McDonald's likely to raise prices in 2011

Food prices are rising around the globe and the comments from the world's biggest restaurant chain overshadowed weaker-than-expected December sales at established European and U.S. restaurants, as poor weather hurt demand, and a reported fourth-quarter profit that was in line with expectations.

McDonald's expects its costs to rise 2 percent to 2.5 percent this year in the United States and 3.5 percent to 4.5 percent in Europe.

Beef, chicken, pork, bread and milk products, paper, cola, ketchup and other sauces, and fruits and vegetables top McDonald's U.S. shopping list.

http://finance.yahoo.com/news/McDonalds-likely-to-raise-rb-1008649378.html?x=0

China's Wheat Basket Faces Its Worst Drought In 200 Years

China's wheat basket, Shangdong Province, is stuck in the worst drought in 60 years. If weather forecasts hold true, this will be the worst drought in 200 years, according to Xinhua.

The government has already declared a state emergency to send relief to the province, including trucks full of drinking water and special equipment to irrigate the fields.

http://www.businessinsider.com/china-drought-20-years-2011-2

Seven Things That Will Cost More in 2011 and What You Can Do About Them

1. A Trip to the Grocery Store
2. The Cost of Gas and Heating Fuel
3. Health Insurance and Medical Costs
4. The Cost of Clothing
5. Colleges and Universities
6. Raising Kids
7. Bank and Bank Card Fees

http://www.walletpop.com/2011/01/07/seven-things-that-will-cost-more-in-2011-and-what-you-can-do-abo/

Saudi Arabia cannot pump enough oil to keep a lid on prices

The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

Silver in complete backwardation

We are in the process of pouring over the data from this week, and just below is something we are going to be hearing a lot more about in the coming days and weeks. As of Friday, February 4, 2011, there was near zero contango in the COMEX silver futures market.

http://harveyorgan.blogspot.com/2011/02/silver-in-complete-backwardation.html

Jim Rickards On Inflation And Currency Wars

Jim Rickards: I think there is a definite and highly significant danger of inflation coming from QE and QE2 specifically. A lot of people have said, in fact, the Fed has said, that, if you look at the key price indices, the Producer Price Index (PPI), Consumer Price Index (CPI), and the Personal Consumption (PC) price deflator, they are very, they use the phrase, “well behaved”. For the past year and a half, the critics, and I would include myself, have been saying that this situation is dangerous and unstable. The Fed has been pointing to the price indices and saying that you can’t find inflation under a rock, you can’t find inflation with a microscope, so what are you worried about?

http://investmentwatchblog.com/interview-jim-rickards-on-inflation-and-currency-wars/

Supermarket surprise: smaller servings, same price

Product Old Size New Size Difference
Tropicana orange juice 64 oz. 59 oz. 7.8%
Ivory dish detergent 30 oz. 24 oz. 20%
Kraft American cheese 24 slices 22 slices 8.3%
Kirkland signature paper towels 96.2 sq. ft. 85 sq. ft. 11.6%
Haagen Dazs ice cream 16 oz. 14 oz. 12.5%
Scott toilet tissue 115.2 sq. ft. 104.8 sq. ft. 9%
Lanacane first aid spray 113 grams 99 grams 12.4%
Chicken of the Sea salmon 3 oz. 2.6 oz. 13.3%
Classico pesto 10 oz. 8.1 oz. 19%
Hebrew National franks 12 oz. 11 oz. 8.3%

http://news.yahoo.com/s//fool/20110124/bs_fool_fool/rx109081/