’ll see more and more evidence in the 2nd half of 2008 and into 2009 on the “real economy” (as opposed to the fairy tale economy the pundits talk about). At some point the Street will acknowledge it, grudgingly. Not now though; still happy times - low inflation, low employment. Uncle Sam says, so we believe.

• In the interview, Liveris said he thinks the U.S. is underestimating the level of inflation in the economy and he expects the rise in energy costs is beginning to destroy demand.
• “We’re in a part of the economy that is very elastic,” he said. “So unlike electricity, or unlike transportation, which up until now has been relatively inelastic, we’re getting demand-destroyed.”
• Liveris expects the price increases his company made will eventually be passed on to the consumer.

Original post by TraderMark