Commodities and Inflation

[MrSmart]

I think this LOS is poorly representitive of it’s purpose.
Storable, and cyclical commodities are a good hedge against unexpected inflation, while the non-storable and acylical are weak hedges against unexpected inflation?
What is the definition of unexpected inflation? The statistical biases included in those measures are bound to exist.
For a country that has 40% CPI weight in food items, a spike in prices will make it a “good hedge” against unexpected inflation. There goes your subjective learning outcome statement.

 

[onlysimon]

you are overthinking it.If it is non storeable. then it’simpossible to use as a hedge. i think thats all there is too it.

 

[MrSmart]

onlysimon wrote:
you are overthinking it.If it is non storeable. then it’simpossible to use as a hedge. i think thats all there is too it.

It does not say that non-storable commodities are a poor hedge against inflation, it’s only for the unexpected portion of inflation. Which does not make sense.

 

[onlysimon]

“expected inflation” would be included in nominal interest rates.

 

[MrSmart]

What does that have to do with the thread though?