Since there is no inflation, (HEH HEH HEH) I thought I would write about the prices of commodities you are now seeing. Actually in many instances you really don’t see them; they hide in stuff you use.

Inflation to me, but not to the government, is really only about two things, eating and using energy.

Housing prices may have come way down, but I’m not in the market. Natural gas prices are down, but do you see your gas bill going down?

Our government chooses to reflect a whole group of prices which may be accurate but to me they are not relevant.

I know you Social Security recipients would beg to differ on why you are being told there is no inflation so you are not getting a cost of living increase. OK, let’s look at the facts as provided by USA Today.

As I write this on Nov. 2, measuring from Jan. 1, cattle is up 14 percent in cost, coffee is up 45 percent, copper is up 13.6 percent, corn is up 39.3 percent, lumber is up 31 percent, pork bellies (bacon) is up 18.2 percent, soybeans are up 17.8 percent and wheat is up 29.7 percent.

Even those little trinkets are more expensive as silver is up 46 percent and gold up 23.3 percent.

I talked to a rather astute longtime local jeweler and he said that prices of jewelry are up about 30 percent. He said that his stores don’t really notice it until they try to replace an item that has been in stock for at least six months. Then, bingo, the price he pays is up.

He said consumers are cashing in their own gold as a reflection of historic high prices. His opinion is that consumers will not stop shopping for jewelry, but price and quality may now be an issue.

People get married and my wife still shops, so the jeweler is probably not going out of business.

OK, let’s take a look at the stock markets.

Again, through October year-to-date, the Dow Jones Industrial Average is up 6.6 percent. The Standard and Poor’s 500 is up 6.1 percent and the Nasdaq Composite is up 10.5 percent.

The Russell 2000 index of small stocks is up 12.5 percent and the S&P Midcap 400 is up 14.1 percent. The Wilshire 5000, which measures most stocks traded, is up 9.8 percent so the broader market is doing better than the blue chips by themselves.

Internationally, the Dow Jones Global Index excluding the U.S. is up 6.1 percent which is the same return as our Dow. Chile is blasting ahead 37.2 percent, Sweden is up more than 14 percent, South Korea almost 12 percent and Mexico, Germany and Israel, are all up more than 10 percent.

Japan, down 12.7 percent, is the champ of losses so far.

It’s fun shopping to replace your bonds or certificates of deposit, isn’t it? If you are an income buyer, it is a struggle to say the least.

The Wall Street Journal says that money markets are yielding .68 percent. Personally, I don’t see many that high.

The Journal also says that five-year CDs are at 2.09 percent. Fed Funds are yielding between 0 and .25 percent so banks continue to struggle to make a buck.

What is going on with rates? Are they going up?

Most everyone I chat with, my clients, think that interest rates have to go up. Maybe so, but no one says it has to be soon.

Interest rate forecasting is like forecasting the stock market, rarely does anyone get it exactly right. I don’t know any more than anyone else, but it would not surprise me to see rates remain at this level for a while.

This is a great time of the year to review your tax situation, gains and losses, if you will. I do my portfolio adjustments about this time each year. I hate waiting until the last minute.

Just an observation here. You know, one thing contributing to unemployment is M&A, mergers and acquisitions.

We are experiencing that here in the Butler area where one corporate concern is buying another resulting in duplication of jobs. Some of those people in the company being acquired are going to lose their jobs. When this happens on a larger scale sometimes hundreds or thousands of people become unemployed.

This activity across the country is increasing, so more unemployment does not surprise me.

I told my wife that with gold prices so high perhaps we should consider selling some of her jewelry. She gave me one of those “I don’t think you’re funny and I’ll break your arm” looks, so I guess that’s not happening.

Howie Pentony is a Saxonburg client portfolio manager.