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Monday, June 06, 2005

The CRB Index will be changed

May 10, 2005 09:06 AM US Eastern Timezone

Reuters and Jefferies Announce Significant Update to CRB Index; 50-Year-Old Commodity Benchmark Undergoes Tenth Revision

NEW YORK--(BUSINESS WIRE)--May 10, 2005--Reuters (LSE: RTR, Nasdaq: RTRSY), the global information company, and Jefferies Financial Products, LLC, a leading provider of commodity-related products for institutional investors and a subsidiary of Jefferies Group, Inc. (NYSE: JEF), today announced a strategic alliance to revise the Reuters CRB Index, to be renamed the Reuters/Jefferies CRB Index ("RJ/CRB").

The CRB Index is a leading global benchmark for commodity price movements. The Index is constructed of commodity futures contracts from the energy, industrial metals, precious metals, grains, livestock and soft sectors and offers diversified exposure to the commodity markets.

Since its launch in 1957, the CRB Index has undergone periodic revisions to maintain an accurate representation of the performance of commodities as an asset class. Effective June 20, 2005, the Index will undergo its tenth revision, amending its components to include three additional commodities (unleaded gasoline, aluminum and nickel) and remove one commodity (platinum). Component weightings will now take into account the relative significance and liquidity of the various commodities markets. In addition, the Index will rebalance its component weightings monthly and will derive its value from nearby futures prices.

The link to the press release

They have distorted the PPI, radically distorted the CPI and now they are going to seriously distort the CRB Index. Not only changing the components but taking into account "relative significance" and "liquidity" which sure sounds all very subjective to me, and "rebalance its component weightings monthly".

So I guess we may get a brand new index as often as every month. No more objective indexes of inflation unless some entity comes up with a replacement for the CRB Index. The "powers that be", the king makers, want to hold off the public's serious concern with inflation for as long as possible. Their attempts to distort reality are now blatent. This should have the smart and educated quite worried and seriously going for the gold and silver metals themselves. Possession of gold and silver is necessary to defend oneself from the break down of the world's out of control banking system. The best minds out there figure the financial system goes beserk from say 2008-20012 so you only have a few years to get ready. When it comes to gold and silver most of that getting should already be done or should be done very shortly from now.

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