Category: Inflation
The analysis published under this category are as follows.
Saturday, August 24, 2024
Can Greedy Politicians Really Stop Price Inflation With a "Price Gouging" Ban? / Politics / Inflation
By: MoneyMetals
Kamala Harris is going to fix price inflation.
As she explains it, greedy corporations are arbitrarily raising prices and causing inflation. She will stop this “price gouging” and inflation will go away.
The problem with this plan is greedy corporations don’t cause price inflation. Greedy politicians do.
Thursday, August 15, 2024
What's So Great About 2 Percent Inflation? / Economics / Inflation
By: MoneyMetals
Don’t be fooled when you hear “inflation is coming down.” That's not the plan and it never was.
The fact is price inflation was up in July.
And it will be up in August.
And it will be up in September.
That’s because rising price inflation is the Federal Reserve’s stated policy.
Wednesday, June 26, 2024
Inflation – How It Started And Where We Are Now / Economics / Inflation
By: Kelsey_Williams
INFLATION – HOW IT ALL STARTED
Early ruling monarchs would ‘clip ’ small pieces of the coins they accumulated through taxes and other levies against their subjects. The clipped pieces were melted down and fabricated into new coins. All of the coins were then returned to circulation. The clipped coins circulated side by side with other coins and all were assumed to be equal in value.
As the process evolved, more and more clipped coins showed up in circulation. People became suspicious and were reluctant to accept the clipped coins at full face value. Their concern prompted the ruling powers to reduce the precious metal content of the coins. This lowered the cost to fabricate and issue new coins. Soon, all of the coins in circulation had less precious metal content. Hence, there was no need to clip the coins anymore.
Sunday, June 16, 2024
Inflation Is Dead! Or Is It? / Economics / Inflation
By: MoneyMetals
Strike up the band and wave the victory banners! Inflation is dead!
Or is it?
The May Consumer Price Index (CPI) report was cause for optimism. But price inflation is like that stubborn weed in the driveway. Just when you think you’ve killed it for good, it pokes back through a crack.
Keep in mind that this time last year, we were also talking about a victory over inflation.
Monday, April 08, 2024
Media Elite Belittle Inflation Struggles of Ordinary Americans / Economics / Inflation
By: MoneyMetals
A top writer for the Wall Street Journal thinks Americans who complain about the economy just aren't aware of how good things are.
Chief Economics Commentator Greg Ip wrote a gaslighting article last week with the headline, "What's Wrong With the Economy? It's You, Not the Data."
The article begins with the claim that Americans just don't have the facts on inflation.
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Saturday, February 17, 2024
INFLATION and the Stock Market Trend / Stock-Markets / Inflation
By: Nadeem_Walayat
US CP LIE Inflation has been moderating, largely due to the base effect as surge in inflation a year ago leaves the annual inflation indices thus giving the illusion of inflation being under control hence the focus of econofools. Whilst there is also real world impact of weak European and Chinese economies, that and the effect of base rate rises feeding through should continue to put downward pressure on CPI until at least release of Feb data in March 2024, after which inflation could tick higher to back over 3% for the rest of the year.
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Friday, November 03, 2023
FED Loads of Money! / Economics / Inflation
By: Nadeem_Walayat
S&P Measuring Move
Rally from 4333 to 4540 is 207 points, 4333 - 207 points = 4126. Not a forecast rather another piece of the puzzle eyeballing sub 4200, and my long standing objective of 4150 as being probable.
So stock market eyes sub 4200, and eying achieving 4150 with possibility of overshoot to just under 4100 over the next 4 to 6 weeks. Therefore the market is primed to snap back inline with my trend forecast by means of taking a significant tumble over the coming weeks where we can all look for catalysts for but the forecast remains blind to all that has transpired since it was posted 10 months ago!
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Saturday, September 02, 2023
CPI Smoke and Mirrors Hides Decade Long REAL Inflation PAIN! / Economics / Inflation
By: Nadeem_Walayat
INFLATION
Firstly understand that inflation is by DESIGN, the last thing your masters want is for the slaves to stop working so one of the primary mechanisms used to keep the slaves working is inflation because it destroys the purchasing power of earnings and savings so that most folks are kept running on the work hamster wheel into their graves where their lifetime of savings have been eroded away by INFLATION, or stolen by the banking crime syndicate, financial con men and through a myriad of modern day scam artists, run a mile from fund managers! They are all scam artists! If you think UK and US inflation is high take a look at the poor souls in Turkey (where I will soon be taking a trip, Istanbul), 58% inflation against which the depositors are thrown scraps of a 15% TAXED interest! Yes that's right, you get TAXED on the interest that FAILS to keep pace with inflation! Same in the UK, fake inflation of 7.2%, savings rates typically of 4.5% to 5.5% and the lemmings appear on broadcast news happy that they are in receipt of a sub inflation pittance, this after TEN YEARS of STEALTH theft of the purchasing power of their savings! At least the risky stock market gives ordinary folks a good chance to avoid the stealth theft, money in the bank is guaranteed to be systematically STOLEN! Yes we can play the fixed rate game which can temporarily work, but money in the bank in the UK over 10 years will lose between 1/5th and 1/3rd of it's value!
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Saturday, August 19, 2023
Talking Heads Predict No Recession While Shrinkflation Clips Consumers / Economics / Inflation
By: MoneyMetals
Precious metals markets are extending their losing streak as the U.S. dollar pushes higher. The Dollar Index rose for a fifth straight week through Thursday's close.Although the downward momentum in metals markets has been fairly steady for over a month, the total amount of price retracement has been modest. Volatility in gold and silver markets has actually been coming down.
When volatility gets compressed, that tends to precede a big move – often in the opposite direction of the prevailing trend, which has been down.
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Sunday, July 09, 2023
Uk Inflation in 2023: The Current Situation / Economics / Inflation
By: Umer_Mahmood
The April index falls less than expected to 8.7%. And the core figure has been at its best since 1992. After the IMF's good estimates on the economy, markets see a hawkish BoE
Difficult day for the stock markets of the Continent, which has been affected by a long series of bad news. Starting with the cold shower that came from British inflation, to which are added the fears of the failed agreement on the US debt ceiling and those about the damage that the Chinese economy could suffer from the new wave of Covid together with the ban on Micron chips. But, if on the impasse in Washington there is the belief that an agreement will arrive before 'date X', the race in prices in the United Kingdom gives us a glimpse of a dark future on the interest rate front.
Monday, April 10, 2023
Stock Markets Counting Down to US CPI Inflation Data Release / Stock-Markets / Inflation
By: Nadeem_Walayat
It's CPI Tuesday! We usually get a fake out move going into CPI then a reversal soon after which given that the market has been falling since the 6th of March into CPI data release then we should be setting up for a reversal higher some time after release of CP LIE which chimes with my end of the correction expectations given that both primary (3900) and secondary (3820) correction targets have been fulfilled.
Last month my CPI forecast table suggested to expect 6.28% vs actual of 6.4%. For February the table expects a sharp drop to 5.66% vs consensus of 6%, actual is probably going to be somewhere between 5.66% and 6%, so a net positive CPI data release should give weight to the next Fed rate hike being 0,25% instead of 0.5%, with the really big CPI drop coming on April's data release after which I expect inflation will become more sticky.
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Saturday, April 01, 2023
THE INFLATION MEGA-TREND / Economics / Inflation
By: Nadeem_Walayat
The primary driver for stock prices is Not Innovation, Disruption or even GDP growth (though it is part of the soup), No the Primary driver for stock prices is INFLATION! It's why Turkish stocks (before this weeks killer Quake) were racing ahead despite persistently high Turkish inflation rates of as much as 85% during 2022 as they experienced their own version of the Crack up BOOM!
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Sunday, February 26, 2023
Fed President Worried the Fed Risks a Repeat of the 1970s / Interest-Rates / Inflation
By: MoneyMetals
Gold and silver markets drifted lower again this week as investors braced for additional Fed rate hikes to come.
On Wednesday, the Federal Reserve released the minutes from its latest policy meeting. Policymakers agreed on the need for additional increases in interest rates. They settled on just a 0.25% bump up at their last meeting. But some dissenters called for a larger 0.5% hike.
Sunday, February 19, 2023
Get Ready for the GREAT DISINFLATION / DEFLATION CON of 2023 / Economics / Inflation
By: Nadeem_Walayat
US CPILIE smoke and mirrors inflation rate has peaked and will head sharply lower during 2023 that will sow the seeds for the next spike higher to 10% during 2025.
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Saturday, February 18, 2023
The Inflation Bonfire Continues but More States Are Fighting Back / Economics / Inflation
By: MoneyMetals
As investors digest the latest readings on inflation, employment, and consumer spending, precious metals markets are wavering on fears of further rate hikes.
Inflation continues to run well above the Federal Reserve’s 2% target.
On Tuesday, the Labor Department released the latest Consumer Price Index figures. The CPI rose a higher than expected 0.5% in January. That translates into an annual gain of 6.4%.
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Wednesday, January 25, 2023
STEALTH INFLATION / Economics / Inflation
By: Nadeem_Walayat
Gold and especially Silver are coming alive, the sleepers finally waking up to the INFLATION that they have been waiting for a decade to materialise. Where most are focused on the smoke and mirrors annual rate of CPLIE that the clueless mainstream media will latch onto to indicate that the Fed is winning and inflation is being defeated as the annual rate of CPI falls as the economy weakness..
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Friday, December 02, 2022
Why the Fed is Wrong about Inflation Coming Down / Economics / Inflation
By: Richard_Mills
The US Federal Reserve continues to grapple with inflation, which at 7.7% (October CPI) is more than triple the Fed’s 2% target, without causing a recession by lifting interest rates too high.
The Fed has two options when it comes to interest rate increases designed to tackle the highest US inflation since the early 1980s. The first is it continues to hike rates, beyond what the economy can handle, causing a recession, usually defined as two consecutive quarters of negative economic growth. This is the “Volcker Fed” playbook.
In 1979, then US Federal Reserve Chair Paul Volcker faced a serious challenge: how to quell inflation which had been wracking the economy for most of the decade. The prices of goods and services had averaged 3.2% annually since World War II, but after the 1973 oil shock, they more than doubled, to an annual 7.7%. Inflation reached 9.1% in 1975, the highest since 1947. Although prices declined the following year, by 1979 inflation had reached a startling 11.3% (led by the 1979 energy crisis) and in 1980 it soared to 13.5%.
Not only was inflation going through the roof, but economic growth had stalled and unemployment was high, rising from 5.1% in January 1974 to 9% in May 1975. In this low-growth, hyperinflationary environment we had “stagflation”.
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Thursday, November 24, 2022
Why INTEREST RATE HIKES Are INFLATIONARY! / Interest-Rates / Inflation
By: Nadeem_Walayat
Unfortunately I will have to leave this mostly for next time. But basically INTEREST RATE HIKES to bring INFLATION DOWN! Is NOT going to work because INTEREST RATES DO NOT CONTROL the RATE of INFLATION. So that which academics have built their whole careers on is BS! All I hear is Volcker raised rates that brought inflation down and so rinse and repeat, was it Interest rates that killed the Inflation of the 1970's? Are you sure your not lapping up the propaganda which is ECONOMICs perpetuated by the propaganda arms of Governments called central banks who's primary remit is to put up a smoke screen of misinformation so as to allow governments, to get away with printing money!
As I have voiced for well over a decade, Inflation is a function of governments PRINTING MONEY, of which QE is part of the equation i.e print money to monetize government debt, which despite all of the noise continues to this very day! Governments printing money on an epic scale for which the smoking gun is the Governments deficit spending, the US Federal Government is spending $1.4 trillion more than it earns in revenue that is PRINTING MONEY! For the UK it's about £120 billion,
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Thursday, November 24, 2022
Are I-Bonds Predicting a drop in Inflation ? / Interest-Rates / Inflation
By: Nadeem_Walayat
A patron commented - Interesting take on inflation: the US Treasury I-bonds (which one can invest $10k each year) will pay an annualized interest from November 1, 2022, through April 2023 of 6.89%, down from the 9.62% rate offered since May 2022. Probably an indicator that the inflation stats that are forthcoming will show we’ve peaked. https://treasurydirect.gov/savings-bonds/i-bonds/i-bonds-interest-rates/
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Monday, November 21, 2022
CPLIE - The Exponential Inflation Mega-trend / Economics / Inflation
By: Nadeem_Walayat
People need to learn to forget about graphs such as this (Annual percentage change in CPLIE) -
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Friday, November 18, 2022
WHY PEAK INFLATION IS a RED HERRING / Economics / Inflation
By: Nadeem_Walayat
Dear Reader
The Inflation Mega-trend
REAL INFLATON and not the BS statistics that the likes of the Fed and Bank of England vomit every month, fake inflation statistics watered down over decades to hide the stealth theft of wealth and purchasing power of wages and savings..
I have been calculating my my own inflation measure for the UK for a couple of decades now which computes to the UK inflation rate currently being at about 20% per annum! In fact it has been in a range of 15% to 20% for over a year!
As for the United States, shadow stats does a good job of calculating the real rate of inflation which ia based on the US governments own 1980 formulae that resolves to 13.5% vs 8.2%.
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Tuesday, November 01, 2022
The Exponential Inflation Mega-trend / Economics / Inflation
By: Nadeem_Walayat
REAL INFLATON and not the BS statistics that the likes of the Fed and Bank of England vomit every month, fake inflation statistics watered down over decades to hide the stealth theft of wealth and purchasing power of wages and savings..
I have been calculating my my own inflation measure for the UK for a couple of decades now which computes to the UK inflation rate currently being at about 20% per annum! In fact it has been in a range of 15% to 20% for over a year!
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Wednesday, October 26, 2022
TIPS BONDS FAKE INFLATION PROTECTION! / Interest-Rates / Inflation
By: Nadeem_Walayat
How to protect one self form INFLATION! Well what the investment industry sold to their clients were Inflation Protected Bond funds! The sales pitch went that when Inflation soars and regular bonds fall don't worry you are protected so given that inflation has taken off like a rocket have these bond funds delivered on their sales pitch?
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Thursday, October 20, 2022
UK in CRISIS - Liz Truss Resigns, Inflation Nightmare, Soaring Interest Rates, Economic CRASH! / Economics / Inflation
By: Nadeem_Walayat
We have a Dogs dinner of a Tory government, waste of space Quasi Modo has gone, next will be Liz Trustless what a pair of idiots, Hunt, the Hunt as Chancellor is only good for reading scripts he gets given!, Come on Boris come back, all is forgiven, what was the worst under Johnson, parties, stoopid media wasted thousands of air time on parties! MSM Is an irrelevance, dumb, blind, completely clueless, after all they are Journalists NOT analysts, they don't have a clue! Quasi has gone, so will Trussless and it could even be as soon as today! Definitely before the end of October, she will be GONE! GOOD RIDDANCE to Britain's worst Prime Minister ever! And paving the way for Britain's first brown Prime Minister!
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Sunday, September 25, 2022
INFLATION! INFLATION! INFLATION! / Economics / Inflation
By: Nadeem_Walayat
The big questions for the US and how our US tech stocks will fair over the coming year are -
1. Does the Federal Reserve finally understand just how dangerous inflation actually is ?
2. If it does then how is it going to subvert the inflationary policies of the White house, does not matter which clown is in office i.e. democrat or republican, BOTH have tendencies towards rampant money printing given the 4 year election cycle.
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Tuesday, August 09, 2022
Why PEAK INFLATION is a RED HERRING! Prepare for a Decade Long Cost of Living Crisis / Economics / Inflation
By: Nadeem_Walayat
The idiot in charge of the Bank of England Bailey now warns of 13% inflation, 5 quarter deep uk recession, and requests Britains workers not ask for high pay rises due to the risks of the wage price spiral, despite paying himself 575,000 for making a dogs dinner of the economy. So are his predictions going to come true, we'll a year ago he was barking about transitory inflation and a growing economy ahead! Completely clueless idiot!
The problem is this the Bank of England CAUSED the INFLATION by means of rampant money printing that they then used to monetize near half of UK government debt! That's what caused the inflation! And now the morons are trying to fight 10% inflation with 1.75% interest rate, Bailey and his fellow morons do not have clue, they are literally fumbling in the dark for the light switch and we pay the price for these clowns!
As for the wage price spiral, it does not exist, there is no wage price spiral instead it is a price wage spiral! i.e. Wages are trying to catch up to out of control inflation and failing to do so hence the cost of living crisis where wages cannot keep up with prices in the shop.
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Saturday, August 06, 2022
COST OF LIVING CRISIS NIGHTMARE - Expect High INFLATION for whole of this DECADE! / Economics / Inflation
By: N_Walayat
The Inept Governor of the Bank of England has miserably FAILED in the banks primary remit of pegging inflation at 2%. This video illustrates why the Cost of Living Crisis will soon become a decade long nightmare for most Brits.
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Friday, August 05, 2022
WHY PEAK INFLATION RED HERRING / Economics / Inflation
By: Nadeem_Walayat
When one looks under CPI inflation hood then one sees strong signs of inflation topping, given what we have already seen transpire in the commodities markets such as Gasoline prices having fallen since the May inflation report and many of the components such as Airfares also turning lower.
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Friday, July 29, 2022
How to lock in a Guaranteed 9.6% return from Uncle Sam With I Bonds / Personal_Finance / Inflation
By: Submissions
By Chris ReillyDo you want to turn inflation to your advantage?
Be a financial winner while everyone else is losing to inflation?
Today, I’ll show you a little-known investment that can do exactly this for a part of your portfolio.
Best of all… it’s guaranteed by the US government.
You’ll want to act on this soon. Because inflation just keeps getting worse.
On July 13, the government released the latest numbers...
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Friday, July 22, 2022
Why UK Cost of Living Crisis Will Get X10 Worse! Britain Heading for INFLATION CATASTROPHE! / Economics / Inflation
By: Nadeem_Walayat
UK CPI inflation has just nudged higher to 9.4% that is prompting the always wrong crowd to crow loudly about how peak inflation being just around the corner, however the herd remains completely blind to what is set to follow over the remainder of this decade and the funnel all of their weak brain power into regurgitating the same annual percentage change graphs, all whilst missing the Inflation big picture that warns that even if peak inflation i just around the corner to soon to be followed by inflation falling to say 6% or even 5%, however this is not going to make any difference to the INFLATION PAIN that is going to manifest over the coming years,
Britain's inflation goose is well and truly cooked as our inept government and even more moronic central bank have sleep walked Britain to back to the 1970;s which will manifest in a cost of living crisis that most are unprepared for as my latest video illustrates.
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Friday, July 15, 2022
Peak Inflation is Not the Issue / Economics / Inflation
By: Michael_Pento
The reality of record-high inflation combined with a hawkish monetary policy is slowing the economy sharply and has led to the current U.S. recession—two back-to-back quarters of negative growth. The economic contraction should soon cause inflation to roll over along with bond yields; but that isn’t necessarily indicative of a new bull market. It is much the same process that occurred leading up to the Global Financial Crisis of 2008.The major difference is that the level of inflation today is much greater than it was 15 years ago--a white-hot 9.1% for June of 2022, which is actually close to 20% if calculated using the same method back in 1980. That level is much greater than the 4.1% in December of 2007. Inflation may be peaking, but it is peaking at over 4.5x greater than the Fed’s target. Meaning, the FOMC will find it very difficult to give up its inflation fight anytime soon. It would be a different story if the Effective Fed Funds Rate was trading close to the Fed’s neutral range, which Mr. Powell believes is close to 2.5%, not the 1.58% seen today. With CPI at 9.1% and its balance sheet at $8.9 trillion, it is untenable for the Fed to remain stimulative to inflation. Indeed, the FOMC wants the interbank lending rate at 3.5-4.0% by the end of 2022.
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Tuesday, July 05, 2022
The Inflation Mega-trend and UK House Prices - Housing Market Analysis Trend Forecast 2022 to 2025 / Housing-Market / Inflation
By: Nadeem_Walayat
Inflation has soared to a 30+ year high even on the highly manipulated CPLIE measure resulting in the biggest fall in living standards since records began for the UK and probably similar for US and most western households who are in for a deep real terms drop in disposable income during 2022, with the UK set for an eye watering record plunge of over £2200 per household. Which if you remained focused on the mainstream press then you would not have seen any of it coming having been hoodwinked for the whole of 2021 by the central bank mantra of 'transient inflation' which as I repeatedly warned would turn out to be PERMANENT. However the con merchants are now playing the blame everything on Russia game, as if inflation and all of the West woes were none existant until Putin delusionally marched his amateur army into Ukraine having believed his own lies echoed by his YES Men ensuring him that victory would come within days of invasion.
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Sunday, June 12, 2022
Shrinkflation! / Economics / Inflation
By: MoneyMetals
Precious metals markets enter summer trading with investors looking for signs of a directional move.
Gold and silver prices consolidated this spring with silver showing more of a downside bias. Silver did find 200-week moving average support at the $21 level in early May, however. That long-term trend indicator is also now heading in an upward direction. So, there is a good chance that the lows for the year are in.
Metals markets have yet to fully reflect broader inflation pressures in the economy, a statement you’ve heard us repeat many times in recent months.
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Friday, June 10, 2022
Food and Gas Prices: Is the Rising Trend (Finally) Ending? / Economics / Inflation
By: EWI
The Elliott wave structure of a key commodity ETF provides a clue
Consumers around the globe are wondering when they will finally see some relief from rising prices at the gas pump and grocery store.
It's difficult for these consumers to get a handle on what to expect from reading recent headlines because some are conflicting.
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Saturday, June 04, 2022
Inflation Mutation - This is not your Grandpa’s Inflation problem / Economics / Inflation
By: Gary_Tanashian
The Fed is starting to play catch-up with inflation signals from the bond market as evidenced by the Fed Funds Rate finally being pulled upward by the implications of the rising 3 month T-bill yield, among other more obvious signals like the long since rising 2yr Treasury yield and ongoing inflation headlines we read about every day.
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Saturday, June 04, 2022
White House Inflation Scapegoat / Politics / Inflation
By: MoneyMetals
Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
As the Biden administration scrambles to try to contain inflation – or at least make a public relations show of it – precious metals investors are wondering how much longer gold and silver prices will remain contained.
Metals markets got a bit of a lift this week through Thursday but have pulled back a bit here today. As of this Friday recording, gold is flat for the week now to trade at $1,860 per ounce. And silver is down 20 cents or 0.9% this week to trade at $22.12 an ounce.
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Friday, May 27, 2022
How the United States Conquered Inflation Following the Civil War / Economics / Inflation
By: MoneyMetals
By Larry Reed : Americans today are once again the victims of price inflation brought on by runaway government spending and printing of unbacked paper money.
According to the most recent polling data, the American public’s approval of Congress stands at a dismal 21 percent. Almost four times as many people disapprove of the job it’s doing.
That’s par for the course in recent decades. It’s the major reason the Washington sausage grinder earns so little praise. To be fair, though, let’s review an occasion when lawmakers got something right. I’m prompted to share this story now because its lessons are especially relevant considering today’s concerns about rising price inflation. The year was 1875.
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Friday, May 20, 2022
THE INFLATION MEGA-TREND QE4EVER! / Economics / Inflation
By: Nadeem_Walayat
A reminder folks that regardless of Fed propaganda and what you read in the mainstream press QE is 4 EVER! Once it starts it will not stop. As I have been iterating for over a decade now as the following excerpt from 3 years ago illustrates (Stock Market Trend Forecast March to September 2019) that CRISIS ARE MONEY PRINTING EVENTS TO CAPITALISE UPON BY INVESTING IN ASSETS THAT ARE LEVERAGED TO INFLATION!
So why has the the stock market soared, what is that the stock market knows that most commentators and economists fail to comprehend? We'll for one thing there are the dovish signals out of the Fed which go beyond a pause in their interest rate hiking cycle in response to a subdued inflation outlook. Similarly the worlds other major central banks have their own reasons to avoid rate hikes, most notable of which is the Bank of England that has been busy propagandising the prospects of a NO Deal Brexit Armageddon in attempts to scare Westminister into avoiding EXITING the European Union in anything other than an ultra soft BrExit.
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Saturday, April 30, 2022
High Inflation Forecast for Whole of this Decade Due to Rampant Money Printing, Fed Strategy Revealed / Economics / Inflation
By: Nadeem_Walayat
UK CP LIE Inflation hits 6.2%, whilst RPI that which most corporations raise their prices to has rocketed higher to 8.2% whilst real UK inflation stands at at least 15%, meanwhile across the atlantic US CPLIE inflation of 7.9 % stands on the brink of breaking to well above 8% with real inflation also at around 15% So much for the Pandemic deflationary depression that the clueless mainstream media had been promoting for much of 2020 and then sleep walked into the mantra of transitory inflation for the whole of 2021, finally awakening during 2022 to what amounts to out control inflation, though like gullible fools swallowing the central bankster's sales pitch of laying the blame on Czar Putin's Afghan War 2.0 in Ukraine which illustrates the extent to which what you read in the mainstream press tends to be garbage written by clueless journalists.
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Sunday, April 24, 2022
WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET / Stock-Markets / Inflation
By: Nadeem_Walayat
This is why one has NO CHOICE but to be invested in price volatile assets such as stocks and housing which whilst yes will move up and down in value from tim to time like a yo yo nevertheless over he long-run will be leveraged to rampant government and central bank money printing inflation so we have NO CHOICE BUT TO BE INVESTED IN SUCH ASSETS! NO CHOICE WHATSOEVER FOR THE ALTERNATIVE IS CERTAIN DESTRUCTION OF ONES HARD EARNED WEALTH which is why the largest asset class I have held for near 10 years now is bricks and mortar UK housing regardless of what the price indices do from month to month, year to year, or the clowns proclaim about imminent deflationary crashes. There is NO CHOICE BUT TO BE HOLD ASSETS THAT ARE LEVERAGED TO INFLATION AS THE ALTERNATIVE IS ONE WILL LOSE THE VALUE OF ALL OF ONES HARD EARNED SAVINGS! Which is why whenever I am asked if now is a good time to buy property I tend to remind those asking that house prices are leveraged to inflation so regardless of the tripe in the clueless mainstream press of how UK housing is unaffordable, however inflation ensures that the overall trend trajectory remains upwards for the fundamental fact that unlike fiat currency houses cannot be printed and thus house prices have confounded the clownomics in the mainstream press by soaring into the stratosphere.
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Thursday, April 21, 2022
THE INFLATION MEGA-TREND - Protect Your Wealth From Loss of Purchasing Power / Economics / Inflation
By: Nadeem_Walayat
Inflation has soared to a 30+ year high even on the highly manipulated CPLIE measure resulting in the biggest fall in living standards since records began for the UK and probably similar for US and most western households who are in for a deep real terms drop in disposable income during 2022, with the UK set for an eye watering record plunge of over £2200 per household. Which if you remained focused on the mainstream press then you would not have seen any of it coming having been hoodwinked for the whole of 2021 by the central bank mantra of 'transient inflation' which as I repeatedly warned would turn out to be PERMANENT. However the con merchants are now playing the blame everything on Russia game, as if inflation and all of the West woes were none existant until Putin delusionally marched his amateur army into Ukraine having believed his own lies echoed by his YES Men ensuring him that victory would come within days of invasion.
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Sunday, April 10, 2022
New Biden Tax & Spend Plan Throws Gasoline on Inflation Bonfire / Stock-Markets / Inflation
By: MoneyMetals
As the Federal Reserve ramps up its rhetoric on rate hikes, precious metals markets continue to consolidate.
Gold and silver showed some signs of basing out and readying to moving higher with a rally on Thursday. As of this Friday recording, gold prices come in at $1,951 an ounce – up 0.9% for the week. Silver, meanwhile, is putting in a slight weekly gain of 0.3% to trade at $24.97 per ounce.
Turning to the platinum group metals, they have been slumping on late. Platinum is off 1.6% this week to trade at $1,000. And palladium, which is putting in a big advance here today of +$200 so far, is up a robust 7.4% this week to command $2,499 per ounce.
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Thursday, April 07, 2022
This Recession indicator just sent a warning: here’s the takeaway / Economics / Inflation
By: Stephen_McBride
There’s a lot of fear in the markets right now.Inflation…
The war in Ukraine…
Rising interest rates…
And now the “inverted yield curve.”
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Sunday, March 27, 2022
High Inflation Forecast for Whole of this Decade Due to Rampant Money Printing, Recession Risk 2022 / Economics / Inflation
By: Nadeem_Walayat
UK CP LIE Inflation hits 6.2%, whilst RPI that which most corporations raise their prices to has rocketed higher to 8.2% whilst real UK inflation stands at at least 15%, meanwhile across the atlantic US CP Lie inflation at 7.9 % stands on the bring of breaking above 8% with real inflation also at around 15% So much for the Pandemic deflationary depression that the clueless mainstream media had been promoting for the whole off 2020 and then sleep walked into mantra of transitory inflation of 2021, finally wakening during 2022 to what amounts to out control inflation of 2022.
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Friday, March 25, 2022
Crush inflation with These Magic Words / Economics / Inflation
By: Stephen_McBride
Are you feeling the pinch?
Inflation is getting out of hand.
I buy the same items every week at the grocery store… yet my bill has shot up 50% in the last six months.
Gas prices just hit $8/gallon here in Ireland… and the cost of heating a home jumped by roughly $500 this winter.
Today, I’ll show you the best way to crush inflation with your investments.
Hint: You want to buy companies that possess two magic words—more on that in a moment…
Wednesday, March 16, 2022
Inflation Big Picture / Economics / Inflation
By: Rambus_Chartology
One of the headlines this week was, the biggest rise in inflation since 1982. To put that into context we’ll need to look at some long term charts and what the Chartology looks like back then and today.
Right now everyone is trying to blame inflation on someone, regardless of the facts that I will present to you in the charts below. It is exactly the same thing when a Republican or Democrat is elected president. If a Republican is elected to the White House the Democrats will will say they will ruin the economy and the same thing will be said by the Republicans if a Democrat wins, it never ends.
We are going to hear the same rhetoric over and over again with inflation because most people don’t understand the big cycles that move through the markets that can last many years. We are currently seeing that in the stock markets right now that have been in a secular bull market since the 2009 crash low. Since the 2009 crash low we have had one Democrat president and one Republican as president with a new Democrat president that has been in office less than a year.
Before we look at tonights charts I would like to show you a satirical look at the, HISTORY CHART FOR THE END OF THE WORLD. What this chart shows you are all the events over the last 40 years that felt like the end of the world if you were trading the markets when they happened. Many of you were members during the 2020 crash and got to feel what an end of the world event felt like that all of the other end of the world events felt like that never worked out for the bears.
If you recall on the day of the presidential election last year I made the BOLD statement that it wouldn’t make any difference who was elected president. By that I meant that the secular bull market that began in 2009 would continue unabated into the future and as you can see it has.
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Monday, March 14, 2022
Washington Enters Full Scapegoat Mode for Brewing Inflation Disaster / Politics / Inflation
By: MoneyMetals
First It Was “Transitory,” Then a Sign of Recovery, Then Corporate Greed, Now It’s Vladimir Putin’s Fault!
First, they said inflation was transitory. Then when that line became untenable, they said inflation was a sign of a recovering economy. Then when polls showed most Americans believed they were losing ground financially, the White House blamed corporate greed. Now they’re saying it’s all Vladimir Putin’s fault.
Another volatile week of trading saw precious metals markets rally to new highs for the year on Tuesday before suffering a sharp drawdown on Wednesday and more selling on Friday.
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Saturday, March 12, 2022
THE 2020's INFLATION MONSTER! / Economics / Inflation
By: Nadeem_Walayat
Many investors used to buying the dip are confused as to why rallies from the dip lows keep fizzling out with stocks once more resuming a trend to fresh lows, despite many if not most stocks now trading over 50% off their highs.
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Monday, February 28, 2022
White House Now Blames Its Inflation on “Defending Freedom” / Economics / Inflation
By: MoneyMetals
Rising geopolitical and inflation risks brought heightened volatility to markets this week.
Russia’s military incursion into Ukraine is being described as the worst attack on a European nation’s sovereignty since World War II.
In response, the Biden administration announced a new round of economic sanctions against Vladimir Putin’s government. The sanctions seek to economically isolate Russia and restrict its ability to market its products in the global economy.
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Thursday, February 24, 2022
Energy Shock: Ukraine Crisis to Push Inflation Higher / Economics / Inflation
By: MoneyMetals
As Russia initiates military action in Ukraine, pain at the pump is about to get even worse.
Fuel costs have already been soaring due to oil and gas supply constraints coupled with broader inflationary pressures. The national average for a gallon of regular unleaded is $3.55 – up 75 cents from a year ago. Some parts of the country are paying closer to $5.00 per gallon.
Now the threat of full-scale war in Ukraine is sending risk premiums in futures markets even higher. Crude oil futures jumped to over $100 per barrel ahead of the U.S. market open on Thursday morning.
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Thursday, February 24, 2022
UK Inflation at 30-year high / Economics / Inflation
By: Boris_Dzhingarov
The rate of inflation in the UK is at its highest point for 30 years, according to recent government figures. The Office for National Statistics (ONS) said that the consumer price index (CPI) used to measure inflation had risen to 5.5% for January 2022. Not since March 1992 (7.1%) have levels been this high and economists predict it could even eclipse that benchmark by April.
All of which is concerning news for the average consumer, but what exactly is inflation, how is it measured and what is causing it? Can the living wage keep up? And what are the potential consequences of such an increase? Read on to find out more.
Tuesday, February 15, 2022
US Price Inflation Rates Shoot Above the 1980 Peak / Economics / Inflation
By: MoneyMetals
Americans get fed a lot of BS when it comes to price inflation. Prices in the U.S. are rising faster than they were in the late 1970s when gasoline shortages triggered an economic crisis.
Today, supply chain disruptions and exploding prices are also nearing crisis levels.
Meanwhile, there has been a dramatic rise in dishonesty amongst politicians, bankers, and the corporate press on this subject. They hide the truth on inflation for a couple of reasons.
Tuesday, February 15, 2022
Hot New Inflation Reading Spotlights Fed Failures / Stock-Markets / Inflation
By: MoneyMetals
Another hotter than expected inflation report jolted markets this week.
On Thursday, the Labor Department released the latest Consumer Price Index report. The CPI surged 7.5% in January from a year earlier. That exceeded most forecasts and marked a new four-decade high for consumer price increases. Brian Cheung of Yahoo Finance gives his take on the situation:
Brian Cheung: Price’s (are) rising in the United States across the board by 0.6% on a month-over-month basis. If you index it over a year-over-year period, 7.5% was the growth that we had seen in the report. That is well above the Street's estimates of 7.3% and continues to ratchet up. We've seen Joe Biden talk very frequently, lately, anytime he has the podium about the impact of inflation on Americans. That's because this is becoming a huge and already is becoming a huge political issue for him. Now, of course, all eyes are not just on the White House, in Congress where they engineer fiscal policy, from the Federal Reserve as well -- where the extraordinary monetary stimulus has obviously led to some sort of demand push that is leading to inflation that is not fading as fast as Federal Reserve officials had originally hoped or messaged in the beginning of 2021. That's going to be a very interesting story as we get to that mid-March meeting where the Fed is expected to start raising rates.
Thursday, December 30, 2021
2022 – The Year of (Gold) Inflation? / Economics / Inflation
By: Arkadiusz_Sieron
High inflation won’t go away in 2022. Good for gold. However, it is likely to continue to climb and reach its peak. That sounds a bit worse for gold.If 2021 was tough for you, I don’t recommend reading Nostradamus’ predictions for the next year. This famous French astrologer saw inflation, hunger, and much more coming in 2022:
So high the price of wheat,
That man is stirred
His fellow man to eat in his despair
Yuk! So, life is about to get a little more complicated: we must now avoid becoming infected and being eaten by our fellow citizens! If you are interested in how cannibalism will affect the gold market, I’m afraid that I don’t have adequate data. Anyway, if you end up in the pot together with vegetables and your colleagues, gold’s performance probably won’t be your top priority.
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Tuesday, December 21, 2021
Inflation Torpedoes Biden Agenda – Will It Next Wreck Financial Markets? / Economics / Inflation
By: MoneyMetals
President Joe Biden’s so-called “Build Back Better” agenda was dealt a likely fatal blow on Sunday. Moderate Democrat Joe Manchin announced that he would oppose his party’s massive $2 trillion spending bill.
That effectively kills it in its current form.
Chief among Senator Manchin’s reasons for opposing the Biden administration’s far-reaching spending scheme is inflation.
Monday, December 20, 2021
Consumer Price Index (Less Food & Energy) Climbs To Highest Levels Since 2007-08 / Economics / Inflation
By: Chris_Vermeulen
In Part I and Part II of this research article, I shared my research into the state of past and current US and global economy, Rest Of World Debt, DGP Implicit Price Deflator, Fed Funds Rates, and other technical data charts. The purpose of this article is to share with you two key components of the current US and global market trends; higher inflationary trends and a potentially trapped US Federal Reserve.
Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!
I will share more data/charts, and my proprietary US economy/Fed modeling systems results in Part III. My objective is to share my belief that the US Federal Reserve still has room to adjust interest rates (within reason) and how the US/global economy is starting to trend into the highest inflationary levels since 1975~1985. These levels could frighten traders/investors, but given the global economic constraints of the COVID lock-downs, I consider the current economic trends a symptom of the stimulus/solution – not necessarily an inherent economic trend. Allow me to explain my thinking in more detail.
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Monday, December 13, 2021
Act NOW to Protect Your Wealth From PERMANENT Transitory Inflation / Stock-Markets / Inflation
By: Nadeem_Walayat
Dear Reader
This is the concluding part 2 of 2 of my analysis that explains why 'Transitory' Inflation is about to become permanent and some pointers of what one should do to protect ones wealth from the stealth inflation theft of purchasing power. This analysis formed part of my in-depth housing market analysis in progress which has mushroomed beyond my original planned trend forecast for UK house prices which now encompasses an analysis of the state of play of most of world!. So in the interests's of timeliness my stocks analysis is being posted separately ahead of my housing market analysis as will be the case for future analysis form now on.
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Friday, November 19, 2021
Protect Your Wealth From PERMANENT Transitory Inflation / Economics / Inflation
By: Nadeem_Walayat
In this analysis I explain why 'Transitory' Inflation is about to become permanent and some pointers of what one should do to protect ones wealth from the stealth inflation theft of purchasing power. This analysis formed part of my in-depth housing market analysis in progress which has mushroomed beyond my original planned trend forecast for UK house prices which now encompasses an analysis of the state of play of most of world!. So in the interests's of timeliness my stocks analysis is being posted separately ahead of my housing market analysis as will be the case for future analysis form now on.
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Thursday, November 18, 2021
Inflation Ain’t Transitory – But the Fed’s Credibility Is / Economics / Inflation
By: MoneyMetals
Last week’s surge in gold and silver prices was due, at least in part, to a realization by Wall Street traders that inflation isn’t going away.
Fed Chair Jerome Powell had assured us all the trend higher in prices would be “transitory,” but another giant surge in the Consumer Price Index has investors wondering if they can believe anything Powell says.
They shouldn’t. People should view most of what Powell has to say about inflation in the same manner as they now view “14 days to flatten the curve” and other government lies.
Powell is well aware that higher prices are anything but temporary. For starters, many of the drivers behind higher prices are structural and won’t be disappearing any time soon.
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Tuesday, November 16, 2021
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! / Economics / Inflation
By: Nadeem_Walayat
So called transitory US inflation surged to 5.4% for September remaining sticky at above 5% with little signs of moderation and thus likely to prompt the Fed to taper in the near future to signal intentions to bring inflation down to 2% in 2 years time as their 'transitory' propaganda smoke screen is wearing thin. Of course real US inflation in is at least double official fake CPI. Whilst the real rate of inflation in the UK is even worse, likely 3 to 4 times official CPI i.e. about 15% to 20%.
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Saturday, November 13, 2021
UK Inflation Soaring into the Stratosphere, Real rate Probably 20% Per Annum / Economics / Inflation
By: Nadeem_Walayat
Forget the official UK inflation indices which are just as fake as those in the US and those that spew out of the CCP, a year ago I estimated the REAL rate of UK inflation was 16%, today I estimate it to be near 20%! But that is the average amidst that there will be huge variances with the price of many goods, materials and services more than doubling! Case in point being UK energy / natural gas prices which have doubled and are on their way to tripling as the pieces of turd energy companies FAILED to HEDGE prices as they crept higher during the summer months because they knew at the end of the day they could just walk away from their contracts with customers, shut up shop and reopen under a slightly different name with the same staff and premises, WHAT A SCAM!
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Saturday, October 30, 2021
Central Planners Clinging to Hope That Inflation Is “Transitory” / Economics / Inflation
By: MoneyMetals
As trading closes out for October ahead of Halloween, the specter of inflation is haunting markets.
While some investors still cling to the hope that it will be transitory, a growing number are now worried that pricing pressures and even shortages will intensify heading into Christmas – and possibly get worse in 2022. Discussions of the term “hyperinflation” have even made the rounds on social media following a warning from Twitter CEO Jack Dorsey.
More on that in a bit. But first, let’s review this week’s price action in precious metals markets.
Gold over the past few trading days has been oscillating around the $1,800 level. Prices currently come in at $1,783 an ounce to register a weekly decline of 0.9%.
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Tuesday, October 19, 2021
Prices Rising as New Dangers Point to Hard Assets / Commodities / Inflation
By: MoneyMetals
A big week for precious metals markets as inflation pressures push consumer prices to painful new heights.
On Thursday, the U.S. Labor Department reported that inflation at the wholesale level is up 8.6% from a year ago. That’s the steepest annual advance since the data started being reported.
Of course, Americans who have shopped at a grocery store recently or tried to rent or buy a car don’t need to read a government report to discover that prices are surging. In many respects, inflation is even worse than reported officially.
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Sunday, October 17, 2021
US Economy and Stock Market Addicted to Deficit Spending / Economics / Inflation
By: Nadeem_Walayat
What to know what's driving the stock market into the stratosphere? US Deficit Spending! (actually twin deficits including Trade).
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Sunday, October 03, 2021
Powell: Inflation Might Not Be Transitory, After All / Economics / Inflation
By: P_Radomski_CFA
At a panel discussion, Fed Chair finally admitted that inflation could be more (!) long-lasting than expected. What does it mean? Hawks. Lots of them.
Capitulation
With Fed Chairman Jerome Powell finally having his ‘come-to-Jesus’ moment on Sep. 29, the central bank chief’s skittish words helped light a fire under the USD Index. For context, I’ve been warning for months that Powell remains materially behind the inflation curve. And with his indecisive speech upending the Fed’s confidence game, the gambit is showing signs of unraveling.
Speaking at an ECB panel discussion on Sep. 29, he said:
“The current inflation spike is really a consequence of supply constraints meeting very strong demand. And that is all associated with the reopening of the economy, which is a process that will have a beginning, middle and an end. It’s very difficult to say how big the effects will be in the meantime or how long they last.”
For context, first it was “base effects,” then it was “transitory” and now “it’s very difficult to say.”
Friday, September 10, 2021
The Inflation/Deflation debate wears on… / Stock-Markets / Inflation
By: Gary_Tanashian
Our 30 year Treasury yield ‘Continuum’ chart indicates that deflation is the dominant trend, but…
Steve Saville has written a post that got me thinking about carts and horses and more precisely, which comes before which. Is the inflationary horse pulling the deflationary cart up hill or is the deflationary cart leading the horse to drink from the shrinking liquidity pool periodically?
See The Crisis-Monetisation Cycle
In conclusion to this short post Steve asserts…
Read full article... Read full article...“The crisis-monetisation cycle doesn’t end in deflation. The merest whiff of deflation just encourages central bankers and politicians to do more to boost prices. In fact, the occasional deflation scare is necessary to keep the cycle going. The cycle only ends when most voters see “inflation” as the biggest threat to their personal economic prospects.”
Tuesday, August 31, 2021
Inflation Properly Defined / Economics / Inflation
By: Antonius_Aquinas
The use or rather misuse of language has always been an effective tool of politicians to enact their agendas. George Orwell’s “Politics and the English Language” brilliantly showed, in his day, how language was being manipulated for all sorts of totalitarian measures:
Read full article... Read full article...Political language — and with variations this is true of all political parties, from Conservatives to Anarchists — is designed to make lies sound truthful
and murder respectable, and to give an appearance of solidity to pure wind. One cannot change this all in a moment, but one can at least change one’s own habits, and from time to time one can even, if one jeers loudly enough, send some worn-out and useless phrase — some jackboot, Achilles’ heel, hotbed, melting pot, acid test, veritable inferno, or other lump of verbal refuse — into the dustbin, where it belongs.*
Saturday, August 14, 2021
Everything Peaked in 1980 – The Waning Effects Of Inflation / Economics / Inflation
By: Kelsey_Williams
EVERYTHING PEAKED IN 1980
Both gold and crude oil peaked at all-time highs in 1980. Those highs are still intact when the effects of inflation are accounted for. Below are the charts for both gold and crude oil…
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Wednesday, August 11, 2021
Why the Fed is Wrong About 'transitory' Inflation / Economics / Inflation
By: Richard_Mills
If rising food prices are ruining your appetite, you’re not alone.
Costs of a number of grocery staples have been rising all year, including some that haven’t gone up in decades, such as peanut butter. Meats are seeing large increases, with the price of chicken climbing 8%, and pork and beef increasing about 5%.
According to Statistics Canada, via CTV News, two breakfast ‘staples,’ coffee and peanut butter have gone up significantly since January, a respective 17% and 6%. Canada’s Food Price Report predicts that prices will increase 5% this year, adding almost $700 to the average Canadian family’s grocery bill.
In the United States, US consumer prices hit their highest level in 13 years in May, jumping 5% from May 2020. The US Department of Labor says rising costs of meat products and baked goods led the surge in food prices.
“We’re in a period of unprecedented commodity inflation,” Unilever CEO Alan Jope told investors in early June.
According to Business Insider, US food prices are rising in tandem with broader inflation, with the CPI hitting 5.4% in June. Prices are climbing due to key commodities becoming increasingly difficult to obtain, shipping delays, labor shortages (for example in meat packing plants, hit hard by covid-19) and severe droughts in a number of countries (more on that below).
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Tuesday, August 10, 2021
Here’s What You Should Do About Inflation / Stock-Markets / Inflation
By: Submissions
By Justin Spittler - “What should I do about inflation?”My Uber driver recently asked me this after I told her what I do for a living.
And she’s not the only one asking me this question.
My mom… brother… friends who’ve never bought a stock in their lives… and many of you who read my essays every week want to know the same thing:
Why are pricing soaring? Should I do anything to prepare?
And most importantly…
What should I do with my current investments?
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Thursday, August 05, 2021
Political Hacks Concoct Excuses for Their Inflation / Economics / Inflation
By: MoneyMetals
Jerome Powell, after last week’s FOMC meeting, said inflation has run hotter than expected. However, he wants to assure Americans that the destruction of their dollars’ purchasing power is temporary.
His diagnosis? Ballooning demand for goods and services when the U.S. economy reopened from COVID shutdowns drove prices higher.
Rest easy, folks. Prices will stop surging as soon as demand moderates and supply catches up!
That’s the official line, anyway.
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Tuesday, July 27, 2021
Inflation Pressures Persist Despite Biden Propaganda / Commodities / Inflation
By: MoneyMetals
As the summer doldrums drag on, precious metals bulls are eying potential support levels for a seasonal bottom.
The gold market found support at the $1,750 level last month and has since been trading with a slight upside bias. Although the price action hasn’t been especially exciting, base building in these summer months can be a healthy technical process in the context of a larger bull market.
Meanwhile, investors are weighing troubling developments on the inflation front. Price increases are hitting consumers every time they shop, and that trend shows no signs of letting up.
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Saturday, July 24, 2021
Biden’s Dangerous Inflation Denials / Politics / Inflation
By: MoneyMetals
This week he superficially addressed the problem by admitting the obvious – that prices have been rising rapidly this year – while denying that the inflation surge represents anything out of the ordinary.
“Some folks have raised worries that this could be a sign of persistent inflation, but that’s not our view,” Biden said. “Our experts believe and the data shows that most of the price increases we’ve seen [were] expected and expected to be temporary.”
Trust the experts! After all, when have they been wrong about anything…besides wars and pandemics?
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Sunday, July 18, 2021
What Does The Fed Mean By “Transitory Inflation” And Why Is It Important To Understand? / Stock-Markets / Inflation
By: Chris_Vermeulen
As the markets react to the somewhat shocking CPI and Inflation data while Q2:2021 earnings continue to roll across the news wires, we wanted to take a minute to explore the recent Fed comments related to “Transitory Inflation” and what that really means.
For those of you not familiar with the word ‘transitory’ (in conjunction with inflation) according to the Merriam-Webster Dictionary, Transitory means:
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Monday, July 05, 2021
FED: U.S. Cocktail of Growth and Inflation / Stock-Markets / Inflation
By: P_Radomski_CFA
The inflationary cauldron continues to boil. However, the USDX and Treasuries are undervalued relative to U.S. GDP growth prospects. What’s going on?
The Rising Tide of Inflation
While investors are all-in on the U.S. Federal Reserve’s (FED) “transitory” narrative, the inflationary cauldron continues to boil. Case in point: the IHS Markit released its manufacturing PMI on Jul. 1 and the report read that “June PMI data from IHS Markit signaled the joint-fastest improvement in the health of the U.S. manufacturing sector on record.”
Saturday, July 03, 2021
Central Banks RAMPANT MONEY PRINTING INFLATION BIG PICTURE! US Trending Towards Hyperinflation / Economics / Inflation
By: Nadeem_Walayat
I know it can get a bit tiring to hear me bang on with the mantra of rampant money printing inflation, BUT one can tend to get lost in the detail i.e. looking at individual stocks and assets and forget the BIG PICTURE which really is one of RAMPANT MONEY PRINTING INFLATION!
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Tuesday, June 29, 2021
Demand-Driven Price Hikes Are Underway / Economics / Inflation
By: John_Mauldin
James Bianco, president of Bianco Research, thinks most of the near-term inflation he foresees will be demand-driven. The fact that a lot of people have a lot of spending money will push prices even higher.At Mauldin Economics' 2021 Strategic Investment Conference, he posed the question: Where did this cash come from? Check out this chart...
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Monday, June 21, 2021
Feel the Inflationary Heartbeat / Economics / Inflation
By: John_Mauldin
Not all inflation is created equal. Peter Boockvar, CIO at Bleakley Advisory Group, has his finger on the economy’s pulse. And for the last year or so, he’s felt an inflationary heartbeat.Peter, who is the author of The Boock Report, in which he flash-analyzes the latest economic data in handy bite-size multiple emails per day, makes an important distinction between goods inflation and services inflation.
At Mauldin Economics' 2021 Strategic Investment Conference in May, Peter explained that they have been behaving differently. Looking at services inflation (ex-energy) within the Consumer Price Index, he showed that it averaged around 2.8% in the 20-year period leading up to the pandemic.
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Wednesday, June 16, 2021
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! / Economics / Inflation
By: Nadeem_Walayat
I know it can get a bit tiring to hear me bang on with the mantra of rampant money printing inflation, BUT one can tend to get lost in the detail i.e. looking at individual stocks and assets and forget the BIG PICTURE which really is one of RAMPANT MONEY PRINTING INFLATION!
For instance the stimulus that all nations have implemented is far in excess of the temporary loss of GDP due to Covid i.e. the US suffered a 10% drop from peak to trough in GDP, about $2 trillion's worth but has printed $5 trillion in response to which is about 25% of GDP!
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Wednesday, June 16, 2021
The Federal Reserve and Inflation / Economics / Inflation
By: John_Handbury
The Federal Reserve a$$holes puckered up when the April CPI/PPI figures came in, and probably puckered up even more when the May figures came in. These Fed nerds (who never got the girl/guy in high school), are dictating the monetary policy for the world. They are providing immense stimulation to the economy, yet have decided that any inflation arising from it is “transitory”. These stimuli include the following major impacts on supply and demand of goods that can lead to inflation of prices:
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Tuesday, June 15, 2021
Transitory Inflation Debate / Economics / Inflation
By: Michael_Pento
Inflation is running white-hot right now, and the reason is clear. It is because the Treasury poured $6 trillion into the economy between March of 2020 to March of 2021. That amounts to nearly $50,000 per US family in the name of pandemic relief. According to David Stockman, the government's largess was equal to 7.5 times the $800 billion of economic growth lost due to the various lockdowns and restrictions—both self-imposed or mandated. This time around the money wasn't just sent to Wall Street, as it was in the wake of the Great Financial Crisis of 2008. Covid-19 was a perfect excuse to deploy Modern Monetary Theory (MMT) directly to state and local governments, consumers, and businesses as well.
In other words, the government didn't just re-liquefy the banking system and then maybe hope consumers would receive some of the monetary crumbs as an ancillary consequence. The various virus-related rescue packages circumvented banks and pushed funds directly to the mass population. Paying people to lay fallow while at the same time giving them money to actually increase their consumption habits is a perfect recipe for rapidly rising Consumer Price Inflation. However, such a feat cannot be duplicated anytime soon without destroying the US dollar and the full faith and credit in our sovereign bond market.
Wednesday, June 02, 2021
Biden’s Alternate Inflation Universe / Economics / Inflation
By: Gary_Tanashian
As Biden Speaks, remember the economy is run by the Fed and it is run by inflation
Of course, a career politician will be adept at framing the narrative just right, adding to it, tweaking it and layering on fancy words and concepts in order to veil the true and unbelievably simple fact that the inflation started under a very different presidential administration and continues to this day. The only difference is that the party that won the election gets to take a bow for the broad results that have little or nothing to do with them.
Biden goes on offensive against economic critics, argues rising wages show his agenda is working
Well, his agenda was to push rising employment costs into the economy with the inflation the Fed created out of thin air. So that is true. I am not against raising minimum wages under this vile inflationary system because low income people cannot keep up with the pace of the inflation the Fed has created. Under an inflationary regime, an inflationary (Keynesian) system, you can’t go with the old conservative method of letting each earn his or her way based on merit. At some point – due to inflation – the goalpost has been moved too far away.
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Monday, May 31, 2021
Fed Offers No Holiday from Inflation / Economics / Inflation
By: MoneyMetals
Heading into Memorial Day weekend, American motorists will see the highest prices at the pump since 2014, according to AAA. Gas prices now average $3.04 a gallon nationally – reflecting a jump of more than $1.00 compared to the same time last year.
A rising gasoline price is just one of many emerging symptoms of a larger inflation problem:
- A lack of housing inventory, low interest rates, and surging costs for building materials are pushing home prices through the roof.
- Billionaire Warren Buffett recently complained that he is seeing significant inflation pressures throughout the supply chains of businesses he owns.
- Beef is becoming increasingly unaffordable for many grocery shoppers, and rising food costs are forcing already beleaguered restaurants to hike menu prices.
Thursday, May 27, 2021
Are US Inflation Fears Destabilising the Global Markets? / Economics / Inflation
By: Sumeet_Manhas
The US dollar has enjoyed renewed highs of late, with this trend at least partially the result of forex positioning and a pronounced increase in net short positions as investors brace themselves for a depreciation in the value of the greenback.
However, this also betrays rising rates of US inflation, which recently peaked at 2.6% and pushed the dollar even higher against both the pound and the Euro.
But are rising inflation fears beginning to destabilise the global markets, and what does this tell us about the influence of inflation on stocks and shares throughout the world?
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Wednesday, May 26, 2021
Inflation Easing, Now What? / Economics / Inflation
By: Monica_Kingsley
S&P 500 refused to keep early gains, and reversed back into no man‘s land – on little convincing volume. For now, we remain chopping below my 4,180s level, conquering which on a closing basis would a bullish achievement. Until that happens on convincing internals, fake moves in both directions would remain with us.
The Fed telegraphing the talk about talking taper is a first step in preparing the markets not to get surprised by the actual deed, but how far is that one really? Stocks, bonds and currencies aren‘t reacting much – it‘s only commodities that are in consolidation mode, but this can be chalked down to inflation expectations calming down over the prior three trading days. Until the Fed truly moves or makes its forward guidance as unequivocal as can be in this respect, the markets would be in a doubting attitude (or at a minimum, a wait and see one):
(…) The market simply isn‘t convinced the Fed is serious about taking on inflation through (gradual) removal of the punch bowl – or about shaping its forward guidance credibly this way (yet). Inflation expectations are cooling down a little, and the Treasury market is tracking them closely. But this doesn‘t mean that bonds are taking the central bank seriously – this move is part and parcel of the transitory vs. getting (practically permanently unless a Fed game changer arrives – still unlikely) elevated inflation readings debate.
While I think that the red hot CPI inflation would die down a little (i.e. not keep rising ever as steeply as was the case with Wednesday‘s data) once the year on year base to compare it against normalizes, a permanently elevated plateau of high and rising inflation would be a reality for more than foreseeable future simply because the Fed would be as behind as Arthur Burns was in fighting the 1970s inflation, and upward price pressures in the job market pressures would kick in.
Friday, May 21, 2021
Inflation Bunker Mentality: 'Striking' Similarities Between Now and the Inflationary 1970s / Economics / Inflation
By: The_Gold_Report
Sector expert Michael Ballanger examines the parallels between the present and the inflationary years of the mid-1970s, and also comments on how gold markets are responding.
For many of those following the writings of this "dithering old fool," who continues to hold an unfailing conviction in the strategic importance of gold and silver ownership in an otherwise out-of-control fiscal and monetary world, let me tell you a story about the 1970s.
I arrived in Saint Louis, Missouri, in the late summer of 1972, at the start of a magical four-year career as a student athlete at one of the top undergraduate business schools in the country. Populated largely by Jesuit educators, it also had many non-Jesuit professors in the twilight of their business careers that bestowed impressive anecdotes upon the collective psyches of the student population. In fact, it was a wonderful, coffee-sipping, Camel non-filter-chain-smoking finance professor who stood in front of the class in old De Smet Hall one morning, tripping the light fantastic about the implications of Richard Nixon abandoning the gold standard the year before and how it was going to cause massive inflation.
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Sunday, May 16, 2021
Wall Street Roiled by Hot Inflation Data: Is This REALLY “Transitory”? / Stock-Markets / Inflation
By: MoneyMetals
The Labor Department reported yesterday that the Consumer Price Index jumped 4.2% from the prior year. Although a big rise in the CPI had been expected, the actual number came in even higher than economists had forecast.
According to the CPI data, inflation in April accelerated at its fastest pace in more than 12 years. Higher prices showed up everything from used cars to lumber to energy to food.
If April’s rate of price increases were to persist for another 11 months, the annual CPI growth rate would be 10.3%. And that wouldn’t even account for items that the CPI excludes or understates.
Jerome Powell and other Federal Reserve officials have repeatedly insisted than any rise in inflation this year will be “transitory.” They cite base effects from last year’s economic lockdown and supply bottlenecks they expect to be temporary.
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Thursday, May 13, 2021
Peak Growth and Inflation / Economics / Inflation
By: Michael_Pento
The rates of growth and inflation are now surging in the U.S., but that shouldn't be a surprise to anyone. What else would you expect when the Federal government has sent $6 trillion dollars in helicopter money to state and local governments, businesses, and individuals over the past year. Then, at the same time, millions of homeowners are told they don't have to pay their mortgages. In addition, our central bank has printed trillions of dollars to push asset prices through record-high valuations and continues to create $120 billion each month in order to keep Wall Street happy.All the above is happening while the economy opens up due to the dissemination of COVID-19 vaccines. The markets have anticipated this economic boom and have now nearly fully priced it all in. For instance, home prices have soared by 12% year over year in February, which was the fastest increase in the past seven years. And, the total market cap of equities is now over 200% of GDP—about twice the level reached at the start of the Great Recession.
But that rate of change in growth and inflation will be peaking in the next two months. I'll explain why that is and what that means for investors?
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Tuesday, April 20, 2021
Inflation: First the Gain, Then the Pain… / Economics / Inflation
By: MoneyMetals
Gold and silver markets are exhibiting more signs of breaking out into a rally.
On Thursday, bond yields pulled back sharply. That helped fuel a new record in the Dow Jones Industrials. But the precious metals sector was an outperformer on the day, with mining stocks leading gold prices to a fresh multi-week high.
With the exception of palladium, precious metals markets have lagged behind other asset classes in 2021. That may be in the process of changing here in the second quarter.
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Tuesday, April 13, 2021
Biggest Inflation Threat in 40 Years Looms over Markets / Economics / Inflation
By: MoneyMetals
William Watts with MarketWatch sees the “biggest Inflation scare in 40 years” on its way. He expects massive amounts of stimulus coupled with a boom associated with easing COVID restrictions to generate a surge in prices like the nation hasn’t seen since the late 1970s to early 1980s.
The signs say Watts may be right. Commodities, with the exception of closely managed gold and silver prices, have been screaming higher in recent months. Wheat, corn, lumber, copper, steel, and a host of other key inputs have all spiked higher.
The jump is already being felt in consumer goods and construction, but the bulk of the price hikes may still lie ahead.
Tuesday, April 06, 2021
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending / Economics / Inflation
By: MoneyMetals
Gold and silver markets sprung higher on Thursday as April and second quarter trading kicked off. After suffering losses in the first quarter, precious metals may now be due for a spring rally.
The U.S. Dollar Index was up slightly this week. Regardless of how the dollar fares against other fiat currencies, investors can expect massive depreciation ahead in real terms. There is no end in sight to the inflationary cycle of spending, borrowing, and printing in Washington.
This week, President Joe Biden promoted a so-called infrastructure package that comes in at more than $2 trillion. That’s on top of $1.9 trillion in bailouts and giveaways finalized last month.
Much of the proposed “infrastructure” spending has nothing to do with paving roads, building bridges, or expanding ports. These sorts of transportation upgrades are slated to only get $115 billion. Meanwhile, Biden would spend $174 billion on electric vehicle subsidies and hundreds of billions more on various “green” and racial leveling programs.
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Wednesday, March 31, 2021
INFLATION - Wage Slaves vs Gold Owners / Economics / Inflation
By: Richard_Mills
Inflation is the rate at which prices within a basket of goods or services (called the consumer price index or CPI) rise or fall. When a currency falls, the ability of that unit of money to purchase goods and services weakens, ie., it takes more units of currency to buy the same basket of goods as before it weakened. The more a currency falls, the less you can buy with it because its purchasing power decreases. We call this devaluation/ loss of purchasing power.
Casey Research founder Doug Casey believes we often put the cart before the horse when thinking about inflation. The renowned investor, author, and speaker states,
“Inflation” occurs when the creation of currency outruns the creation of real wealth it can bid for… It isn’t caused by price increases; rather, it causes price increases.
Inflation is not caused by the butcher, the baker, or the auto maker, although they usually get blamed. Inflation is the work of government alone since government alone controls the creation of currency.
Indeed, governments in fiat economies can literally print paper money “out of thin air,” something impossible to do with a gold-backed currency. When the United States and most of the world was on the gold standard, dollars could be converted to gold at the US Treasury’s “gold window” @ 1 oz=US$35. However, the US government was only allowed to create as much money as could be backed by the gold in its faults. (it is often said, “the Fed can’t print gold” (or silver).
When gold goes up or down it is not inherently losing value; what has changed is the value of paper money, the fiat dollar. When you buy gold to resist inflation, ie., rising prices that eat away your savings by reducing your purchasing power, it is called a hedge against inflation.
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Sunday, March 07, 2021
The Case for Inflation / Economics / Inflation
By: John_Mauldin
Former Treasury Secretary Larry Summers recently pointed out that overstimulation risk will far exceed the “output gap” shown in the latest Congressional Budget Office economic projections.
What is an output gap? Gross Domestic Product measures (or at least tries to) economic growth. Economists also calculate “potential GDP,” which is how much the economy could grow, if every available worker and other resource were fully employed.
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Thursday, March 04, 2021
Get Ready for Inflation Mega-trend to Surge 2021 / Economics / Inflation
By: Nadeem_Walayat
So the US looks set to approve stimulus spending of $1,9 trillion for the US economy during 2021, with economists singing it's praises of how basically you get a free lunch, one of huge deficit spending at zero interest rate and no inflation. Understand $1.9 trillion is 10% of the US Economy! This for an economy that has already recovered from the covid depression and was destined to grow by about 3% in 2021. So what happens when one throws 10% of GDP at an economy that is growing by 3% per annum. No you don't get GDP growth of 13% per annum, yes it will boost US GDP for 2021 but not by 10%, perhaps by another 3%, so where does the other 7% or $1.5 trillion go? Into HIGHER PRICES, INFLATION! Some of which may be reflected in the official inflation indices.
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Wednesday, March 03, 2021
The Case Against Inflation / Economics / Inflation
By: John_Mauldin
For inflation to be a near-term threat, five things would have to happen this year:
- Vaccines and other measures bring the pandemic under control this summer in the US and other developed countries.
- Consumers use relief dollars, savings, and/or borrowing to quickly increase their spending on discretionary goods and services.
- This spending is large enough to exceed post-pandemic production capacity and spark price increases.
- The Federal Reserve lets the economy “run hot” and maintains its low interest rates and asset purchases.
- Congress and the Biden administration leave the fiscal spigots open by not raising taxes or cutting spending.
All these are possible. Are they likely?
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Tuesday, February 16, 2021
THE INFLATION MEGA-TREND QE4EVER! / Economics / Inflation
By: Nadeem_Walayat
US House Prices Real Estate Trend Forecast Review
Did the perma bears finally get their US house prices crash that they have been crowing so loudly for a decade now?
Firstly a recap of my existing US house prices trend forecast.
30th April 2019 - US House Prices Trend Forecast 2019 to 2021
Therefore my forecast conclusion is for a relatively weak continuation of the US housing bull market into late 2020 at a much shallower pace than experienced in recent years for a likely gain of just 3% over the next 2 years (Jan 2019 to Jan 2021) before entering into a downtrend going into 2021 i.e. Case Shiller 10 city Index (SPCS10RNSA ) rising from 225.9 (Jan 2019 data) to just 232.4 (Jan 2021 data) as illustrated by my trend forecast graph.
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Friday, February 12, 2021
UK Real Inflation is 15% to 20% - Grocery Price Rises Due to Rampant Money Printing / Economics / Inflation
By: Nadeem_Walayat
The Government and Bank of England would have you believe that Inflation is not a problem as they continue to focus the masses on their fake conjured out of thin air inflation indices such as CPI at just 1.4%, so as to allow the theft of real purchasing power to continue unabated as the government goes on an annual £400 billion spending spree, racking up debt that the Bank of England is busy monetization though QE, all so as to suppress real interest rates giving the illusion that the consumers are getting a free lunch, i.e. rampant government money printing deficit spending all without any inflationary consequences that the morons in the mainstream financial press are more than happy to regurgitate. However REAL inflation, that which people experience when they do their weekly shops is far higher than the fake 1.4%, REAL Inflation is at LEAST 15% and more like 20% as that is what happens when the Government starts paying 1/3rd of the workforce to stay at home, as has been the case for most of 2020 and continuing into 2021.
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Tuesday, January 05, 2021
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB / Economics / Inflation
By: Kelsey_Williams
As of November 30th, the annual inflation rate for the year 2020 is 1.17% (CPI). And it is not likely to get a whole lot worse anytime soon.
When the Federal Reserve responded to the financial crisis of 2007-08 with hugely unprecedented monetary expansion efforts, many thought that it would lead to runaway inflation and collapse of the U.S. dollar. It didn’t; and the expected higher inflation rates did not occur.
What did happen is that consumer prices remained reasonably stable and we even saw lower prices in 2009 and 2015.
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Thursday, December 24, 2020
US Fed Recommits to Misleading the Public About Inflation / Economics / Inflation
By: MoneyMetals
Did the Federal Reserve just usher in the next phase of the U.S. dollar’s decline?
On Wednesday, the central bank recommitted to leaving its benchmark interest rate near zero for the foreseeable future.
Fed officials also vowed to keep pumping cash into financial markets.
Following Fed chairman Jerome Powell’s remarks, the wavering U.S. Dollar Index turned down – hitting a fresh new low for the year. Gold gained modestly on the day while silver got a bigger boost to close solidly above $25/oz, promptly heading to $26/oz the day following.
Precious metals markets have been basing out over the past several weeks. They are struggling to attract safe-haven demand amid record runs in stocks and Bitcoin.
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Tuesday, September 15, 2020
Billionaire Hedge Fund Manager Warns of 10% Inflation / Economics / Inflation
By: MoneyMetals
Over the past month, gold has traded in a range with support around $1,900. Bulls have made a couple unsuccessful attempts to retake and hold above the $2,000 level following the sharp plunge below it on August 11th.
But we are likely to see a more decisive move in the gold market one way or the other in the days ahead.
The near-term outlook for precious metals markets may be determined by where the U.S. Dollar Index heads next. It has been basing out since August after trending lower earlier in the summer.
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Friday, September 11, 2020
The Inflation Mega-trend is Going Hyper! / Economics / Inflation
By: Nadeem_Walayat
QE4EVER!
Virtually everything that cannot be easily printed is rocketing higher which includes GOLD! It's not hard to see why as a consequence of rampant money printing by governments across the world in the wake of the Coronavirus Pandemic economic depression. For instance the UK alone looks set to print about £550 billion this year most of which will be monetized by the Bank of England so that the government can pay the wages of about 1/3rd of Britains workforce for a good 6 months with likely many more economic stimulus measures to follow over the next 6 months towards fighting the Pandemics dire economic consequences.
Whilst the United States has printed $2.2 trillion of stimulus dollars to date with at least another $1.3 trillion to come, that's $3.5 trillion which dwarfs the 2008 financial crisis bailout of $720 billion. Funneling stimulus checks on an epic scale into the back pockets of every working age citizen. Printing money has REAL consequences which is REAL inflation hence what we have been witnessing in markets across the spectrum, and whist I have yet to take a peak at the housing markets, I would not be surprised if the UK housing market at least will start to experience a money printing inflationary boom over the coming year, this despite the fact that people have less disposable income to buy housing, but more on that in a future article.
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Thursday, September 10, 2020
Inflation by Fiat / Economics / Inflation
By: Michael_Pento
The Fed has now officially changed its inflation target from 2%, to one that averages above 2% in order to compensate for the years where inflation was below its target. First off, the Fed has a horrific track record with meeting its first and primary mandate of stable prices. Then, in the wake of the Great Recession, it redefined stable prices as 2% inflation—even though that means the dollar’s purchasing power gets cut in half in 36 years. Now, following his latest Jackson Hole speech, Chair Powell has adopted a new definition of stable prices; one where its new mandate will be to bring inflation above 2% with the same degree and duration in which it has fallen short of its 2% target.Just to be clear, the Fed has no idea what causes inflation. It also deliberately goes way out of its way to under measure it. Is it any wonder then that the Fed's historical record proves it has little ability to meet its own inflation target? As I explained in a commentary written a couple of month ago, the Fed has a tremendous amount of difficulty controlling inflation in either direction. In 7 out of the last 12 years, the Fed has been unable to achieve average annualized CPI of at least 2%. Therefore, 58% of the time the Fed has failed to reach its minimum inflation goal. Conversely, inflation spiked to double digits by 1975 and, after a brief pause in ’76-’77, eventually soared to 14.6% by early 1980. During this process, our central bank found it necessary to raise rates from 3.75% in February 1971, all the way to 20% by the middle of 1980. That doesn’t sound like inflation is easily managed does it? But the Fed is fond of trying to convince investors that is the case.
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Sunday, August 23, 2020
CPI Goes Up in July. Will Inflation Dragon Take to the Air with Gold? / Economics / Inflation
By: Arkadiusz_Sieron
CPI rises again in July. But will the inflation dragon take to the air, taking gold with it?The U.S. CPI inflation rate rose 0.6 percent in July, for the second month in a row. The move was driven to a large extent by higher energy prices (the energy index increased 5.1 percent in June as the gasoline index rose 12.3 percent). The core CPI rose also 0.6 percent, following a 0.1 percent drop in May. It was the biggest monthly increase in the core rate since 1991.
On an annual basis, the overall CPI increased 1 percent (seasonally adjusted), following 0.7 percent increase in June. Meanwhile, the core CPI rose 1.6 percent, which implies the acceleration from 1.2 percent recorded in the previous month. So, as the chart below shows, inflation remains low, but it is no longer very low.
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Monday, August 10, 2020
Has the Fed Let the Inflation Genie Out of the Bottle? / Economics / Inflation
By: MoneyMetals
The dramatic ascent of precious metals markets this summer reflects what could be just the start of a longer-term decline and fall in the Federal Reserve Note's value and status.
With gold prices surpassing $2,000/oz recently, the monetary metal has now made new all-time highs versus all the world’s major fiat currencies. Gold is, as former Federal Reserve chairman Alan Greenspan has acknowledged, the “ultimate money.”
The Fed, by contrast, is the ultimate inflator.
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Monday, August 10, 2020
Supply & Demand For Money – The End of Inflation? / Economics / Inflation
By: Kelsey_Williams
A current headline says “fears of currency debasement drive gold price higher”. Seems reasonable; and it is.
Historically, governments have been “debasing” their currencies for centuries. The debasement leads to a loss of purchasing power in the currency in use.
Since gold is original money and has proven itself to be a true store of value, then it should not be unexpected that gold’s higher price over time reflects that currency debasement.
The debasement leads to a loss of purchasing power in the currency in use.
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Wednesday, June 10, 2020
Inflation ‘A mirror image of the early 1980s’ / Economics / Inflation
By: Michael_J_Kosares
“To propose a return of inflation is to be inflammatory,” writes Lightman Investment Management’s Rob Burnett in an opinion piece for the Financial Times. “Investors are committed to a deflationary thesis — and such is their fervor that many believe inflation cannot return in any circumstance. Yet if we look beyond today’s demand shock from the Covid-19 crisis, the forces driving the disinflation of the past 40 years appear to be in retreat. … [T]oday appears like a mirror image of the early 1980s. We have moved from inflation peak to deflation trough.”
Evidence is beginning to mount that the new paradigm Burnett describes – moving from disinflation to inflation – might not be too far off the mark. During the financial crisis that began in 2008, the Fed sterilized its money creation by routing money back to its coffers in the form of commercial bank excess reserves – a strategy that kept the inflation rate from running out of control. As you can see in the first chart, the current level of sterilization, at least in the short term, is greater than what occurred in the 2008-2014 period. At the same time, as you can see in the second chart, the rapid growth in the money supply this time around goes beyond anything that occurred during the prior crisis. Whether or not Burnett is correct and the growth in the money supply translates to price inflation down the road remains to be seen. (Please take note that the growth in the money supply began roughly a year ago – well before the onslaught of the coronavirus pandemic.)
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Tuesday, April 21, 2020
Bending the Inflation Curve / Economics / Inflation
By: John_Mauldin
Our responses to the coronavirus threat, necessary though they may be, are creating massive supply and demand shocks, the rapidity of which is like nothing seen in centuries, if ever.
The Federal Reserve and other central banks are doing unprecedented things. Some think inflation will be the result. While that may happen eventually, I believe we will first go through the most massive deflationary shock of all time.
Milton Friedman famously said, “… inflation is always and everywhere a monetary phenomenon.” During the timeframe in which he and his colleague Anna Schwartz did their famous study, there was clearly a correlation between money supply and inflation. What is not often noted is that the velocity of money (i.e., the rate at which money changes hands) was stable during that time.
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Friday, March 27, 2020
What you need to know about the impact of inflation / Economics / Inflation
By: Submissions
When it comes to investment risks, one that investors seem to overlook is the risk that their money may not be able to grow enough to keep up with inflation. It can play a significant role in the protection of an investment and therefore, should be taken into account when evaluating the potential success of an investment.
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Monday, December 23, 2019
The Fed Celebrates While Americans Drown in Financial Despair / Economics / Inflation
By: John_Mauldin
The Federal Reserve System is supposed to be independent. But it’s not. And as much as Donald Trump doesn’t like it, the Fed shouldn’t follow the president’s orders.
The Fed operates under a legal mandate from Congress. Its monetary policy role is “to promote maximum employment, stable prices and moderate long-term interest rates.”
So how is it doing?
Long-term rates are certainly moderate. Employment is historically high, though wages and job quality aren’t always great.
As for that “stable prices” part… it depends on what you are buying.
Thursday, December 19, 2019
US Fed Wooing Inflation / Economics / Inflation
By: Gary_Tanashian
The Continuum (the systematic downtrend in long-term Treasury yields) has for decades given the Fed the green light on inflation. Sometimes it runs hot (as per the red arrows) and sometimes it runs cold. One year ago people were confused about why a declining stock market was not influencing Fed chief Powell to reverse his relatively hawkish tone.
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Wednesday, December 18, 2019
Inflation Threat Looms in 2020 as Fiscal and Monetary Stimulus Ramp Up / Economics / Inflation
By: MoneyMetals
The Federal Reserve left its benchmark interest rate unchanged as expected last week. However, Fed Chairman Jerome Powell made news with some of his most dovish remarks to date – stating flatly that he won’t hike rates again until inflation moves up significantly.
“In order to move rates up, I would want to see inflation that’s persistent and that’s significant,” Powell said at a news conference following the Fed’s announcement.
He would be anticipating “a significant move up in inflation that’s also persistent before raising rates to address inflation concerns.”
Tuesday, November 05, 2019
Time for Investors to Reset Their Portfolios for Inflation / Stock-Markets / Inflation
By: MoneyMetals
As investors reset their clocks to accord with the end of Daylight Savings Time, they may also need to reset their expectations for future returns.
A strong body of research suggests that artificially changing the time twice a year – forward, then backward an hour – does more harm than good. It leads to sleep disruptions, heightened stress, missed appointments, wasted time (ironically), and a diminishment of productivity around these biannual time changes.
As reported in HeadlineHealth, “Circadian biologists believe ill health effects from daylight saving time result from a mismatch among the sun ‘clock,’ our social clock – work and school schedules – and the body’s internal 24-hour body clock.”
Wednesday, October 30, 2019
2 %: A Magic Number or an Obsession? / Economics / Inflation
By: Submissions
Arf Badeckandy writes: Inflation Targeting (IT) was first adopted in New Zealand in 1990 with a primary goal of price stability. They were going through years of high inflation and slow growth. Initially, they set a target of between 0 to 2 percent. In 1991, the Inflation rate was down to 2.60% from 6.10%. Although there is a cost of disinflation and the Real GDP fell, it recovered. As of August 2019, there are about 71 Central Banks which has adopted an IT Monetary Policy. It can be seen that the authorities are most likely to adopt this policy when their inflation rate is high – to bring it down. Argentina adopted IT in 2016 while the inflation rate was 35.5%, Uganda in 2011 with an inflation rate between 16%-17 %.
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Monday, September 23, 2019
Zimbabwe's New Currency Collapses and Inflation Surges / Economics / Inflation
By: Steve_H_Hanke
The most important price in an economy is the exchange rate between the local currency and the world’s reserve currency — the U.S. dollar. As long as there is an active black‐market (read: free market) for currency and the data are available, changes in the black‐market exchange rate can be reliably transformed into accurate estimates of countrywide inflation rates—if the annual inflation rates exceed 25%. The economic principle of Purchasing Power Parity (PPP) allows for this transformation.
I compute the implied annual inflation rates with high‐frequency data and report them on a daily basis. PPP is used to translate changes in the black‐market exchange rates into annual inflation rates. For the countries that I follow each day, the table below shows the annual rates for the six countries with the highest inflation rates.
Monday, July 01, 2019
Zimbabwe's Inflation is Still Surging / Economics / Inflation
By: Steve_H_Hanke
The most important price in an economy is the exchange rate between the local currency and the world’s reserve currency — the U.S. dollar. As long as there is an active black‐market (read: free market) for currency and the data are available, changes in the black‐market exchange rate can be reliably transformed into accurate estimates of countrywide inflation rates—if the annual inflation rates exceed 25%. The economic principle of Purchasing Power Parity (PPP) allows for this transformation.
I compute the implied annual inflation rates with high‐frequency data and report them on a daily basis. PPP is used to translate changes in the black‐market exchange rates into annual inflation rates. For the countries that I follow each day, the table below shows the annual rates for the five countries with the highest inflation rates.
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Wednesday, June 12, 2019
Perfect Storm Brewing for Price Inflation / Commodities / Inflation
By: MoneyMetals
A “perfect storm” is brewing for midwestern farmers. Unending rains have led to the flooding of tens of millions of acres of farmland. The deluge comes on the heels of years of low crop prices.
It has the makings of an agriculture disaster on a scale never seen before.
The nation may see a “perfect storm” in terms of food inflation. Prices for some farm commodities figure to be a lot higher in the months ahead as markets adjust to dramatically lower crop yields. This will be coupled with price hikes associated with tariffs on all manner of goods from China and elsewhere.
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Wednesday, June 05, 2019
US Inflation and House Prices Trend Forecast / Economics / Inflation
By: Nadeem_Walayat
Official US CPI inflation remains marginally below the Fed's 2% target at 1.9%. Generally where house prices are concerned the higher the inflation rate the better as long as the economy is growing. Nothing much screams out from this chart other than at 2% inflation on balance is supportive of house prices.
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Tuesday, May 14, 2019
Breaking Down Today’s Inflation / Economics / Inflation
By: Rodney_Johnson
I recently had dinner with my extended family. Afterwards, my parents mentioned they were surprised at how expensive the meal had been. It was a nice restaurant, but nothing fancy. It worked out to roughly $50 apiece, before tip. As we left, we separately climbed into our newish cars, which all cost more than $40,000. My brother-in-law’s pickup tops out over $50,000.But don’t worry, the government tells us, there’s not much inflation.
We could have chosen a cheaper restaurant, and less expensive cars, which is exactly the point the government tries to make…
The government wants us accustomed to the chained consumer price index (CPI), where prices move higher and we’re chained to a falling standard of living.
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Thursday, March 28, 2019
Fed Inflation Is Losing Its Intended Effect / Economics / Inflation
By: Kelsey_Williams
The chart below shows the ratio of the gold price to the monetary base for the past one hundred years. The monetary base used in the chart is calculated by the St. Louis Federal Reserve and the following definition is from their website:
“The Adjusted Monetary Base is the sum of currency (including coin) in circulation outside Federal Reserve Banks and the U.S. Treasury, plus deposits held by depository institutions at Federal Reserve Banks. These data are adjusted for the effects of changes in statutory reserve requirements on the quantity of base money held by depositories.” (source)
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Wednesday, March 20, 2019
Monetary Metals on Keynes, Inflation and Evil Itself / Economics / Inflation
By: Gary_Tanashian
Since NFTRH 543 was also known as the ‘What if… Inflation?’ report, I was attuned to the subject; and on cue here comes Keith Weiner with a knockout punch.
Keynes Was a Vicious Bastard, Report
He goes off on the evil (and I do mean evil) genius, John Maynard Keynes before moving on to his usual gold and silver supply/demand fundamental report.
Read full article... Read full article...He gave us the recipe for “overturning the existing basis of society.” All you have to do is “a continuing process of inflation,” which will “confiscate, secretly and unobserved, an important part of the wealth of their citizens.” This “brings windfalls, beyond their deserts and even beyond their expectations or desires” to the “profiteers, who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat.” Finally, this process “engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
Wednesday, October 31, 2018
How Government Causes Inflation / Economics / Inflation
By: Kelsey_Williams
We know that inflation is the debasement of money by government. The effects of inflation show up in the form of rising prices over time. The rising prices are a reflection of the loss of purchasing power of the currency involved. For our purposes, that means the U.S. dollar.
The chart below depicts increases in the Consumer Price Index, year-to-year, dating back to 1914…
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Thursday, October 11, 2018
Forget What Phony Government Statistics Say – the "Strong Dollar" Buys Less / Economics / Inflation
By: Dan_Steinbock
Some of last week’s weakness in the stock market was attributed to surprisingly week jobs report on Friday. Non-farm payrolls came in significantly below projections.
However, much of that weakness was explained by Hurricane Florence. nd the headline unemployment rate dropped to 3.7% – the lowest in almost 50 years.
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Thursday, October 11, 2018
“A Loaf Of Bread, A Gallon Of Gas, An Ounce Of Gold” Revisited / Currencies / Inflation
By: Kelsey_Williams
One of the earliest articles I wrote was “A Loaf Of Bread, A Gallon Of Gas, An Ounce Of Gold”. The information contained in the article is basic to a fundamental and accurate understanding of gold.
The convolution and complication of basic fundamentals reigns supreme in almost all analysis of gold. That is unfortunate, because it obscures the simple truth.
The simple truth is that gold is real money. Even that simple truth, however, deserves some further explanation.
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Tuesday, October 09, 2018
Inflation Target Regrets / Economics / Inflation
By: Michael_Pento
Beginning this fall, and continuing throughout 2019, the stock market’s performance should be vastly different from what has occurred during the prior few years. Indeed, the huge reconciliation of stock prices is arriving now.
The primary reason behind this is the watershed change in global central banks’ monetary policies. For years central banks had been keeping rates near 0%, or below, and at the same time printing over a hundred billion dollars’ worth of fiat currencies each and every month to purchase bonds and stocks. That is all changing now. According to Capital Economics, fourteen major global central banks are either in the process right now, or have indicated that they be will next year, in the process of raising interest rates. At the same time, QE on a global net basis will plunge from $180 billion per month at its peak during 2017, to $0 by December…and will then go negative in 2019.
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Tuesday, October 09, 2018
ECB Meeting Minutes and US Inflation Data in Focus / Economics / Inflation
By: Submissions
We don’t have a central bank meeting scheduled for this week, but we get the minutes of the latest ECB one. Following the upbeat remarks of President Draghi at the conference following that meeting, it will be interesting to see whether other ECB officials are on the same page. In the US, we have the CPIs for September. We get inflation data from Norway and Sweden as well.
Monday appears to be a quiet day in terms of economic releases. The only noteworthy data point we have on the calendar is German industrial production for August, which is expected to have rebounded 0.4% mom after sliding 1.1% in July.
On Tuesday, during the Asian morning, we get Australia’s NAB business survey for September. Although this is usually not a market mover, given the RBA’s emphasis on wage growth, we will take a close look at the Labour Costs sub-index. At its last two meetings, the Bank reiterated that wage growth remains low, but removed the part saying that this is likely to continue. Instead, officials noted that it has picked up a little and that further lift is expected. The NAB Labour Costs index accelerated to +1.3% qoq in the three months to August, from 0.9% in the three months to July and it would be interesting to see whether this improvement will continue as the RBA has suggested.
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Tuesday, August 14, 2018
Anatomy of Hyperinflation / Economics / Inflation
By: Michael_Pento
Two drones filled with explosives were recently deployed in a failed assassination attempt to take out Venezuelan President Nicolas Maduro. Chaos filled the streets as the military ran for their lives. But this sort of pandemonium is commonplace in Venezuela today: Where citizens have run out of basic necessities such as toilet paper and have begun eating their pets in order to stay alive. The mainstream Keynesian-brainwashed media doesn’t talk much about Venezuela or hyperinflation; perhaps because they are viscerally aware that the seeds of intractable inflation on a worldwide basis have already been sown by the global elites--and they don’t want to frighten you.
Venezuela is currently in the throes of hyperinflation on a massive scale. The communist-led government has mismanaged its economy into a fiscal catastrophe. Among other things, skilled farmers were thrown off their land and replaced by government apparatchiks that are untrained and incapable of producing enough food to feed the people. Oil production also waned due to mismanagement and corruption. To smooth over the government’s mounting debt it printed massive amounts of money in response to rising budget deficits. The currency plummeted, and foreign denominated debts were defaulted on.
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Sunday, August 05, 2018
IMF Produces Another Bogus Venezuela Inflation Forecast / Economics / Inflation
By: Steve_H_Hanke
The International Monetary Fund (IMF) has done it again. In an attempt to garner some press, the head of the IMF’s Western Hemisphere Department Alejandro Werner forecasted that Venezuela’s annual inflation rate will reach 1,000,000% by year’s end. By my calculations, this inflation forecast implies that the exchange rate will reach 923 million VEF/USD by December 2018. To put this into context, the exchange rate at the end of July was 3.3 million VEF/USD, and at the end of June it was 3.1 million VEF/USD.
Thursday, August 02, 2018
Are You Ready For Inflation? / Economics / Inflation
By: Graham_Summers
The market is sensing a major turn.
As I’ve noted before, the currency markets are the largest, most liquid markets on the planet. As such they sense changes first.
With that in mind, consider that the “inflation” currencies are showing a major turn in the $USD.
First and foremost, the Australian Dollar: $USD pair looks to have bottomed. We have a clear bullish falling wedge formation being broken to the upside. We should expect a retest of former support (red line) at the very least.
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Wednesday, June 13, 2018
The $USD Thinks the Fed Will Choose Inflation / Economics / Inflation
By: Graham_Summers
The Fed meets today, and whatever happens will be a BIG “tell” for the rest of the year.
On the one hand, inflation is clearly seeping fully into the financial system. Even the ridiculously massaged CPI measure of inflation shows it is close to 3%.
This would suggest the Fed would move aggressively to hike rates to curb inflation.
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Monday, June 11, 2018
Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts / Stock-Markets / Inflation
By: MoneyMetals
Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Coming up Michael Pento of Pento Portfolio Strategies joins me examine what’s happening beneath the surface in the markets right now, and why we should all be very leery of putting too much stock into what we’re hearing from the mainstream financial media these days regarding the economy. Don’t miss another sensational interview with Michael Pento, coming up after this week’s market update.
Gold prices see-sawed around the $1,300 level this week as silver prices advanced to 7-week highs. As of this Friday recording, gold trades at $1,298 an ounce, up 0.2% for the week. Silver prices come in at $16.75, good for a 1.8% weekly gain.
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Thursday, June 07, 2018
The US Dollar Has Already Figured Out That Inflation is Coming / Economics / Inflation
By: Graham_Summers
The Fed has gone dovish. In fact, it’s going to allow inflation to explode higher.
That, in of itself, is significant… to understand why, we first need to acknowledge how the Fed currently operates to control risk in the financial system.
The Fed currently has two primary tools for controlling the financial system. They are:
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Wednesday, June 06, 2018
How Savvy Investors Do (and Don’t) Hedge against Inflation / Stock-Markets / Inflation
By: MoneyMetals
Inflation is a corrosive force that gradually – and sometimes rapidly – eats away at the nominal value of savings and investments.
It is perhaps the biggest threat looming on the horizon for millions of retirees who have been steered into assets marketed as “conservative” – such as dollar-denominated money market accounts, bonds, and annuities.
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Saturday, June 02, 2018
Buckle Up Deflationists… You’re Getting Taken to the Cleaners / Economics / Inflation
By: Graham_Summers
The current view trending in social media as well as most of the financial media is that Italy is about to trigger a systemic collapse of Europe.
Those proposing this theory are using charts of Italy’s bond yields and stock market that focus on the last few years when the country was being priced at a ridiculously low risk.
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Wednesday, May 30, 2018
Debilitating Inflation Is Like an Army of Termites Eating Away Your House / Economics / Inflation
By: MoneyMetals
Mike Gleason: It is my privilege now to welcome back David Smith, Senior Analyst at The Morgan Report, and regular contributor to MoneyMetals.com.
David, thanks for joining us again, how are you?
David Smith: You bet, Mike. It's great to speak with you again.
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Wednesday, May 09, 2018
Coming Inflationary Storm Is Entirely Due to Central Banks / Economics / Inflation
By: Graham_Summers
We’ve received a number of emails asking us how inflation is on the rise while the Fed is technically “tightening.”
The answer is that while the Fed is technically tightening, other Central Banks, particularly the Bank of Japan (BoJ) and European Central Bank (ECB) have been printing their currencies by the hundreds of billions.
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Thursday, May 03, 2018
Fed FOMC Update: Stagflation on the Horizon / Economics / Inflation
By: Graham_Summers
The Fed is fast approaching its worst nightmare.
Stag-flation.
Stagflation is when inflation is rising at the same time that the economy is weakening, if not contracting.
The Fed has always argued that low levels of inflation (2%) were acceptable provided the economy was also growing. Indeed, this is the very gimmick the Fed has utilized to mask the fact that quality of life has been falling in the US since the early ‘70s (by understating inflation, the Fed has overstated economic/ income growth).
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Wednesday, May 02, 2018
Two Charts That Argue Inflation, NOT Deflation, is Now the Dominant Trend / Economics / Inflation
By: Graham_Summers
The markets are moving into their first MAJOR inflationary shift in TEN years.
Perhaps the single best metric for measuring inflation vs. deflation in the bond markets is the TIPs to Long US Treasury ratio. In its simplest rendering when this ratio rises, it means inflation is on the rise. When it falls it means deflation is dominating the bond markets.
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Monday, April 23, 2018
Inflation, With a Shelf Life / Economics / Inflation
By: Gary_Tanashian
For the last few weeks we’ve used the conditions noted in the graphic below as a guide. Well, the ‘inflation trade’ (IT) popped last week and that included cyclical metals (as well as silver) ramming upward vs. gold and TIP rising vs. TLT & IEF.
As for credit conditions, there is little imminently raising caution flags as commercial lending and risk taking (as indicated by high yield junk bonds) continue apace, but the note still stands on the bigger picture as the credit system and money supply are gumming up with the Fed in quantitative and Fed Funds tightening mode while the velocity of money in the economy maintains a secular downtrend.
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Tuesday, April 17, 2018
Inflation Is Not Our Biggest Threat / Economics / Inflation
By: Kelsey_Williams
You wouldn’t know that by listening to current commentary on the economy.
There is a bigger threat, though. But first, there is some clarification about inflation that is necessary.
Most people infer rising prices when they hear the term inflation. That is not correct. The rising prices are the ‘effects’ of inflation. The inflation, itself, has already been created.
It is notcreated, or caused, by companies raising prices. And it is not created by ‘escalating wage demand’.
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Tuesday, March 20, 2018
Here’s What Inflation Could Look Like in 2020, Based on Past Surges / Economics / Inflation
By: GoldSilver
Jeff Clark, Rising inflation has hit the headlines, sparking some attention from journalists. What most mainstream investors don’t realize, though, is that history shows inflation can quickly get out of control, and not just in some mismanaged third-world country. Surprise spikes in inflation have occurred right here in the US—and given the massive amount of currency dilution around the world over the past decade, a jump in inflation could easily kick in again.
Saturday, March 17, 2018
Forget the CPI, Inflation is Here. And the Markets Know It / Stock-Markets / Inflation
By: Graham_Summers
The attempts to mask inflation are reaching truly ludicrous proportions.
Bloomberg reports that the “guts of the US CPI show key inflation weakest in years.”
What are the “guts?”
Housing rents… which the CPI claims are falling.
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Thursday, March 15, 2018
This Isn’t Your Grandfather’s (1960s) Inflation Scare / Economics / Inflation
By: F_F_Wiley
“This reminds me of the late 1960s when we experimented with low rates and fiscal stimulus to keep the economy at full employment and fund the Vietnam War. Today we don’t have a recession, let alone a war. We are setting the stage for accelerating inflation, just as we did in the late ‘60s.”—Paul Tudor Jones
As soon as the GOP followed its long-promised tax cuts with damn-the-deficit spending increases (who cares about the kids, right?), you knew to be ready for the Lyndon B. Johnson reminders.
And it’s worth remembering that LBJ pushed federal spending higher, pushed his central bank chairman against the wall (figuratively and, by several accounts, also literally) and eventually pushed inflation to post–Korean War highs.
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Sunday, March 11, 2018
An Inflation Indicator to Watch, Part 3 / Economics / Inflation
By: F_F_Wiley
—Ben Bernanke
Ben Bernanke began his oft-cited “helicopter speech” in 2002 with a few kind words about his peers, including the excerpt above. Speaking for central bankers, he took a large share of the credit for the low inflation of the 1980s and 1990s. Central bankers had gained a “heightened understanding” of inflation, he said, and he expected the future to bring even more inflation-taming success.
Of course, Bernanke’s cohorts took a few knocks in the boom–bust cycle that followed his speech, but their reputations as masters of inflation (and deflation) only grew. Today, the picture he painted seems even more firmly planted in the public mind than it was in 2002, notwithstanding recent data showing inflation creeping higher.
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Thursday, March 08, 2018
China Is Leading a Once-in-a-Generation Shift to Inflation / Economics / Inflation
By: John_Mauldin
By Patrick Watson : At the Strategic Investment Conference 2018, Louis Gave, co-founder and CEO of Gavekal Research, talked about “game-changing policy shifts” and massive social changes that are underway in China.
One of the most notable changes is Xi Jinping’s effort to pull the Chinese economy away from pollution-heavy industries. Cement, steel, and textile industries are under pressure—they are forced to cut back production and reduce supply.
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Monday, February 26, 2018
An Inflation Indicator to Watch, Part 2 / Economics / Inflation
By: F_F_Wiley
But does it really?
In Part 1 of this series, I said I would challenge popular beliefs about inflation, while at the same time proposing an alternative theory. I also promised that the theory leads to an inflation indicator with an excellent prediction record, and I’ll define the indicator in this article. Considering inflation determines bull and bear markets in both stocks and bonds, that’s my big pitch.
But first, here’s a recap.
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Wednesday, February 21, 2018
5 Big Drivers of Higher Inflation Rates Ahead / Economics / Inflation
By: MoneyMetals
Investors got lulled into a state of inflation complacency. Persistently low official inflation rates in recent years depressed bond yields along with risk premiums on all financial assets.
That’s changing in 2018. Five drivers of higher inflation rates are now starting to kick in.
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Sunday, February 18, 2018
An Inflation Indicator to Watch, Part 1 / Economics / Inflation
By: F_F_Wiley
Have you ever questioned Milton Friedman’s famous claim about inflation?
Ever heard anyone else question it?
Unless you read obscure stuff written for the academic community, you’re probably not used to Friedman’s quote being challenged. And that’s despite a lousy forecasting record by economists who bought into his Monetarist methods.
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Tuesday, January 23, 2018
Inflation Tsunami Ahead / Economics / Inflation
By: Michael_Pento
Inflation is one of the most misunderstood, misused and lied about topics in economics. The Fed professes to know what causes it: an overly employed workforce. But, perhaps it is aware this is false and intentionally promulgates the ruse of growth as inflation’s progenitor because central banks want to deflect attention away from its money printing. Nevertheless, one thing is abundantly clear, we all have to agree that the Fed can’t readily control the exact rate of inflation; nor can it direct what the repositories will be for its quantitative counterfeiting misadventures.
Saturday, December 30, 2017
Critical Impact Of US Medicare Premiums On Social Security Inflation Indexing / Politics / Inflation
By: Dan_Amerman
Medicare premiums are already eating Social Security inflation indexing from the inside, there have been effectively no real increases in net Social Security benefits for those 65 and over in recent years. And we are just getting started.
Experts agree that the Medicare program has far worse expected financial problems than Social Security over the long term. What is little understood, however, is that Medicare premiums are the back door whereby the health care expenses of an aging nation consume the individual standards of living that can be provided by Social Security. This process can entirely change our personal standards of living in retirement and needs to be fully taken into account when making financial planning decisions.
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Wednesday, December 27, 2017
Trump’s Tax Cuts: The Good, The Bad, and the Inflationary / Economics / Inflation
By: MoneyMetals
At last, tax reform is happening! Last week, President Donald Trump celebrated the passage of the most important legislation so far of his presidency.
The final bill falls far short of the “file on a postcard” promise of Trump’s campaign. It even falls short of the bill trotted out by Congressional Republicans just a few weeks ago. It is, nevertheless, the most significant tax overhaul in more than a decade.
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Friday, December 15, 2017
Inflation is Spiking Globally… Bond Bubble Bursts in 3… 2… / Economics / Inflation
By: Graham_Summers
I believe 2018 will be the year inflation arrives.
The reason, as I’ve noted throughout mid-2017, is that multiple Central Banks, particularly the European Central Bank (ECB), Bank of Japan (BoJ) and Swiss National Bank (SNB) have maintained emergency levels of QE and money printing, despite the fact that globally the economy is performing relatively well.
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Thursday, December 07, 2017
Finally, An Honest Inflation Index – Guess What It Shows / Economics / Inflation
By: John_Rubino
Central bankers keep lamenting the fact that record low interest rates and record high currency creation haven’t generated enough inflation (because remember, for these guys inflation is a good thing rather than a dangerous disease).
To which the sound money community keeps responding, “You’re looking in the wrong place! Include the prices of stocks, bonds and real estate in your models and you’ll see that inflation is high and rising.”
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Tuesday, November 28, 2017
The $76 Trillion Bond Market Is Forecasting Inflation. Are You Ready? / Interest-Rates / Inflation
By: Graham_Summers
This year, (2017) was the year that the financial system moved from fearing deflation to expecting inflation.
You can see this in the breakout in inflation expectations. From 2013 until mid-2016, the financial system’s expectations of future inflation were in a downtrend. Mid-2016 this changed as expectations began to rise, breaking this downtrend in early 2017.
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Friday, November 17, 2017
The Social Security Inflation Lag Calendar - Partial Indexing / Economics / Inflation
By: Dan_Amerman
There is a lot of advice out there about Social Security - most of which is based on Social Security being fully inflation indexed.
However, as we will establish in this first in a series of analyses, Social Security is only partially inflation indexed. As a matter of design it does not fully keep up with inflation.
Sound like an obscure difference?
"Partial inflation indexing" is little understood by the general public, but it could transform your standard of living - along with the quality of life of millions of others - in the years and decades to come. Indeed, partial inflation indexing can mean effectively having only 11 months of benefit purchasing power- or even 8 months - to cover 12 months of expenses each year.
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Friday, November 17, 2017
The Fed Isn’t “Confused” About Inflation… It WANTS You In the Dark! / Interest-Rates / Inflation
By: Graham_Summers
The Fed claims it’s “confused” as to why inflation remains so low.
The Fed isn’t confused at all. It intentionally measures inflation in ridiculous ways to guarantee that the “official number” remains nowhere near reality.
On top of this, we have factual evidence that Fed is in fact well aware that inflation is clocking in well above its 2% “target.”
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Sunday, November 12, 2017
Who Are You Going to Trust, the Fed or $76 Trillion in”Smart Money”? / Stock-Markets / Inflation
By: Graham_Summers
Let’s talk about inflation.
There are two types of inflation in the world… the “inflation” that you and I experience in the form of a rising cost of living induced by Central Banks devaluing our currencies…
…and the inflation that Central Banks are “targeting” in the bizarre claim that somehow hitting said targets will unleash economic growth.
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Wednesday, November 08, 2017
Over Two Thirds of Global GDP Is Entering an Inflationary Shock / Economics / Inflation
By: Graham_Summers
The world is careening towards an inflationary shock.
As was the case with the beginning of the Housing Crash, few are noticing what’s happening. And even fewer realize the true scale of what’s about to take place.
Below is a chart you have to see.
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Monday, October 16, 2017
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target / Economics / Inflation
By: John_Rubino
Central banks in general and the Fed in particular are struggling to understand a world in which they’ve thrown everything they have at the economy without generating “beneficial” inflation. Their confusion can be traced back to some profoundly false assumptions.
Some Thoughts And Assertions
An inflation target implies that modest inflation is actually a good thing. This is simply wrong. Inflation is a “stealth tax” through which governments confiscate a bit of savers’ wealth each year without admitting it. If explained honestly such a trick would be a political loser always and everywhere.
Tuesday, September 19, 2017
The Fed’s 2% Inflation Target Is Pointless / Economics / Inflation
By: Kelsey_Williams
Within the Federal Reserve sometime in 1996, a discussion took place among FOMC (Federal Open Market Committee) members regarding the subject of inflation targeting. Federal Reserve District Governor (San Francisco) Janet Yellen believed that a little inflation “greases the wheels” of the labor market. Her preferred “target” was 2%. She asked Chairman (at the time) Alan Greenspan his preference.
The Chairman replied. “I would say the number is zero, if inflation is properly measured.”
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Monday, September 18, 2017
Inflation Lies, Lies and OMG More Lies / Economics / Inflation
By: James_Quinn
“There are three types of lies — lies, damn lies, and statistics.” – Benjamin Disraeli
Every month the government apparatchiks at the Bureau of Lies and Scams (BLS) dutifully announces inflation is still running below 2%. Janet Yellen then gives a speech where she notes her concern inflation is too low and she needs to keep interest rates near zero to save humanity from the scourge of too low inflation. I don’t know how I could survive without 2% inflation reducing my purchasing power.
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Friday, September 15, 2017
Higher US Interest Rates May Force Higher Inflation Rates / Economics / Inflation
By: Dan_Amerman
Summary:
1) Financial analysis of the three way relationship between interest rates, inflation and the U.S. national debt.
2) Higher interest rates causing higher interest payments on the $20 trillion national debt would ordinarily cause soaring deficits over time.
3) Detailed analysis of the "loophole", which is that if inflation even moderately increases - then interest rates can rise without exploding the real debt.
4) This simultaneous increase in interest rates and inflation would have a major impact on all markets, as well as long term retirement planning.
5) The logical response to rising interest rates may be to sharpen one's focus on how to better deal with higher rates of inflation over the long term.
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Wednesday, September 13, 2017
Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! / Economics / Inflation
By: Nadeem_Walayat
The consensus circus that the mainstream press journalists rely upon to produce their daily copy i.e. economists, have once more been caught by surprise as UK inflation rockets higher to 2.9% for August up from 2.6% for July. Now standing on the threshold of breaking above 3% as the implications of sterling's sharp drop in the wake of the Brexit vote continues to feed through to rising import prices and therefore providing persistent upwards pressure on shop prices as suppliers restock at much worse exchange rates that already depressed retailers such as the big supermarkets had delayed fully implementing that I have ben warning all year was likely to result in a crisis for the retail sector during 2017, that literally faces a perfect storm which could even result in a Woolworth's moment...
Tuesday, August 08, 2017
Is Inflation an issue or did the Fed Mess Up? / Economics / Inflation
By: Sol_Palha
Bankers know that history is inflationary and that money is the last thing a wise man will hoard.
William J. Durant
The Fed has been trying to create the illusion that inflation is an issue. The guys from the hard money camp also maintain that inflation is an issue and to a point they are right. Their definition of inflation is an increase in the money supply. The Fed, on the other hand, defines inflation as an increase in prices. The real definition of inflation is an increase in the money supply; rising prices are just the symptom of the disease. This article from mises.org summarises this concept quite succulently
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Wednesday, August 02, 2017
Greenspan Warns Moving Into “Stagflation Not Seen Since the 1970s” / Economics / Inflation
By: GoldCore
– Former Fed Chairman warns of bond bubble, stagflation
– “Moving into a … stagflation not seen since the 1970s”
– This will not be “good for asset prices”
– 10 Yr Gov bond yields fell from 15.8% in 1981 to 2.3%
– Interest rates will not stay low, will rise ‘reasonably fast’
– “Normal” interest rates in 4%-5% range
– Inflation will not stay at historically low levels
– Gold “protects savings” and is “store of value”
– Gold is the “ultimate insurance policy” says Greenspan
Monday, July 17, 2017
The Fed's Inflation Nightmare Scenario / Economics / Inflation
By: The_Gold_Report
Lior Gantz, founder of Wealth Research Group, analyzes how inflation will likely take off in the U.S., and why all of the condensed energy dammed up by the QE programs and the Fed asset purchases will explode all at once.
Wealth Research Group published an important update on the precious metals sector, which is trading in an unusual pattern, and how the bottom for junior mining shares is likely to play itself out in six to eight months.
For over nine years, central banks have been the front and center of the financial universe.
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Friday, June 30, 2017
The Fed Has No Control Over Inflation / Economics / Inflation
By: John_Mauldin
Ben Bernanke uttered the word taper in 2013, signaling that quantitative easing’s days were numbered. No one knew how the Fed would escape from years of QE and near-zero rates. But to her credit, Yellen accepted the challenge in late 2013.
She tapered the Fed’s bond buying down to zero (except for reinvestment of dividends and maturity rollovers) and began the rate-hike cycle. But that hasn’t normalized interest rates.
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Wednesday, June 28, 2017
Shrinkflation In UK – Real Inflation Much Higher Than Reported / Economics / Inflation
By: GoldCore
- Shrinkflation – Real inflation much higher than reported and realised
- Shrinkflation is taking hold in consumer sector
- Important consumer, financial, monetary and economic issue being largely ignored by financial analysts, financial advisers, economists, central banks and the media.
- Food becoming more expensive as consumers get less for price paid
- A form of stealth inflation, few can avoid it
- Brexit is the scapegoat for shrinkflation by the media and companies
- Consumers blame retailers rather than central banks
- Gold hedge has doubled in value since 2007
Wednesday, June 21, 2017
Inflation is No Longer in Stealth Mode / Economics / Inflation
By: GoldCore
- IHS Markit index shows UK households pessimistic about finances for 2017-18
- UK household finances remain under intense pressure from rising living costs
- 58 percent of respondents expected higher interest rates in 12 months time
- Inflation in the United Kingdom currently at near four-year high
- Prices up prices by 2.9pc year-on-year, biggest annual increase since June 2013
- In May consumer spending in the UK fell for the first time in almost four years
Monday, June 19, 2017
Raise the Inflation Target and Put a Date on It! / Economics / Inflation
By: Michael_Pento
Raise the Inflation Target and Put a Date on It! That’s the direction some high-profile economist and former members on the FOMC want to go. According to these academics, including Narayana Kocherlakota the former president of the Federal Reserve Bank of Minneapolis from 2009 to 2015, raising the inflation target just isn’t enough. They want to put a time horizon on it as well. In other words, they want to raise the inflation target higher than the current 2% level, and then place a firm date as to when that inflation goal must be achieved.
Thursday, May 04, 2017
New Risk for Investors: Fed Considers Jacking Up Inflation Target / Economics / Inflation
By: MoneyMetals
Stefan Gleason : Investors are under-estimating inflation risk. As a consequence, they are under-pricing inflation protecting assets including precious metals.
The Federal Reserve has given itself the objective of engineering an inflation rate of around 2%. However, there are many ways in which real-world inflation can potentially outpace the Fed’s 2% target.
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Thursday, April 06, 2017
From Inflation to Imflation, Agflation and Munflation / Economics / Inflation
By: Submissions
Vakhtang Charaia and Vladimer Papava write: Inflation is an important macroeconomic indicator for the analysis of an established economic situation as well as forecasting the economic development for any country. The “consumer basket,” which helps to indicate the consumer price index (CPI) or the average inflation rate, incorporates several commodity groups and given the correspondent weights encompasses different goods and services. Some of the commodity groups (e.g. electronics, new and used cars, furniture, hotel and restaurant services, etc.) fails to reflect the problem of the low-income population.
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Tuesday, March 21, 2017
UK Stagflation, Soaring Inflation CPI 2.3%, RPI 3.2%, Real 4.4% / Economics / Inflation
By: Nadeem_Walayat
The implications of sterling's sharp drop in the wake of the Brexit vote were inflationary resulting in an an increase the price of imports and therefore has been exerting upwards pressure on shop prices as suppliers restock at the worse exchange rate that already depressed retailers such as the big supermarkets had delayed fully implementing that is likely to result in a crisis for the retail sector during 2017 that literally faces a perfect storm, that could even result in a Woolworth's moment...
Friday, March 10, 2017
Is Inflation a problem? / Economics / Inflation
By: Submissions
Chris Marchese writes: Since “Surprise 16” when Donald Trump won the presidential election, he has made it clear that if he has his way, he will enact inflationary policies. These include increasing defense spending and infrastructure spending, while at the same time reducing government revenue via decreased income and corporate tax rates.
To achieve this objective, money must be created, which could be referred to as “helicopter money.” This is a more direct way of increasing the money supply, using fiscal policy as opposed to monetary policy.
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Wednesday, March 08, 2017
Inflation the Opium of the Masses, What The Hell Is Going On? (2) / Economics / Inflation
By: James_Quinn
In Part One of this article I exposed the establishment narrative of a strong economy as rubbish by providing hard data regarding imploding gasoline usage, failing bricks and mortar retailers and plunging restaurant sales.
“Inflation may indeed bring benefits for a short time to favored groups, but only at the expense of others. And in the long run it brings ruinous consequences to the whole community. Even a relatively mild inflation distorts the structure of production. It leads to the overexpansion of some industries at the expense of others. This involves a misapplication and waste of capital. When the inflation collapses, or is brought to a halt, the misdirected capital investment—whether in the form of machines, factories or office buildings—cannot yield an adequate return and loses the greater part of its value.Nor is it possible to bring inflation to a smooth and gentle stop, and so avert a subsequent depression.” – Henry Hazlitt – Economics in One Lesson
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Thursday, March 02, 2017
Have Central Banks Finally Achieved the Unthinkable, Inflation Unleashed? / Economics / Inflation
By: Graham_Summers
Globally inflation is on the rise.
On Monday Spain reported a year over year 7.5% jump in its PPI reading (a measure of inflation). Take a look at that chart.
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Tuesday, February 28, 2017
Global Inflation Surges, Central Banks Losing Control and Triggered the Wage Price Spiral? / Economics / Inflation
By: Nadeem_Walayat
Whilst in Britain, inflation focus is on the surge in prices following the BrExit vote that triggered a 20% drop in sterling which is slowly but steadily feeding its way through the supply chain and heralds a nightmare 2017 for already distressed retailers such as Tesco, Britain's biggest retailer that is literally facing a crisis which I have been covering in a series of videos the latest of which follows a BBC investigation into its 'fake' shelf prices duping customers into buying products at expired offer prices.
Monday, February 06, 2017
Inflation – What It Is, What It Isn’t, And Who’s Responsible For It / Economics / Inflation
By: Kelsey_Williams
Inflation is the debasement of money by the government. PERIOD.
It is NOT a general increase in the level of prices for goods and services.
The above statements are critical to an understanding and correct interpretation of events which are happening today – or expected to happen – that are casually attributable to inflation. So, let’s go one step further.
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Wednesday, February 01, 2017
He'll Bring Them Inflation, and They Will Love Him for It / Economics / Inflation
By: Gary_Tanashian
I used to make fun of the FOMC rate hike "decision" language in the mainstream media because under the Obama administration and its economic policies overseen by the Fed's monetary policy, there really was no decision, was there? It was ZIRP-eternity, interrupted by a lone and token rate hike in December 2015 (the Dec. 2016 hike does not count because the transition to a new administration and policy regime was already known; in effect, the Fed has already made its first hike under Trump).
Thursday, January 26, 2017
Inflation: Here's What the Wrong-Way Bet Looks Like / Economics / Inflation
By: EWI
Inflation: Here's What the Wrong-Way Bet Looks Like
Chart of the Day
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Thursday, December 29, 2016
Will Trump Bring Inflation to America’s Shores? / Economics / Inflation
By: MoneyMetals
By Stefan Gleason: Something is brewing in the economy. Since the election of Donald Trump, interest rates have spiked, copper prices have surged, and various sectors of the stock market have swung “bigly” on speculation of what “Trumponomics” will bring.
Scores of triumphant Republican commentators are already painting a bullish picture of the Trump economy. The GOP – which will control the White House, Congress, and most state governments – has a rare opportunity to implement a pro-growth agenda.
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Saturday, October 22, 2016
Inflation About To Explode Higher / Economics / Inflation
By: James_Quinn
“Those who are capable of tyranny are capable of perjury to sustain it.” ― Lysander Spooner
We all know the BLS artificially suppresses the CPI through bullshit substitution adjustments, quality adjustments, and various other incomprehensible hedonic adjustments made by government apparatchiks at the behest of their politician bosses. Some obscure theoretical academic calculation called owners equivalent rent accounts for almost a quarter of the CPI weighting.
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Monday, October 17, 2016
Bank of England Blames Brexit for Sterling Drop Inflation, Masks QE Money Printing Cause / Economics / Inflation
By: Nadeem_Walayat
The Bank of England's master monetary magician Mark Carney appeared on stage this week presenting his latest magic trick one of blaming the 16% drop in sterling on Brexit on all those who voted for it, and then warning of the inevitable future inflation consequences as the price of imports look to soar. After all the establishment elite remain determined to subvert the will of the British people be they bankers or 80% of the members of the establishment MP's that illustrates that democracy is to to all intents and purposes an illusion.
Friday, September 23, 2016
Hedonics, Food, and Pluralistic Ignorance / Economics / Inflation
By: Dr_Jeff_Lewis
Inflation is alive and well – despite what we hear from the mainstream. Due to pluralistic ignorance, it persists much longer than anyone would have ever predicted.
From Wikipedia:
Pluralistic ignorance
“In social psychology, pluralistic ignorance is a situation in which a majority of group members privately reject a norm, but incorrectly assume that most others accept it, and therefore go along with it.[1] This is also described as ‘no one believes, but everyone thinks that everyone believes’.”
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Tuesday, September 20, 2016
BrExit UK Inflation CPI, RPI Forecast 2016, 2017 / Economics / Inflation
By: Nadeem_Walayat
Going into the EU referendum the vested interest academic economists from the Bank of England down were repeatedly issuing dire warnings of a plunge in sterling that would send inflation soaring that would trigger a series of interest rate hikes all whilst the economy collapsed. The prices in the shops as measured by official UK CPI Inflation was hugging near 0% at a rate of just 0.3% for May 2016 data, meanwhile RPI which is the closest official measure to real inflation was already above 1% at 1.4%, which are set against the demand adjusted Real UK inflation rate of 1.8%. So official UK price Inflation was already well above 1% and trending towards 2% before BrExit.
Thursday, September 08, 2016
Failure of Inflation Targeting?! / Economics / Inflation
By: Axel_Merk
It ain't working. Eight years after the outbreak of the financial crisis, central bank chiefs suggest they have saved the world, but have they? We argue central banks have become part of the problem, not the solution. At its core, their indoctrinated focus on inflation may well do more harm than good, with potentially perilous implications for investors.
Tuesday, August 30, 2016
7 Things to Remember When Inflation Returns / Economics / Inflation
By: John_Mauldin
The problem for much of the global economy since the Financial Crisis of 2008 has been a lack of inflation. The banking system seized up, and loans were hard to come by for a couple of years. This shock hurt economic growth and knocked inflation down to near zero. Many major economies were hit with outright deflation.
In response, global central banks—including the US Federal Reserve—began a massive series of stimulus programs. The goal was to help their national economies get back on track. But, the results have been mixed. The US economy is one of the few to show signs of life over the last year or so.
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Monday, August 15, 2016
Job Seekers Sacrificed to the Inflation Gods / Economics / Inflation
By: Michael_Pento
Our Federal Reserve is composed of labor market economists who place their faith in the theory that inflation is spawned from too many people working. They believe there is a trade-off between employment and prices, where price stability and full employment cannot exist peacefully together the same time.
Given this view, the Fed’s maximum employment and stable inflation mandates are played as a zero-sum game--the lower the unemployment rate the higher the rate of inflation. Therefore, they set about to fulfill this task of low inflation as though it were a sort of Ancient Mayan sacrificial system: ceremonially counting how many job seekers need to be sacrificed on the altar of labor slack to placate the inflation gods.
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Sunday, July 03, 2016
UK BrExit Inflation Forecasts Spike CPI to 3%, RPI 4% / Economics / Inflation
By: Nadeem_Walayat
Whilst official UK CPI Inflation continues to hug near 0% at a rate of just 0.3% for May 2016, meanwhile RPI which is the closest official measure to real inflation has continued to nudge higher to 1.4%, which are set against the demand adjusted Real UK inflation rate of 1.8%. So deflation? Not really, real UK price Inflation is actually well above 1% and was already trending towards 2% before BrExit.
Saturday, May 14, 2016
The Fed Is Finally Coming Clean About Inflation / Interest-Rates / Inflation
By: Graham_Summers
For years the Fed has been lying about inflation.
There are many methods of doing this, but the simplest was to use a “measure” of inflation that did not actually measure inflation at all.
This is the famous Consumer Price Index of CPI. It is meant to measure inflation, but ignores obvious costs of living items like food and energy usage.
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Monday, April 18, 2016
The Fed Rapidly Losing Control, Creating an Inflationary Storm / Commodities / Inflation
By: Graham_Summers
The Fed is rapidly losing control.
Core inflation has already broken above 2% despite a complete collapse in commodity prices (the cost of living for many household items).
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Saturday, April 02, 2016
Cost Push Inflation is Another Keynesian Concept the Federal Reserve Believes In - They're Wrong / Economics / Inflation
By: Gordon_T_Long
FRA Co-founder Gordon T. Long is joined by Christopher P. Casey in discussing the decrease in oil price and its potential effect on the global economy.
Mr. Casey is the Managing Director of WindRock Wealth Management, a registered investment advisor and wealth management firm that subscribes to the Austrian school of economics. Mr. Casey is a frequent speaker before a number of organizations and conferences, including USA Watchdog, GoldMoney, Freedom Fest, and various bar associations and radio shows, including weekly financial and economic commentary on The Edge of Liberty (WNJC 1360, Philadelphia). His writings have appeared in a variety of publications and websites including The Ludwig von Mises Institute, Zero Hedge, Family Business, Casey Research, and Laissez Faire Books. He is a board member of the Economics Development Council with the University of Illinois, a Policy Advisor for The Heartland Institute's Center on Finance, Insurance, and Real Estate, and a Chartered Financial Analyst charterholder (CFA®)
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Thursday, March 31, 2016
Inflation is Here and the Fed Wants More / Economics / Inflation
By: Graham_Summers
The Fed failed to hike interest rates in March despite the “data” hitting levels at which the Fed said it would hike. Indeed, the Fed even lowered its expected number of rate hikes for this year from four to two!
This confirms for us that the Fed does indeed want inflation.
In the last few weeks, several Fed officials, most notably Fed Vice-Chair Stanley Fischer stated not only that inflation was appearing in the US but that this is something the Fed “would like to happen.”
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Wednesday, March 30, 2016
Inflation Has Hit the US and is Only Going to Get Worse / Economics / Inflation
By: Graham_Summers
The Fed is rapidly losing control.
Core inflation has already broken above 2%.
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Wednesday, March 23, 2016
Fed's Bullard: We Are Overshooting on Inflation / Economics / Inflation
By: Bloomberg
Federal Reserve Bank of St. Louis President James Bullard spoke with Michael McKee and Tom Keene on Bloomberg TV and Bloomberg Radio this morning. He discussed Fed policy, the U.S. economy global inflation, and moving toward a more normal nominal interest rate structure.
Bullard said policy makers should consider raising interest rates at their next meeting: "You get another strong jobs report, it looks like labor markets are improving, you could probably make a case for moving in April."
Tuesday, March 15, 2016
The Fed Just Confirmed Inflation is Here / Economics / Inflation
By: Graham_Summers
As we warned last week, the inflation genie is out of the bottle…
We now have confirmation that the Fed is aware of this…
Two key Federal Reserve officials said Monday they expect inflation to get closer to the central bank’s target…
Their comments came after data late last month that showed core inflation rose 1.7 percent in the 12 months ended in January.
Source: CNBC
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Monday, March 14, 2016
U.S. Inflation Comeback: Did Inflation Ever Go Away? / Economics / Inflation
By: Mike_Shedlock
This is a guest post by Joseph Y. Calhoun at Alhambra Investment Partners. His post starts off with this quote by Stanley Fischer, Fed Vice-Chair in a speech before the National Association for Business Economics.
Says Fischer "We may well at present be seeing the first stirrings of an increase in the inflation rate -- something that we would like to happen."
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Thursday, February 25, 2016
Central Bank Inflation Targets: Be Careful What You Wish For / Economics / Inflation
By: Michael_Pento
Did you ever ask yourself what this central bank obsession with inflation is really all about? After all, it is highly ironic that these erstwhile stewards of price stability have now perversely morphed into the frantic pursuit of currency destruction. This is because the current doctrine adopted by global central bankers is that growth comes from inflation; and without inflation there can be no growth. Therefore, as their new dogma dictates, inflation must be achieved at any cost.
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Monday, February 22, 2016
U.S. Inflation: Prepare for 4% or more! / Economics / Inflation
By: Ned_W_Schmidt
Last we visited on the subject of U.S. inflation (November, 2015) we wrote,
"Using those simplistic numbers suggests that U.S. inflation as measured by the [headline] CPI could rise to an annual rate of about 4% ..."
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Tuesday, February 16, 2016
Inflation Doesn't Come From Seasonally Adjusted Employment / Economics / Inflation
By: Michael_Pento
According to the Bureau of Labor Statistics (BLS), there were 151k, 000 net new jobs created in the month of January, and the unemployment rate fell to 4.9%. The continuing increase in new job creation and removal of slack in the labor market is causing the Phillips-curve-obsessed Fed to maintain a tightening stance on monetary policy.
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Wednesday, December 16, 2015
Consumer Prices: A Sticky Situation / Economics / Inflation
By: Gary_Tanashian
We have noted anecdotally that there is a creeping inflation in the system. It does not show up in commodities, which are in a post-bubble (ah, the good old ‘China story’ that was so vigorously promoted to a degree that would make a gold bug promoter blush) melt down. Crashing costs like that are providing the Goldilocks-like balance to rising costs within the economy.
This morning, the highly recommended Daily Shot had among its macro graphs a look at the “sticky” consumer price index. That got me to go over to the St. Louis Fed website and pull a couple different views of it. First, here is SLF’s description of the sticky index…
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Wednesday, November 18, 2015
U.S. Inflation Setup to Upset / Economics / Inflation
By: Ned_W_Schmidt
Is U.S. inflation setup to upset the markets? Motivation for considering this question begins with graph to right. Plotted in that chart is the year-to-year percentage change for the median U.S. CPI. That measure is calculated monthly by the diligent elves at Federal Reserve Bank of Cleveland. Period of time for chart is past ten years.
Friday, October 02, 2015
Money Supply and the Fed’s Serious Inflation Risks / Stock-Markets / Inflation
By: Zeal_LLC
Traders today universally believe inflation is dead, that there is no persistent decline in the purchasing power of money. That’s what government price indexes around the world are indicating. But this false notion is one of recent years’ main Fed-conjured illusions. Price inflation is the result of rising money supplies, and they have been skyrocketing. Serious risks are mounting that they will spill into price levels.
As simple as money seems, it is very complex in both theory and practice. We all understand the idea of working to earn money to buy goods and services. But the seminal treatise on money, the legendary economist Ludwig von Mises’ “The Theory of Money and Credit” published in 1912, weighed in at 445 pages! Money is a topic that endlessly preoccupies elite central bankers with doctorates in economics.
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Friday, August 21, 2015
US BreakEven Inflation at 5-Year Lows / Economics / Inflation
By: Ashraf_Laidi
Neither higher than expected Philly Fed survey at 8.3 in August nor a dovish set of FOMC minutes has managed to ease the onslaught of selling in global equities. The old trick that a dovish Fed and poor data are good for stocks is no longer valid. An uncertain Fed drove down chances of a Sept Fed hike to 36% from close to 50% earlier in the week. Meanhwile, stock indices deepen their selloffs well after a series of DeathCrosses emerged in the S&P500, Dow-30, Dax-30, FTSE-100 and Shanghai Composite. which may suggest that they require the Fed to firmly shut the door on any 2015 rate cut.
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Thursday, August 20, 2015
Inflation - Don’t Be Fooled By Our Current Price Stability / Economics / Inflation
By: Frank_Shostak
The yearly rate of growth of the personal consumption expenditure (PCE) price index adjusted for food and energy stood at 1.3 percent in June — the same figure as in May. Note that on average since the beginning of this year the yearly rate of growth stood at 1.3 percent. Many economists have expressed satisfaction that the yearly rate of growth has been stable so far notwithstanding that it stood below the Fed’s target of 2 percent.
Sunday, August 16, 2015
Asset-Price Inflation Enters Its Dangerous Late Phase / Economics / Inflation
By: MISES
Brendan Brown writes: Asset price inflation, a disease whose source always lies in monetary disorder, is not a new affliction. It was virtually inevitable that the present wild experimentation by the Federal Reserve — joined by the Bank of Japan and ECB — would produce a severe outbreak. And indications from the markets are that the disease is in a late phase, though still short of the final deadly stage characterized by pervasive falls in asset markets, sometimes financial panic, and the onset of recession.
Wednesday, August 05, 2015
Is Japan’s Inflation Failing? / Economics / Inflation
By: Gary_Tanashian
We begin with NFTRH.com’s post from July 16 noting the message I got from a former associate (from my previous life as a manufacturer)…
“Just an update for you, some disturbing news has leaked out this week. Machine tool builders have put out blow out [lists] to all sales persons in the USA, not sure if world wide. Mori Seiki list has 600 to 700 machines on it WOW!!! never have i heard of such a huge list by any one Builder. Not sure what they see coming but it can’t be good.”
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Friday, July 31, 2015
Jackson Hole All About Inflation / Economics / Inflation
By: Ashraf_Laidi
Another FOMC statement and another swing at the law of probability. Some banks are considering the probability of a September Fed hike to be as high as 70%. Others prefer to hedge themselves with more appropriate qualitative means of referring to September as a "high probability outcome as long as....", citing the two upcoming jobs report and their average hourly earnings components. But even if the next two jobs reports are accompanied by robust hourly earnings, the inflation objective remains in doubt. We've long mentioned in previous pieces how the 20% decline in oil since early May will further retard any recovery in price growth, which has prompted the Fed to drop its phrase in the FOMC statement that "energy prices have stabilized" discussed here.
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Tuesday, June 16, 2015
Ukraine's Soaring Inflation / Economics / Inflation
By: Steve_H_Hanke
I estimate the current annual implied inflation rate in Ukraine to be 92 percent. This is the world's second-highest inflation rate, far lower than Venezuela's 480 percent but slightly higher than Syria's 75 percent.
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Sunday, June 07, 2015
EXPOSED: The Biggest Threat to Your Retirement / Stock-Markets / Inflation
By: Investment_U
Rachel Gearhart writes: This week, we are doing something different.
We are analyzing two charts - one that exposes a huge threat to your retirement and another that shows how you can protect yourself.
First, the bad news...
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Wednesday, May 20, 2015
UK Deflation Warning - Bank of England Economic Propaganda to Print and Inflate Debt / Economics / Inflation
By: Nadeem_Walayat
DEFLATION! The mainstream broadcast press appears to have swallowed the Bank of England's deflation economic propaganda hook line and sinker as they regurgitate the dangers of deflation following release of UK CPI inflation for April of -0.1% prompting headline grabbing warnings of the dangers of falling prices, the dangers of debt not being eroded by inflation, the dangers of people not spending as they wait for prices to fall, the dangers of ... you get the picture as the Bank of England sets the scene for their very own 007 Mark Carney to come to Britain's rescue with his magic PPK INFLATION gun, by promising that the Bank of England will keep price stability by aiming to bring the official CPI inflation rate back to 2%, and thus 007 Mark Carney saves Britain from the Spectre of Deflation.
Tuesday, May 19, 2015
Bank Holiday Joy as UK Inflation Stays Low / Personal_Finance / Inflation
By: MoneyFacts
Inflation figures released today show that the Consumer Prices Index (CPI) fell from 0.0% to -0.1% during April, which is the first time the UK has fallen into deflation since the sixties.
Today, all 859 savings accounts on the market beat inflation, and of these, 666* (149 no notice, 78 notice, 231 fixed rate bonds and 208 ISAs) are without restrictive criteria*.
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Wednesday, May 13, 2015
The End Is Near? Peak Trophy Asset Inflation / Stock-Markets / Inflation
By: John_Rubino
Stories about insane prices being paid for unique (and some not so unique) things are now a daily occurrence. A few examples:
Friday, May 01, 2015
Baltimore Inflation Riots / Politics / Inflation
By: Dr_Jeff_Lewis
The following is a compilation, first published at Zero Hedge, of statements made by The Baltimore Orioles Vice President, John Angelos. It struck me as fascinating on two basic levels. First off, the stunner is that a prominent elitist has spoken a bit of truth that would ordinarily be almost unutterable among such circles. The second thing is how he ultimately gets it wrong
Thursday, April 30, 2015
The Many Failures of the CPI Consumer Price Index / Economics / Inflation
By: Mark_Thornton
Austrians oppose the whole notion of trying to accurately measure “inflation” which mainstream economists see as a general rise in prices. (Austrians view inflation as a politically engineered increase in the money supply.)
A few years ago, mainstream economists like Paul Krugman chastised the Austrians for the lack of anticipated price inflation in the economy. However, their mistake was a fixation on the Consumer Price Index (CPI). If you looked around at other prices in the economy you could see higher prices in just about every other market, such as commodities, oil, gold, producer goods, real estate, and stocks.
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Tuesday, April 14, 2015
Save it or Spend it as UK Inflation Stays Put 0% / Personal_Finance / Inflation
By: MoneyFacts
Inflation figures released today show that the Consumer Prices Index (CPI) stuck at 0.0% during March.
Today all 874 savings accounts on the market beat inflation, and out of these 681* (149 no notice, 79 notice, 243 fixed rate bonds and 210 ISAs) are without restrictive criteria*.
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Friday, April 03, 2015
Is the CPI Telling Us the Full Story on Inflation? / Economics / Inflation
By: DailyWealth
Dr. David Eifrig writes: You can't fully trust economic statistics...
As I explained in yesterday's essay, measuring the economy is difficult. Very difficult. And in a sense, there are no "real" numbers.
But the official measures of inflation, gross domestic product (GDP), or employment aren't the result of some conspiracy agenda. And a close look at GDP data confirms the economy is still slowly recovering from the financial crisis.
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Thursday, April 02, 2015
The Great Inflation Canard / Economics / Inflation
By: Steve_H_Hanke
Charles W. Calomiris and Peter Ireland, two distinguished economists and friends, wrote an edifying piece in The Wall Street Journal on 19 February 2015. That said, their article contains a great inflation canard.
They write that “Fed officials should remind markets that monetary policy takes time to work its way through the economy—what Milton Friedman famously referred to as “long and variable lags”—and on inflation.” That’s now a canard.
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Wednesday, March 25, 2015
Zero UK CPI Inflation Rate Prompts Deflation Danger Propaganda For Fresh Money Printing / Economics / Inflation
By: Nadeem_Walayat
Zero 0.0% CPI inflation not seen for 50 years as the continuation of the consequences of the collapse in crude oil prices that continue to stagnate below $50. And that despite falling unemployment wages are being suppressed as a continuing consequences of out of control immigration as workers continue to flood into the UK from across the economically depressed euro-zone. Whilst the mainstream press continues to warn of the dangers of outright deflation as CPI is expected to nudge below 0% and describe how this is bad for the economy as people put off consuming today in the anticipation of lower prices tomorrow. Meanwhile RPI, which is the closest thing to real inflation slid to 1% (1.1%) and is set against the real demand adjusted UK inflation rate of 1.5%.
Saturday, March 14, 2015
An Austrian take on Inflation / Economics / Inflation
By: Alasdair_Macleod
We know that today’s macroeconomists are very confused about inflation, if only because despite all experience they think they can print money and increase bank credit with a view to generating price inflation at a controlled 2% rate. Admittedly, most of them will acknowledge there is more hope than reality about the controlled bit. Economic policy should be based on more than just hope.
Tuesday, March 03, 2015
BLS CPI Lie - How's That Dsflation Working Out for You? / Economics / Inflation
By: James_Quinn
The BLS put out their monthly CPI lie last week. They issued the proclamation that inflation is dead. Did you know your costs are 0.1% lower than they were one year ago. They then used these deflation numbers to proclaim your real wages soared last month. It’s all good. The American consumer is so flush with cash, they decided to spend less money for the second month in a row. The Wall Street shysters are so happy with declining consumer spending, declining corporate profits, and a global recession, they pushed the NASDAQ up to 5,000 for the first time in 15 years. Hey!!! That was the year 2000. Things really got better after that milestone.
Monday, March 02, 2015
The CPI Lag in Disguise / Economics / Inflation
By: Dr_Jeff_Lewis
Here’s another reader’s original and inspired perspective on the short term effects of consumer price inflation and how it differs from the inflation in speculative finance. This latter type of inflation will ultimately break the system and the currency.
Reader Dan pointed out:
“Regardless of the fluctuations in paper currency values, (which are basically measured against the value of gold), precious metals tend to retain their value in the long run as determined by their calculated exchange rates for goods and services.
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Thursday, February 26, 2015
The Fed Waited Too Long: Here Comes Inflation / Economics / Inflation
By: EconMatters
Sunday, February 22, 2015
Inflation is Dead, Long Live Inflation / Economics / Inflation
By: Submissions
Nicholas Migiliaccio writes: This is a composite index composed of securities whose movements tend to anticipate the subsequent commencing and movement of Inflation and Deflation.
In this illustration, the manifestation of Deflation, is subtracted from the manifestation of Inflation, and the remainder is displayed graphically.
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Wednesday, February 18, 2015
UK Good Deflation Election Boost for Conservatives But Inflation Mega-trend Remains Exponential / Economics / Inflation
By: Nadeem_Walayat
The latest UK official CPI inflation data is at an historic low rate of just 0.3% which prompted the mainstream financial press and academic economists to go overboard on commentary on the dangers of deflation, much as the Bank of England tends to propagandise in its quarterly inflation reports of why Inflation needs to be at or above 2% CPI. The press continues to warn of outright deflation later this year as CPI is expected to nudge below 0% and how this is bad for the economy as people put of consuming today in the anticipation of lower prices tomorrow.
Monday, February 09, 2015
Yellen Looking For Inflation In All The Wrong Places / Economics / Inflation
By: Michael_Pento
In 1958, economist W.H. Phillips wrote a paper that argued an inverse relationship existed between wage inflation and unemployment. The crux of his theory was when unemployment is high wage growth is absent; but when the unemployment rate is low wages rise rapidly. Philips established his theory under the framework of a curve and it was aptly referred to as “The Phillips Curve”. However, many economists wrongly adopted the Phillips Curve by relating it to general price inflation, rather than to just wage inflation. Sadly for Phillips Curve enthusiasts, the high inflation and high employment rates of the 1970’s turned this metric on its head.
Wednesday, January 14, 2015
UK CPI Inflation Smoke and Mirrors Deflation Warning, Inflation Mega-trend is Exponential / Economics / Inflation
By: Nadeem_Walayat
The official CPI measure for UK Inflation fell to just 0.5% in December with the more recognised RPI falling by 0.4% to 1.6% prompting the mainstream press to turn it's Eye of Sauron onto Inflation as the topic of the day, usually leading with commonsense reporting of the positives of low inflation such as falling energy and fuel costs and more disposable earnings for Britains wages slaves after having struggled for over 6 years with stagnating and even falling real terms wages. Though the media reports soon conclude with a lengthy explanation by an academic economist of why deflation is very, very, very bad in that it could trigger a downward economic death spiral as consumers put off buying goods and services in anticipation of lower future prices and hence the economy enters into an deflationary spiral of falling demand and output as occurred during the 1930's and for a few months into Mid 2009.
Tuesday, December 23, 2014
Jaguar Inflation - A Layman's Explanation of Government Intervention / Economics / Inflation
By: EWI
I am tired of hearing people insist that the Fed can expand credit all it wants. Sometimes an analogy clarifies a subject, so let's try one.
It may sound crazy, but suppose the government were to decide that the health of the nation depends upon producing Jaguar automobiles and providing them to as many people as possible. To facilitate that goal, it begins operating Jaguar plants all over the country, subsidizing production with tax money. To everyone's delight, it offers these luxury cars for sale at 50 percent off the old price. People flock to the showrooms and buy. Later, sales slow down, so the government cuts the price in half again. More people rush in and buy.
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Wednesday, December 17, 2014
How Inflation Changes Retirement Benefit Choices / Personal_Finance / Inflation
By: Dan_Amerman
One of the most important financial questions someone of retirement age in the United States faces is when to start collecting their Social Security payments ─ and this crucial decision deserves the best possible information to work from.
Recently, there has been quite a bit of publicity about studies showing that for a retiree who lives to an average age, there is a six figure advantage to waiting until age 70 to begin the collection of Social Security payments. That is an amazing advantage ─ but does it hold up under close scrutiny?
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Friday, November 14, 2014
Inflation Chronicles - Art Prices So High, “The Crowd Forgot To Clap” / Economics / Inflation
By: John_Rubino
Depending on which expert is talking, the world is either falling into a deflationary abyss or launching an inflationary moonshot. What’s truly weird and fascinating is that they’re both right. The mountain of debt taken on in the past few decades exerts a profoundly deflationary pull on the economies of Europe and Japan, and to a lesser extent the US. At the same time the torrent of currency flowing out of the world’s central banks is swelling the accounts of the super-rich who are converting it into real assets as fast as they can, causing near-hyperinflation in some favored markets. Hence the spectacle of Paul Krugman (and most Fed governors) complaining about low inflation and warning of a deflationary death spiral, while things like this are happening:
Sunday, October 19, 2014
Reasons the Bernanke-Yellen Asset-Price Inflation May Be Nearing Its End / Economics / Inflation
By: Joseph_T_Salerno
There are strong indications that the remarkable run up of asset prices in the last few years is beginning to run out of steam and may be on the verge of collapse. We will leave aside the question of whether the asset inflation is symptomatic of a garden-variety inflationary boom or is a more virulent bubble phenomenon in which prices are rising today simply because buyers anticipate that they will rise tomorrow.
Thursday, October 16, 2014
The Inflation Imputation, Dear Saver, May You RIP / Economics / Inflation
By: John_Mauldin
A note has been circulating among economists, calling into question the wisdom of another group of economists who wrote an open letter to the Federal Reserve a few years ago suggesting that one of the risks of their quantitative easing program was increased inflation. Since we have not seen CPI inflation, this latter group is calling upon the former to admit they were wrong, that quantitative easing does not in fact cause inflation. To no one’s surprise, Paul Krugman has written rather nastily and arrogantly about the lack of CPI inflation.
Wednesday, October 15, 2014
Governments Need Inflation, Economies Don't / Economics / Inflation
By: Peter_Schiff
In an article in the UK's Telegraph on October 10, veteran economic correspondent Ambrose Evans-Pritchard laid bare the essential truth of the nearly universal current embrace of inflation as an economic panacea. While politicians, CEOs and economists talk about demand stimulus and the avoidance of a deflationary trap, Evans-Pritchard reminds us that inflation is all, and always, about debt management.
Tuesday, October 14, 2014
UK Savings and September 1.2% CPI Inflation / Personal_Finance / Inflation
By: MoneyFacts
Inflation figures released today show that the Consumer Prices Index (CPI) fell from 1.5% to 1.2% during September.
To beat inflation, a basic rate taxpayer at 20% needs to find a savings account paying 1.5% per annum, while a higher rate taxpayer at 40% needs to find an account paying at least 1.9%.
Of the 621 non-ISA accounts in the market today, there are 170 that basic rate taxpayers can choose to negate the effects of tax and inflation.
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Thursday, October 09, 2014
It’s Inflation All the Way, Baby! / Economics / Inflation
By: Gary_Tanashian
The title’s quote is one of many eminently quotable messages I had the pleasure of receiving over a few years of contact with a late, great and a very interesting man* named Jonathan Auerbach, who headed a unique specialty (emerging and frontier markets) brokerage in NYC called Auerbach Grayson.
Jon was an honest and ethical man. He was also a gold bug (in that descriptor’s highest form) who innately understood the Kabuki Dance that has been ongoing by monetary authorities since the ‘Age of Inflation onDemand‘ (what guest poster Bruno de Landevoisin calls the Monetized New Millenium) started its most intense and bald faced phase in 2000.
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Tuesday, October 07, 2014
Inflation is Not the Only Way Easy Money Destroys Wealth / Economics / Inflation
By: Frank_Shostak
The US Federal Reserve can keep stimulating the US economy because inflation is posing little threat, Federal Reserve Bank of Minneapolis President Kocherlakota said. “I am expecting an inflation rate to run below two percent for the next four years, through 2018,” he said. “That means there is more room for monetary policy to be helpful in terms of … boosting demand without running up against generating too much inflation.”
The yearly rate of growth of the official consumer price index (CPI) stood at 1.7 percent in August against two percent in July. According to our estimate, the yearly rate of growth of the CPI could close at 1.4 percent by December. By December next year we forecast the yearly rate of growth of 0.6 percent.
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Wednesday, September 24, 2014
10 Things That Affect Your Purchasing Power / Economics / Inflation
By: Harry_Dent
Rodney Johnson writes: This might be considered “wonkish,” but it tells the story of how middle-class purchasing power has suffered since 2007.
Recently, the Federal Reserve released the 2013 Survey of Consumer Finances (SCF). This tri-annual survey is a treasure trove of information that provides a snapshot into the financial life of the median American in inflation-adjusted 2013 dollars. Notice that I said “median” and not “average”… that’s important.
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Thursday, September 11, 2014
Full Frontal Inflation / Economics / Inflation
By: John_Rubino
By now it’s an article of faith within the sound money community that most major countries have borrowed so much that they’re left with only two options: default on their debt through mass-bankruptcy and a new Great Depression, or inflate it away through stepped-up currency creation.
This is an investment thesis, since a given country’s choice will determine which asset classes rise and fall.
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Thursday, September 11, 2014
Doubling Down on Inflation / Economics / Inflation
By: Peter_Schiff
Friday's release of disappointing August payroll numbers should have been a jarring wake-up call warning Wall Street that the economy has been treading on thin ice. Instead the alarm clock was stuffed under the pillow and Wall Street kept sleeping. The miss was so epic in fact (the 142,000 jobs created was almost 40% below the consensus estimate) that the top analysts on Wall Street did their best to tell us that it was all just a bad dream. Mark Zandi of Moody's reacted on Squawk Box by saying "I don't believe this data." The reliably optimistic Diane Swonk of Mesirow Financial told Reuters the report "sure looks like a fluke, not a trend".
Monday, September 08, 2014
Ten Reasons to Condemn Inflation / Economics / Inflation
By: MISES
Andreas Marquart writes: Inflation, defined as an expansion of the supply of unbacked money, is an elementary evil, always and everywhere that it occurs.[1] It is the ignored and core cause of numerous problems in the economy and in society, including:
Thursday, September 04, 2014
Why Raising the Minimum Wage Will Increase Inflation and Hurt the Economy / Economics / Inflation
By: Jeff_Opdyke
It goes to show that even the president of the United States doesn’t understand why America’s economy is structurally flawed these days, despite the recovery.
At a Labor Day rally in Milwaukee on Monday, Mr. President said that if he had a service-sector job and “wanted an honest day’s pay for an honest day’s work, I’d join a union.”
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Tuesday, September 02, 2014
U.S. Inflation Pressures in Core Food Components / Commodities / Inflation
By: EconMatters
Inflation Isn`t Moderating, It is Consolidating before the Next Leg Up
Inflation numbers of late have been helped by the drop in fuel costs, the agricultural grains have been brought down in the futures market by the overplanting of corn, but eating out for the weekend where shrimp, steak, other seafood and vegetables are consumed at dinner brings home the idea that restaurant costs are only going up on the whole, and expect menu prices to continue to be raised at your favorite restaurant.
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Wednesday, August 27, 2014
A Look at the Coming 30-year Inflation Cycle / Economics / Inflation
By: Clif_Droke
The upcoming bottom of the 60-year cycle will drastically alter the U.S. economic landscape. The ending of the long-term disinflationary/deflationary undercurrent will soon give way to a new long-term cycle of re-inflation/inflation, bringing with it both challenges and opportunities.
As we begin a new 60-year cycle, the main challenge for the Federal Reserve will be to resist the temptation to stimulate the economy during periods of sub-par growth. The saying, "Old generals fight the old wars" applies here as the Fed has always had difficulty in discerning the dominant economic undercurrent.
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Monday, August 25, 2014
Myths About Money and Inflation / Currencies / Inflation
By: MISES
Patrick Barron writes: The following are six of the most prevalent economic myths that appear time and again in the mainstream media. I will give a brief description of each and a brief description of the economic reality, as seen from an Austrian perspective.
Saturday, August 23, 2014
Inflation vs the Deflationary Straw Man / Economics / Inflation
By: Gary_Tanashian
No matter the debates over inflation vs. deflation, increasing employment vs. sound monetary policy or systemic health vs. fragility (and whatever else is flying around in Jackson Hole this week), the CPI marches onward and upward. That is the system and it is predicated on creating enough money out of thin air while inflation signals are (somehow) held at bay.
The Straw Man* in this argument lives in the idea that inflation is not always destructive, that inflation can be used for good and honed, massaged and targeted just right to achieve positive ends to defeat the curse of deflation that is surely just around the next corner. Currently, the Straw Man is supported by the reality of the moment, which includes long-term Treasury yields remaining in their long-term secular down trend.
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Wednesday, August 20, 2014
Inflation Watch: $245,000 to Raise a Child in United States / Economics / Inflation
By: EconMatters
Welcome to Middle-Income Family American Style
Yesterday the USDA`s annual report laid out another 2% increase in the cost to raise a child in the United States, and this only includes the costs associated with the age of 18, which any modern family realizes doesn`t include college, and the fact that many kids either live at home, or require financial help long after the age of 18.
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Tuesday, August 12, 2014
Hopelessly Devoted to Inflation / Economics / Inflation
By: Michael_Pento
In the middle of July the stock market finally awoke from its QE-induced coma and realized the Federal Reserve’s tapering, which has been going on for the last six months, was for real. Like a child, who becomes accustomed to a parent that threatens punishment but never follows through, the market had been in denial to the Feds withdrawal of monetary stimulus. But now, thankfully, the ending of Fed asset purchases will be the pin that pops this QE-inflated market and economy. But please do not confuse the end of QE with the Fed actually fighting inflation and selling trillions of dollars’ worth in Treasuries and mortgage backed securities (MBS)…because that will never happen.
Monday, August 04, 2014
Inflation Trumps U.S. Economic Growth / Economics / Inflation
By: Peter_Schiff
With the first half of 2014 now in the books, many investors are happy with the performance thus far, especially given the economic headwinds that few saw coming. The 26% rally in U.S. stocks in 2013 gave way to a more modest 7% gain in the first half of 2014. Most see this as a positive development in a maturing market. But beneath the surface, important trends are emerging that should give investors reasons to re-evaluate their assumptions.
Monday, July 21, 2014
Inflation's Real Cause / Economics / Inflation
By: Michael_Pento
According to Pimco's new Chief Economist, Paul McCulley, the Fed's war against inflation has been won! But, before we get out our party hats and plan the tickertape parade, we have to ask ourselves - for the past 27 years have we really been at war with inflation? Yes, during the late 1970's and early 80's a different Paul (Paul Volcker, Chairman of the Federal Reserve) waged a real battle against inflation. Mr. Volcker painfully took the Fed Funds rate to near 20 percent in June of 1981. The economy suffered a deep recession, it was a treacherous battle plan, but the Fed stayed the course because Volcker was correctly convinced that limiting the growth rate of the money supply was the key to popping asset bubbles, vanquishing inflation and establishing a sound economy.
Wednesday, July 16, 2014
What the Facts Say About Inflation / Economics / Inflation
By: DailyWealth
Dr. David Eifrig writes: Investors are terrified of inflation right now...
But is it really a worry? Is it poised to eat away at your savings and wreck your income investments?
Many newsletter writers and talking heads say yes... According to them, inflation is already a big problem.
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Wednesday, July 16, 2014
Which Way is Inflation Blowing? Watch Commodities / Commodities / Inflation
By: Gary_Dorsch
In an age when governments of every political leaning and ideological stripe distort economic data to promote their parties’ interests, it is hardly surprising that the nation’s inflation rate is reported in a manner that best suits their political needs. By the same token, in an age of near universal cynicism on the part of citizens towards their corrupt politicians, - it is entirely natural for official inflation data to be wildly at odds with the reality faced by consumers and businesses, and in turn, to be regarded with utter disbelief.
Wednesday, July 09, 2014
This Is Disgusting — And the Food Sounds Gross Too / Economics / Inflation
By: John_Rubino
It is by now generally understood, at least in the sound money community, that inflation is much higher than the government admits and that the true extent of the problem is being hidden in various ways. But the specifics keep getting more and more disturbing. Here’s a recent Phoenix Capital note (via Zero Hedge) on the adulteration of our “food.”
Tuesday, July 08, 2014
Inflation: Higher And Higher We Go / Economics / Inflation
By: Darryl_R_Schoon
In the end game, truth is found only at the margins
In Time of the Vulture: How to Survive the Crisis and Prosper in the Process(2007, 2012 3rd edition), I wrote about inflation and its root cause:
In a credit-money system, over time the constant infusion of increasing amounts of credit will inevitably lead to higher and higher rates of inflation. Because common knowledge of this fact is not in the best interests of those benefiting from the system, it is hidden away. And in the US, hiding the real rate of inflation is done the old-fashioned way, by lying about it.
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Friday, July 04, 2014
John Williams Warns of Massive Inflation and Then Hyperiflation / Economics / Inflation
By: Videos
Jeff Weatherford of Sprott Money News, Interviews John Williams. (39.37)
He says; “The government has to address its long-term solvency issues if it’s going to survive, if it’s going to have any credibility in the rest of the world…We have ahead of us here probably the worst fundamentals ever facing the dollar…I don’t think things have ever been more negative.
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Friday, June 27, 2014
No Inflation ...Thanks to ObamaCare / Economics / Inflation
By: EconMatters
Healthcare Data Skewed
On Thursday the Personal Income and Outlays Report came out also known as the spending report and just like yesterday`s GDP downward revision the Healthcare component is playing havoc with the overall numbers, and it is pretty obvious due to the newly enacted Affordable Care Act also known as Obamacare.
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Thursday, June 26, 2014
The Fed Misrepresenting Inflation to Justify Inept Policy / Economics / Inflation
By: EconMatters
Government Data is useless
The final GDP calculation came out on Wednesday, and we have several takeaways from this latest revision. First of all government reporting data is all over the place, and not in a good way. I have no confidence that any of these numbers are actually right, and second with an ever changing economy, most of these data gathering tools are obsolete at best. The GDP number has now become a complete farce, the components used to calculate growth are so useless that we literally could have a plus 7% GDP quarter, and it mean absolutely nothing regarding the real health of the US economy!
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Monday, June 23, 2014
U.S. Fed’s “Noisy” Inflation Fantasy / Economics / Inflation
By: Michael_Pento
The Fed wants investors to be as unconcerned as the central bank is about inflation. Even though year over year consumer price inflation is above its target, the Fed chose in its latest press conference to claim the 2.1 percent YOY increase in prices paid merely represented “noisy” readings in the inflation gauge. However, the truth is that rising prices are a direct result of years’ worth of zero percent interest rates and $3.5 trillion in money printing provided courtesy of both Banana Ben Bernanke and the Counterfeiting Queen, Janet Yellen.
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Thursday, June 19, 2014
The Fed Just Lost Any Shred of Credibility on Inflation / Economics / Inflation
By: EconMatters
Those High Chicken Prices are just Noise – Tell that to the Cashier
The Fed today in their press conference lost any credibility on a number of issues, and it really goes to show that they have no clue what they are doing at this point. First they called the overheating inflation in the economy Noise, yes you heard right NOISE which is now showing up even in the watered down indexes used to track it by the Fed, and already above their target of 2% on a year over year basis and rising, (wait until you see the next two month`s CPI reports on a spike in gasoline prices as we enter the summer driving season).
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Tuesday, June 10, 2014
Wall Street Yield Trade: Another Explanation For Low Inflation / Stock-Markets / Inflation
By: EconMatters
In an unprecedented move to fight off the threat of deflation, ECB cut its main interest rate to near zero at 0.15%, and its interest rate on deposits to a negative 0.1% for the first time. This means ECB will now be charging banks 0.1% to hold their reserves. ECB hopes these aggressive measures would spur banks to ramp up lending, and also weaken the euro. France has long been arguing that high euro exchange rate is holding back the economic recovery in the Euro Zone.
Saturday, May 31, 2014
How Inflation Helps Keep the Rich Up and the Poor Down / Economics / Inflation
By: MISES
Jörg Guido Hülsmann writes: The production of money in a free society is a matter of free association. Everybody from the miners to the owners of the mines, to the minters, and up to the customers who buy the minted coins — all benefit from the production of money. None of them violates the property rights of anybody else, because everybody is free to enter the mining and minting business, and nobody is obliged to buy the product.
Friday, May 30, 2014
Fed's Lacker Warns U.S. Inflation Is Accelerating / Economics / Inflation
By: Bloomberg
Federal Reserve Bank of Richmond President Jeffrey Lacker told Bloomberg Radio host Kathleen Hays on "The Hays Advantage" today that inflation may not need to be too fast before the Fed raises the main interest rate. Lacker said, "I don't see us having to wait until inflation is actually getting to a place we don't like."
Lacker said, "We've seen inflation bottom out; I think it's pretty conclusive it's bottomed out in the last couple of quarters. And there's some tentative signs that a move back towards, a gradual move back towards 2 percent is in train, and I'm hopeful that that will play out over the year."
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Tuesday, May 27, 2014
Hot Inflation Reports to Dominate Next Fed Meeting / Interest-Rates / Inflation
By: EconMatters
Important Econ-Inflation Events
The Federal Reserve meeting begins Tuesday June 17th with the FOMC meeting announcement the following day Wednesday June 18th which will be followed by their forecasts and the Fed Chair press conference.
In the last Fed meeting a weak housing concern cropped up on the Fed`s agenda, but all the housing data has rebounded in the latest economic reports with the spring weather, and the new concern at next month`s Fed meeting will be inflation.
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Friday, May 23, 2014
U.S. Federal Reserve See No Evil / Economics / Inflation
By: Peter_Schiff
In this week's release of the minutes from its April 29-30 meeting, Federal Reserve policymakers made clear that they see little chance of inflation moving past their 2% target for years to come. In order to make such a bold statement, Fed economists not only had to ignore the current data, but discount the likelihood that their current stimulus will put further upward pressure on prices that are already rising.
Thursday, May 22, 2014
Media reports costs of living rises as Good News! / Politics / Inflation
By: Jonathan_Davis
Some quotes from the BBC article – which no doubt – were repeated throughout the country all day and night yesterday:
“Food sales during the late Easter holiday made a significant contribution to the overall figure, the ONS said.
They were 6.3% higher in April against a year earlier”
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Thursday, May 15, 2014
How Inflation Picks Your Pocket / Economics / Inflation
By: MISES
Daniel James Sanchez writes:
In the denouement of the film There Will Be Blood, the antihero Daniel Planview dramatically reveals to his nemesis that he has secretly siphoned away all of the latter's underground oil.
"Drainage!" he bellows, as only Daniel Day-Lewis can, "Drained dry. I'm so sorry. Here, if you have a milkshake, and I have a milkshake, and I have a straw. There it is, that's a straw, you see? You watching? And my straw reaches across the room, and starts to drink your milkshake. I... drink... your... milkshake! [sucking sound]"
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Friday, May 09, 2014
What the Fed’s Inflation Mania Means For Investors / Interest-Rates / Inflation
By: Graham_Summers
The signs of inflation continue to appear in the economy.
The Fed is ignoring this because the Fed is afraid of deflation… despite food prices, energy prices, healthcare costs, home prices and stocks soaring.
Friday, May 02, 2014
The Upcoming Dawn of the 60-Year Inflation Cycle / Economics / Inflation
By: Clif_Droke
The latest action by the Federal Reserve is part of a policy shift, the most important one in fact of the last five years. The Fed's plan for unwinding its quantitative easing (QE) stimulus coincides with the bottom of the 60-year cycle of inflation/deflation. It couldn't be happening at a better time and the results will be either very positive or extremely negative, depending on where you stand when the smoke clears.
Monday, April 07, 2014
Why Keynesian Economists Don’t Understand Inflation / Economics / Inflation
By: Frank_Hollenbeck
The “monetary cranks” and “ignorant zealots” of old are back preaching salvation if only we had more inflation.[1] Keneth Roggoff and Fed President Charles Evans did not mince words, while others have been more circumspect. Christine Lagarde warns us of the “ogre of deflation” and the “risks” of low inflation, while others have been urging easier monetary policy to reduce the value of the yen or the euro. Of course, it’s much easier to let this inflation tiger out of its cage than to get it back in.
Sunday, April 06, 2014
Inflation Hysteria And The Revenge Of Central Banksters / Economics / Inflation
By: Andrew_McKillop
Christine Lagarde Wants “Low-Flation”
Lagarde has been rightly ridiculed and accused of “jabberwockery”, for example by David Stockman who also says that what she calls plain good sense, is “pure Keynesian claptrap”. She opines that one of her sincerest and enduring concerns for the global economy moving forward, is that “low-flation” especially in the Eurozone countries will or might suppress growth and jobs. So of course she is rooting for more Fed-style and ECB-style and BOJ-style, and BOE-style monetary easing. Print and forget!
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Friday, April 04, 2014
Meet "Lowflation": Deflation's Scary Pal / Economics / Inflation
By: Peter_Schiff
In recent years a good part of the monetary debate has become a simple war of words, with much of the conflict focused on the definition for the word "inflation." Whereas economists up until the 1960's or 1970's mostly defined inflation as an expansion of the money supply, the vast majority now see it as simply rising prices. Since then the "experts" have gone further and devised variations on the word "inflation" (such as "deflation," "disinflation," and "stagflation"). And while past central banking policy usually focused on "inflation fighting," now bankers talk about "inflation ceilings" and more recently "inflation targets". The latest front in this campaign came this week when Bloomberg News unveiled a brand new word: "lowflation" which it defines as a situation where prices are rising, but not fast enough to offer the economic benefits that are apparently delivered by higher inflation. Although the article was printed on April Fool's Day, sadly I do not believe it was meant as a joke.
Monday, March 31, 2014
Inflation Is Coming, What to Do NOW! / Economics / Inflation
By: Jeff_Clark
We’ve all heard of the inflationary horrors so many countries have lived through in the past. Third-world countries, developing nations, and advanced economies alike—no country in history has escaped the debilitating fallout of unrepentant currency abuse. And we expect the same fallout to impact the US, the EU, Japan, China—all of today’s countries that have turned to the printing press as a solution to their economic woes.
Now, it seems obvious to us that the way to protect one’s self against high inflation is to hold one’s wealth in gold… But did citizens in countries that have experienced high or hyperinflation turn to gold in response? Gold enthusiasts may assume so, but what does the data actually show?
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Wednesday, March 26, 2014
Will Inflation Make A Comeback In 2014 When Consensus Worries About Deflation / Economics / Inflation
By: GoldSilverWorlds
Two months ago, Incrementum Liechtenstein released its chartbook entitled “Monetary Tectonics” which illustrated the raging war between inflation and deflation in 40 charts. Meantime, the authors of the chartbook have launched the “Austrian Economics Golden Opportunities Fund,” a fund that takes investment positions based on the level of inflation. The key tool in their investment decisions is the “Incrementum Inflation Signal” (also referred to as the “monetary seismograph”), a continuing measurement of how much monetary inflation reaches the real economy based on a series of market-based indicators.
Monday, March 17, 2014
Inflation Does Not Produce Economic Growth / Economics / Inflation
By: Frank_Shostak
After settling at 3.9 percent in July 2011 the yearly rate of growth of the consumer price index (CPI) fell to 1.6 percent by January this year. Also, the yearly rate of growth of the consumer price index less food and energy displays a visible downtrend falling from 2.3 percent in April 2012 to 1.6 percent in January.
On account of a visible decline in the growth momentum of the consumer price index (CPI) many economists have concluded that this provides scope for the US central bank to maintain its aggressive monetary stance.
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Wednesday, March 12, 2014
We Are All Inflation Lab Rats Now / Politics / Inflation
By: Fred_Sheehan
"They sit there across the Pond, and sometimes I think they feel like they're in a lab and they're running experiments on rats and not understanding the consequences of what they are doing," the Russian president said at a press conference." ~ Russian President Vladimir Putin, March 4, 2014
Adam Posen, co-author with Ben S. Bernanke of Inflation Targeting: Lessons from the International Experience gave a thumbs up to the Japan's inflation-targeting experiment in the February 25, 2014, Financial Times: "Abe Has Good Medicine but Japan Needs a Stronger Dose." The heavyweight (literally) economist opens: "Japan's recovery program is showing promising early results." Results include the falling currency that has led a creditor country (Japan has been a net lender since 1981) to post whopping trade deficits in recent months, of increasing size.
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Thursday, March 06, 2014
How Inflation Destroys the Wealth of Nations / Economics / Inflation
By: Joseph_T_Salerno
Brendan Brown is a rara avis — a practicing financial economist and shrewd observer of financial markets, players, and policies, whose prolific writings are informed by profound theoretical insight. Dr. Brown writes in plain English yet can also turn a phrase with the best. “Monetary terror” vividly and succinctly characterizes the policy of the Fed and the ECB (European Central Bank) to deliberately create inflationary expectations in markets for goods and services as a cure for economic contraction; the “virus attack” of asset price inflation well describes the unforeseeable suddenness, timing, and point of origin of asset price increases caused by central bank manipulation of long-term interest rates and the unpredictable and erratic path the inflation takes through the various asset markets both domestically and abroad.
Saturday, January 18, 2014
Why Central Bankers Should Not Tinker with Aggregate Prices / Economics / Inflation
By: MISES
Frank Hollenbeck writes: In November, the ECB (European Central Bank) surprised the markets by dropping its refinancing rate to 0.25 percent to avoid dreaded deflation, and announced it seeks to keep “price growth steady at about 2 percent” which is obviously a target and not a ceiling. Recently-tame inflation data is “worrisome” for many economists and has increased calls for the ECB to be even more aggressive. Central bankers and economists remain committed to the idea that the economy can be managed by manipulating prices in the aggregate.
Wednesday, January 15, 2014
Incompetent Bank of England Celebrates Inflation Success for 1 Month out of 50 / Economics / Inflation
By: Nadeem_Walayat
The Bank of England and Coalition Government politicians were accompanied by hip hip hurray cheers right across the mainstream media as all were found celebrating the good news that the the Bank of England has achieved its primary remit for the targeting of 2% CPI Inflation for December 2013 data (RPI 2.7%, Real 3.6%), the first time the central bank has achieved its official target for the duration of the Coalition government as the CPI inflation rate has spent the whole of this parliament well above the target, ranging as high as 5.2% as illustrated by the graph below.
Sunday, January 12, 2014
Inflation via QE - The Malachi Crunch Continues 2014 / Economics / Inflation
By: Andy_Sutton
Those of you who have known me any length of time know that I love to say ‘they always tell you what they’re going to do’. I had a really scintillating discussion yesterday with two fellow economists as to why that might be and we’ll shelve that for now, but let’s just say this: ‘they’ are at it again. Last week I referenced an IMF working paper penned by Harvard dynamic duo Ken Rogoff and Carmen Reinhart regarding asset confiscation and other ways to wiggle our way our the current economic morass that we find ourselves in. This week I’m going to perform a full dissection because there is material in there that you simply cannot go on without knowing if you expect to salvage even a shred of your financial state as it exists today.
Tuesday, January 07, 2014
U.S. Dollar Crisis Inflation Hammer 2014 / Currencies / Inflation
By: Videos
Economist John Williams thinks 2014 will mark the beginning of hyperinflation. Williams contends, “You are going to see, early on, a crisis in the dollar that will start to trigger the inflation . . . as the inflation picks up, that’s going to savage the economy, which is already in a depression. It never recovered.” Forget what you have heard about the so-called recovery. Williams says, “The consumer is in trouble. There is nothing happening to turn the economy around.” The weak economy is bad news for the dollar. According to Williams, “Anything that would suggest deficit deterioration here, and a weak economy would do that, will have a devastating impact on the dollar.” And if foreigners start selling some of the 12 trillion U.S. dollar based assets, such as bonds and currency, things will turn ugly fast. Williams says, “We’re dependent on the rest of the world continuing to go along with us and continue to support the dollar.
Saturday, December 21, 2013
After the QE Taper: The Fed’s Non-Plan Is Unchanged / Economics / Inflation
By: MISES
Frank Hollenbeck writes: As an economist, it is getting more difficult to understand the logic underlying current monetary policy in the U.S. There are two main channels by which economists think monetary policy can influence growth and employment. The first is to lower interest rates to spur investment and consumption spending. The second is to induce inflation so real wages drop, spurring output and employment.
Wednesday, December 18, 2013
Inflation in the United States - Keeping it Real! / Economics / Inflation
By: James_Quinn
“One only needs to reflect on the dramatic decline in the value of the dollar that has taken place since the Fed was established in 1913. The goods and services you could buy for $1.00 in 1913 now cost nearly $21.00. Another way to look at this is from the perspective of the purchasing power of the dollar itself. It has fallen to less than $0.05 of its 1913 value. We might say that the government and its banking cartel have together stolen $0.95 of every dollar as they have pursued a relentlessly inflationary policy.” - Ron Paul – End the Fed
The BLS reported the CPI this morning. They tell me that inflation is well contained and has only risen by 1.2% in the past twelve months. Our beloved Federal Reserve chairman is worried inflation is too low. It is fascinating that the only people worried about inflation being too low are Ivy League educated economists and bankers whose wealth depends upon the middle class sinking further into poverty.
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Friday, December 13, 2013
Venezuela’s High Inflation Playbook: The Communist Manifesto / Politics / Inflation
By: Steve_H_Hanke
t seems as though each passing day brings yet another piece of bad economic news coming out of Venezuela. For months, I have been tracking the decline of Venezuela’s economy and its currency, the bolivar. As if a collapsing currency, and the resulting inflation and empty shelves weren’t bad enough, Venezuela is now struggling with massive blackouts. Forget the Whig interpretation of history; Venezuela supports the schoolboys’ interpretation: “it’s just one damn thing after another.”Read full article... Read full article...
Thursday, December 05, 2013
Is U.S. Inflation Running at 7.7%? / Stock-Markets / Inflation
By: Profit_Confidential
Michael Lombardi writes:
Can you believe this?
The Bureau of Labor Statistics (BLS) reports the U.S. economy experienced deflation in October. The Consumer Price Index (CPI), a widely followed government measure of inflation, declined 0.1% in October.
The Producer Price Index (PPI), which measures the change in prices that producers pay, also declined in October—by 0.2%, continuing its slide from September when it declined 0.1%. (Source: Bureau of Labor Statistics web site, last accessed December 2, 2013.)
Tuesday, December 03, 2013
Inflation - Gasoline $1/Gallon / Stock-Markets / Inflation
By: Don_Miller
My children will never let me forget this: while on a Carter-era family vacation to Florida, I pulled into a gas station and abruptly drove off, announcing, "I'll be damned if I will pay $1/gallon for gasoline." With each passing mile on I-75, the prices got higher and I became even more frustrated. Finally, I had no choice but to pay the price because the car was running on fumes. Then I watched the kids snicker in the backseat as I pumped the gas.
Saturday, November 30, 2013
The Economist's Sell Signal / Stock-Markets / Inflation
By: Fred_Sheehan
The disintegration of central banking shifted to overdrive in November. The Senate Banking Committee's listless accreditation of Janet Yellen as next Fed chairman was not a surprise, but it was notable that vigorous critics of Chairman Bernanke, such as Senator Bob Corker, dozed through the hearing. When the bubble of all bubbles bursts, and the Senate and Congressional oversight committees fulminate at central bankers, it will be those politicians who should sit in the dock. They could have acted. Instead, the Senate is whisking Bernanke-Squared to the throne, as quickly and quietly as possible.
Friday, November 29, 2013
Inflation, Shortages, and Social Democracy in Venezuela / Economics / Inflation
By: Matt_McCaffrey
The economic turmoil in Venezuela has received increasing international media attention over the past few months. In September, the toilet paper shortage (which followed food shortages and electricity blackouts) resulted in the “temporary occupation” of the Paper Manufacturing Company, as armed troops were sent to ensure the “fair distribution” of available stocks. Similar action occurred a few days ago against electronics stores: President Nicolás Maduro accused electronics vendors of price-gouging, and jailed them with the warning that “this is just the start of what I’m going to do to protect the Venezuelan people.”
Thursday, November 28, 2013
The Fed Must Inflate or Die / Economics / Inflation
By: MISES
Chris Martenson writes: The Fed is busy doing everything in its considerable power to get credit (that is, debt) growing again so that we can get back to what it considers to be “normal.”
But the problem is that the recent past was not normal. You may have already seen this next chart. It shows total debt in the U.S. as a percent of GDP:
Friday, November 22, 2013
Fed-induced Inflation - Pushing on a Rope or Lighting a Short Fuse / Economics / Inflation
By: Dr_Jeff_Lewis
Many regard the risk of inflation as low, since the Fed's money distribution or credit mechanism is limited by how the banks decide to lend. While credit worthy businesses and consumers are still de-leveraging, the transmission mechanism will eventually come. This will occur, for the most part, thanks to the Treasury.
So then how can the Fed push money into the economy?
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Saturday, November 16, 2013
Venezuela’s House of Cards Inflation Trending Towards Hyperinflation / Economics / Inflation
By: Steve_H_Hanke
The story of the Venezuelan economy and its troubled currency, the bolivar, can be summed up with the following phrase: “From bad to worse”—over and over again. Yes, the ever deteriorating situation in Venezuela has taken yet another turn for the worse.
In a panicked, misguided response to the country’s economic woes, Venezuelan president Nicolas Maduro has requested emergency powers over the economy. And the Maduro government recently announced plans to institute a new exchange rate for tourists in an attempt to quash arbitrage-driven currency smuggling.
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Wednesday, November 13, 2013
When Inflation Strikes Back / Stock-Markets / Inflation
By: Clif_Droke
Is there such thing as too little inflation? To listen to some economists the answer is an emphatic “no!” Fed chief Ben Bernanke certainly doesn’t believe in the concept of low inflation. Neither does ECB president Mari Draghi. But the question must be asked: with so much official opposition to low inflation, how will America’s middle class ever fully recover from its current malaise?Read full article... Read full article...
Wednesday, November 13, 2013
The Language of Inflation / Economics / Inflation
By: John_Mauldin
My good friend Dylan Grice takes a very interesting tack in the latest issue of his Edelweiss Journal, today's Outside the Box. Rather than attacking our macroeconomic problems directly with economic tools, he approaches them from the point of view of what he calls a "subtle but significant devaluation of language." Now, you might think that the words we use to describe and understand the economy are not in themselves very powerful economic determinants, but Dylan lays out a convincing case to the contrary.
Dylan has fun with a Google app called Ngram Viewer, which allows users to search for the occurrence of words or phrases (or n-grams, which are combinations of letters) in 5.2 million books published between 1500 and 2008, containing 500 billion words, in American English, British English, French, German, Spanish, Russian, and Chinese.
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Tuesday, November 12, 2013
Europeans Looking To Inflate Their Debts Away / Economics / Inflation
By: MISES
Andrew Cullen writes: There was relatively good news for consumers in the Eurozone last week. Data released for the consumer price index (CPI) during October showed that the rate of inflation fell from 1.1 percent to 0.7 percent.
At a time when unemployment is high and increasing and taxation is on the rise, this brings some small relief to cash-strapped households whose real disposable incomes have been in decline for at least 5 years. It’s only a small relief. The CPI is designed in such a way as to deliberately exclude key consumer necessities like food and energy which, if included, would push the measured price inflation rate higher.
Monday, November 11, 2013
Chained CPI Inflation Chains Taxpayers / Politics / Inflation
By: Dr_Ron_Paul
One of the least discussed, but potentially most significant, provisions in President Obama's budget is the use of the "chained consumer price index" (chained CPI), to measure the effect of inflation on people's standard of living. Chained CPI is an effort to alter the perceived impact of inflation via the gimmick of "full substitution." This is the assumption that when the price of one consumer product increases, consumers will simply substitute a similar, lower-cost product with no adverse effect. Thus, the government decides your standard of living is not affected if you can no longer afford to eat steak, as long as you can afford to eat hamburger.
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Tuesday, November 05, 2013
Inflation Has Not Cured Iceland’s Economic Problems / Economics / Inflation
By: David_Howden
No two countries’ responses have polarized commentators over the past five years more than the contrasting post-crisis policies in Iceland and Ireland.
In a paper published in Economic Affairs (available here as a PDF) I contrast the policies enacted by Iceland and Ireland, perhaps the two countries most affected by the liquidity freeze of 2008. A common conclusion has been that one country did everything right and the other did everything wrong, however, I take a more pragmatic approach. There are some positive aspects in each case, and other aspects we can do without.
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Thursday, October 31, 2013
A Long-Term Look at Inflation / Economics / Inflation
By: PhilStockWorld
Courtesy of Doug Short: The October 2013 Consumer Price Index for Urban Consumers (CPI-U) released today puts the September year-over-year inflation rate at 1.18%, less than third the 3.90% average since the end of the Second World War and 51% lower than its 10-year moving average.
For a comparison of headline inflation with core inflation, which is based on the CPI excluding food and energy, see this monthly feature.
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Wednesday, September 25, 2013
Iran Rouhani Delivers Lower Inflation, and other Troubled Currencies Project Updates / Economics / Inflation
By: Steve_H_Hanke
Iran: Prior to Hassan Rouhani’s election as Iran’s new president in June, the black-market Iranian rial to U.S dollar (IRR/USD) exchange rate stood at 36150, implying an annual inflation rate of 109 percent (June 15th 2013). Since Rouhani took office, Iranian expectations about the economy have turned positive, or at least less negative, and the black-market IRR/USD exchange rate has strengthened to 29200. In consequence, the implied annual inflation rate has fallen like a stone, and currently sits at 20 percent. That’s even lower than the most recent official annual inflation rate of 35.1 percent. (August 2013).
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Saturday, September 14, 2013
The Silent Assassin Of The U.S. Economy / Economics / Inflation
By: Clif_Droke
When most people think about the biggest threats to the U.S. economy they usually mention things like the budget deficit, the national debt or the trade gap. What rarely gets mentioned as a potential economy killer is something we all have to face every day yet mainstream economists refuse to acknowledge it.
The biggest problem in the economy isn't the excessive amount of public or private debt; it's the extremely high level of prices for basic commodities like food and fuel. Economists consistently underestimate how much of the middle class worker's paycheck goes to buying these two essential needs. For all of its successes, the Fed's QE program did nothing to alleviate high retail food and fuel prices. If anything, it may have actually increased them.
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Friday, September 13, 2013
Inflation, Stealth Taxes Consume Stock Gains & Retirement Plans / Personal_Finance / Inflation
By: Dan_Amerman
Why is there a fundamental mismatch between stock market performance as reported in financial headlines – and the actual retirement behavior of the many millions of Americans who own those stocks in their portfolios?
Using 15 years of stock market performance data and the type of analysis tools used by sophisticated wealth management professionals, we will solve that mystery in this research-based tutorial. The results may come as a major surprise, even for well read and financially literate investors who have been buying stocks for decades.
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Wednesday, September 04, 2013
Fear the Inflation / Economics / Inflation
By: Michael_Pento
While officials from the Federal Reserve gather recently in Jackson Hole Wyoming to bemoan that inflation isn’t yet high enough for their liking, the truth is that inflation is already ravaging the middle class.
To prove my point, the government’s official reading on core CPI inflation (one of the Fed’s preferred metrics that removes food and energy prices) increased just 1.7% from July 2012. So, in the mind of those who control the value of our currency, inflation is well below their target of 2%; and therefore needs to be increased.
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Tuesday, September 03, 2013
3 Ways Inflation Destroys an Economy / Economics / Inflation
By: Richard_Moyer
If Batman has the Joker, I have inflation. Inflation, my great and worthy opponent, has shown me yet another side of his wicked, wealth-destroying ways. Let's have a look.
Wednesday, August 21, 2013
Inflation - Deflation Confusion, Financial Reality Hidden By Commonly Used Theory and Jargon / Economics / Inflation
By: Dan_Amerman
As we will explore in this analysis, when we look at two of the largest sources of net worth in the United States – housing and stocks – then what history shows us is that for 22 out of the 40 years between 1972 and 2012, much of the truth about financial performance has been almost invisible to people who have been relying on the most commonly used definitions for inflation and deflation.
That is, most people phrase the question as being one of either a) inflation, or b) deflation, meaning it has to be one or the other and obviously can't be both together. As we will explore using simple to follow, round number examples, taking this seemingly common sense approach leaves us unable to distinguish between a 20% gain, a 20% loss and a 94% loss.
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Friday, August 09, 2013
A Monetary Master Explains Inflation / Economics / Inflation
By: Terry_Coxon
[Ed. note: One of the best things about being a partner in a research firm employing about 40 analysts is that I have unfettered access to really smart people. While we have a great team with expertise across the spectrum, when it comes to monetary matters, my go-to guy is Terry Coxon, a senior editor for our flagship publication, The Casey Report.
Saturday, August 03, 2013
Ruinous Inflation Proposals Mean America Will Be Zimbabwe 2 / Politics / Inflation
By: Michael_S_Rozeff
In this day and age, one should never assume that “educated” persons, especially those who have “earned” advanced degrees in economics, know the least bit of economics or possess the least bit of sense that might steer them away from the refuse that passes for economic thought. This is especially true in the case of those who propose ruinous money policies, thereby joining the ranks of monetary cranks and demonstrating to one and all an economics IQ south of 25.
Friday, August 02, 2013
Ravenous Vampire-Hounds Of Inflationary Hell / Economics / Inflation
By: Richard_Daughty
Thinking back on it, I see that I was, indeed, “on the edge” of going, as I seem to routinely be these days, completely berserk about how the evil Federal Reserve is creating so irresponsibly much, so staggeringly much, so impossibly much, so disastrously much excess currency and credit that We’re Freaking Doomed (WFD) to ruination and complete bankruptcy by the unstoppable inflation in prices, crushing weight of unpayable debt and a monstrous, suffocating government.
Friday, July 19, 2013
Are Higher Oil Prices About to Set Off an Inflationary Spiral? / Economics / Inflation
By: Money_Morning
Dr. Kent Moors writes: There is a long-held belief that significant increases in oil prices are harbingers of building inflationary pressures.
It follows from the observation that a market able to absorb more expensive oil is also one where prices are rising elsewhere.
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Friday, July 12, 2013
Inflation - The Real Thing / Economics / Inflation
By: Fred_Sheehan
"[T]he concept of the general price level is extremely vague and we cannot even speak of a very approximate determination of the average price level. Every index number is to a certain extent arbitrary: the selection of the commodities that are to be included, the choice of the weighting, the base from which the index starts, and, lastly, the mathematical processes applied, are all arbitrary..."
Read full article... Read full article...-Wilhelm Röpke, Crises and Cycles, 1936
Thursday, July 11, 2013
No U.S. Inflationary Risk, Banks May Shrink Balance Sheets / Economics / Inflation
By: Bloomberg
BlackRock CEO Larry Fink joined Bloomberg Television's Erik Schatzker and Sara Eisen on "Market Makers" today and said he does not see any inflationary risk in the United States. Fink went on to say that banks may shrink balance sheets on rules requiring financial companies to have higher capital ratios: "If they shrink their balance sheet, we're going to have a more aggravated problem in the future because banks are the largest owner of U.S. Treasuries."
During the hour-long interview, Fink gave insights on China, emerging markets, the bond market, the role the wants BlackRock to play in the market, and his thoughts on Ben Bernanke, Hillary Clinton and President Obama.
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Tuesday, July 02, 2013
Syria’s Annual Inflation Hits 200% / Economics / Inflation
By: Steve_H_Hanke
In an attempt to beat Western sanctions and halt the fall in the Syrian pound, the Assad regime – with the help of Iran, Russia, and China – has begun conducting all of its business in rials, roubles, and renminbi. This decision supplements other existing arrangements between Syria and its allies that are keeping the Syrian economy on life-support. These include transfers of $500 million per month in oil and an unlimited credit line with Tehran for food and oil-product imports.
Saturday, June 29, 2013
The Misunderstood Link Between Crude Oil, Natural Gas and Inflation / Commodities / Inflation
By: Money_Morning
Dr Kent Moors writes:
According to conventional wisdom, there can't be a significant rise in inflation without a corresponding, and usually preceding, jump in energy prices.
In fact, the correlation between energy prices and inflation has become almost a mantra among some market pundits.
Unfortunately, the reality is somewhat different than what's portrayed by talking heads in thirty- second sound bites.
Read full article... Read full article...
Friday, June 14, 2013
What's Going on with Inflation Today... and What to Do About It / Economics / Inflation
By: DailyWealth
Dr. David Eifrig writes: Every month, about 300,000 Americans celebrate their 65th birthday. This is the age most of us think of when we hear "retirement."
The arch nemesis of those newly minted retirees is inflation.
Most folks looking to retire need safe investment income. This traditionally comes from owning bonds, which pay a fixed rate. But if your income stream is fixed... and the price of goods and services shoots higher... your cash stream is worth less. If you're relying on that income for your retirement, you could be in trouble.
Thursday, June 13, 2013
Iran’s Inflation Bogey / Economics / Inflation
By: Steve_H_Hanke
With Friday’s Iranian Presidential election fast approaching, there has been a cascade of reportage in the popular press about that opaque country. When it comes to economic data, Iran has resorted to lying, spinning and concealment – in part, because of its mores and history, and more recently, the ever-tightening international sanctions regime. In short, deception has been the order of the day.
Tuesday, June 11, 2013
Here's Your Inflation / Economics / Inflation
By: Michael_Pento
Wall St. Pundits have summarily exculpated Ben Bernanke from the negative effects derived from artificial interest rates and massive increase in the Fed's balance sheet. Specifically, most market commentators now claim with certainty that the central bank's unprecedented manipulation of markets has been done without creating any inflation.
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Friday, May 24, 2013
Is the United States the Next Argentina? Part 2 / Economics / Inflation
By: Money_Morning
Garrett Baldwin writes: As I wrote yesterday, government interventions in the marketplace and out of control cronyism have decimated Argentina, one of the most prolific economies of the early 20th century.
But after my week spent there, I can tell you the people of Argentina face an even more troubling problem. It's out of control inflation and it continues to grow worse.
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Tuesday, May 21, 2013
Inflation Is The Lifeblood Of A Healthy Economy / Stock-Markets / Inflation
By: I_M_Vronsky
Inflation Is To An Economy What Blood Pressure Is To The Human Body
It is a well-known medical fact that more people die from LOW BLOOD PRESSURE then from high blood pressure.
Therefore, if one accepts the premise that Inflation is to an Economy what Blood Pressure is to the Human Body, it then logically follows that low inflation rate over a protracted period will eventually and inevitably destroy a heretofore healthy economy.
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Tuesday, May 14, 2013
How the Fed Undermines the Econcomy - Stable Prices, Unstable Markets / Economics / Inflation
By: Frank_Shostak
According to European Central Bank Governing Council member Ewald Nowotny, Federal Reserve Chairman Ben Bernanke sees no risk of inflation in the United States. According to Nowotny, Bernanke had given a “very optimistic” portrayal of the US outlook.
“They see absolutely no danger of an expansion in inflation,” Nowotny said. Bernanke had said US inflation should be 1.3 percent this year.
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Saturday, May 11, 2013
Wage Inflation - A Bond Bull Turns Bearish / Economics / Inflation
By: John_Mauldin
"The large shortfall of employment relative to its maximum level has imposed huge burdens on all too many American households and represents a substantial social cost. In addition, prolonged economic weakness could harm the economy's productive potential for years to come. The long-term unemployed can see their skills erode, making these workers less attractive to employers. If these jobless workers were to become less employable, the natural rate of unemployment might rise or, to the extent that they leave the labor force, we could see a persistently lower rate of labor force participation." - Janet L. Yellen, Vice-Chair, US Federal Reserve, March 4, 2013
Friday, May 10, 2013
Symptoms Don't Lie, The Economic Patient is Getting Sicker / Economics / Inflation
By: Peter_Schiff
A good doctor will not simply make a diagnosis based on measurements. The symptoms and complaints expressed by the patient are at least as important in making a determination as the data provided by diagnostic tools. When the data says one thing and the symptoms continuously say another, it makes sense to question the reliability of the instruments. This would be particularly true if the instruments are furnished by a party with a stake in a favorable diagnosis, say an insurance company on the hook for treatment costs. The same holds true for the U.S. economy. Although our government-supplied data suggests we are experiencing low inflation and modest economic growth, the economy shows symptoms of low growth, rising prices, and diminishing purchasing power.
Friday, May 10, 2013
Long-Term Investors in Danger From Higher Inflation Expectations? / Interest-Rates / Inflation
By: InvestmentContrarian
Sasha Cekerevac writes: One of the biggest concerns for investors when it comes to long-term investing is the safe return of their capital. Following the 6.75% levy imposed by Cyprus on deposits of less than 100,000 euros, many investors were shocked that such an event could take place.
Certainly, long-term investing does have risks, including a hidden hazard of the possibility that a rising inflation rate will erode wealth just as easily as the levy imposed by Cyprus on bank deposits.
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Tuesday, May 07, 2013
What Chained CPI Inflation Really Means To You / Economics / Inflation
By: Money_Morning
Jason Jenkins writes: When U.S. President Obama released his 2014 budget proposal last month, many Americans who paid attention to the details needed a measurement he used - "chained CPI" - explained.
That's because President Obama used chained CPI (consumer price index) to help shave off more than $1 trillion from spending on government programs.
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Saturday, May 04, 2013
Government Crooks Responsible for the Greatest Wealth Transfer in History / Politics / Inflation
By: Bill_Bonner
Last night, six of us went out to dinner at one of the nicest restaurants in Salta. We ordered two bottles of good Laborum cabernet sauvignon. We had beefsteaks, dessert and coffee. The bill came to 1,058 Argentine pesos (about $200).
Was that a lot... or a little?
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Monday, April 29, 2013
How to Protect Your Portfolio from Inflation Without Gold / Stock-Markets / Inflation
By: DailyGainsLetter
Moe Zulfiqar writes: Inflation is when the general price level increases. As a result, purchasing power diminishes; simply stated, every dollar buys less than it did before. Central banks around the world, including the Federal Reserve, continuously try to tame inflation so that it doesn’t get out of control, usually targeting for an inflation rate of anywhere from one to three percent.
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Thursday, April 11, 2013
Why Governments Lie About Inflation? Because It Covers Up Bigger Lies / Economics / Inflation
By: Graham_Summers
More and more analysts are catching on to the fact that Government measures of inflation are phony. The US Government tells us that inflation, as measured by the CPI, is 0.8%. This is largely a work of fiction however as the actual cost of goods purchased by consumers has increased.
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Wednesday, April 03, 2013
Zombie Parasites vs. Productives, Turning Argentine / Economics / Inflation
By: Bill_Bonner
Here in Argentina, most things were closed on Monday for the Easter holidays... and are closed again today, too.
What do these Argentines think they are? French?
We wandered the streets. Here in the Palermo Soho neighborhood of Buenos Aires, where we are staying, there were thousands of people window-shopping, eating in restaurants and drinking in outdoor cafes.
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Friday, March 29, 2013
Preparing for Inflationary Times / Economics / Inflation
By: Jeff_Clark
"All this money printing, massive debt, and reckless deficit spending – and we have 2% inflation? I'm beginning to believe that either the deflationists are right, or the Fed's interventions are working." – Anonymous Casey Research reader
The CPI, in our view, does not accurately measure inflation, which accounts for some of the discrepancy our reader is pointing out. However, the proper definition of inflation is "an increase in the quantity of money," which we've had in spades. We've not experienced the concomitant increase in prices, which is what we're addressing in this article.
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Friday, March 29, 2013
The Real U.S. Inflation Rate and What to Do About It / Economics / Inflation
By: Don_Miller
A little over a month ago we did a quick poll on what our readers thought the real rate of inflation was. The idea for polling our readers came from the disconnect between the official government rate of around 1% and what some had told me they were experiencing first hand.
Thank you to everyone who participated, particularly those who shared frustrating examples of the ever-increasing cost of living. There were close to 100 pages of reader comments, and I read them all... every single word.
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Wednesday, March 27, 2013
What Does 8% Inflation Really Mean? / Personal_Finance / Inflation
By: Don_Miller
Eight percent is not good news. In my latest article I shared some reader feedback from our inflation survey, and in case you missed it, the Money Forever Reader Poll Inflation Rate is 8%. But what does that number really mean for us – seniors and savers trying to protect our buying power? It's time to read the tea leaves and find out.
Saturday, March 23, 2013
Is The Government Lying To Us About Inflation? Yes! / Economics / Inflation
By: John_Mauldin
In today’s Outside the Box, Gary D. Halbert (my old and very dear friend and former business partner of many years) reminds us about a few significant facts concerning the Consumer Price Index (CPI) that mainstream economists and the media tend to ignore. The central question is whether the CPI is really indicative of the actual inflation rate. Not likely, says Gary, since the US Bureau of Labor Statistics (BLS), which compiles the CPI, has engaged in methodological shenanigans over the past couple decades (as has been well documented by John Williams of ShadowStats, among others). The upshot of all their monkeying with the numbers is that the official rate of inflation may be two to four times lower than the actual rate (which is rather convenient if you’re a government bureaucrat trying to hold down interest costs and Social Security payments).
Sunday, March 17, 2013
The Biggest Lie Ever Sold to the American Public / Politics / Inflation
By: Graham_Summers
The US has been lying to all of us for decades now.
We’re not talking about some kooky conspiracy theory… we’re talking about INFLATION.
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Saturday, March 16, 2013
A Long-Term Look at U.S. Inflation / Economics / Inflation
By: PhilStockWorld
Doug Short writes: The March 2012 Consumer Price Index for Urban Consumers (CPI-U) released today puts the February year-over-year inflation rate at 1.98%, about half the 3.92% average since the end of the Second World War.
For a comparison of headline inflation with core inflation, which is based on the CPI excluding food and energy, see this monthly feature.
Read full article... Read full article...
Thursday, March 14, 2013
China Sounds Warning Bell For What’s Coming Our Way / Economics / Inflation
By: Graham_Summers
Let’s wind the clock back to 2008.
The world was thought to be ending. Lehman went bust. Markets were plunging. Everyone was scared that growth was over. It was as though the global economy was grinding to a halt.
But then China’s stock market bottomed. The Chinese Government announced a massive stimulus plan to turn its economy around. And sure enough the Chinese economy took off again.
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Wednesday, March 13, 2013
Can the U.S. Learn From Argentina's Hyper Inflation Economic Chaos? / Economics / Inflation
By: John_Mauldin
(From Cafayate, Argentina) There are some who worry whether the path that Argentina has taken to monetary ruin on multiple occasions (and that it seems intent on taking again) is one that the US may also find itself on. That worry has crossed my mind a few times, I must confess. Today we will look at Argentina more in depth. From a monetary perspective, it deserves attention. And once again there will be opportunity.
Let me jump right to the conclusion: Just as Spain is not Greece, because each chose a unique route to economic malaise, the US is not Argentina. We are perfectly capable of avoiding Argentina’s problems while cooking up ones that are all our own. But there are some worrisome and potentially instructive issues in Argentina.
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Monday, March 11, 2013
The Relationship Between Money and Prices / Economics / Inflation
By: Alasdair_Macleod
Money printing The quantity theory of money and its accompanying equation of exchange are generally accepted as defining the relationship between money and prices. The equation has been expressed a number of ways, always including “velocity of circulation”, which is a variable essential to balance the equation.
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Wednesday, March 06, 2013
First Record Dow High, Then Record Gas And Grocery Prices / Stock-Markets / Inflation
By: Jeff_Berwick
Gary Gibson writes: Ben Bernanke must have been smirking and nodding smugly all day yesterday. The Dow hit an all-time high at 14,286 and closed at 14,253.77. What's even more impressive is that this is double where the Dow stood just four years ago. And it only took five and a half years and previously unmatched amounts of new money creation to do it.
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Wednesday, March 06, 2013
An Infinite Amount of Money, Et Tu, Italy? / Economics / Inflation
By: John_Mauldin
The three major blocs of the developed world are careening toward a debt-fueled denouement that will play out over years rather than in a single moment. And contrary to some opinion, there is no certain ending. There are multiple paths still available to Europe and especially the US, though admittedly none of them are bright and carefree. There are very few paths available to Japan, as they have skipped too far down the yellow brick road of debt. None of Japan’s remaining paths have good endings. In the US, even as numerous voices declaim on the crisis that awaits if we don’t act, there is seemingly no collective will to actually do anything as yet. Perhaps it will take… a crisis. In Europe, the peripheral countries can already be said to be in crisis.
Tuesday, March 05, 2013
The Inflation Secrets Your Broker Won’t Tell You About / Stock-Markets / Inflation
By: Graham_Summers
The US Government and the US Federal Reserve downplay the threat of inflation. There are two primary reasons for this:
1) Acknowledging higher inflation would mean both revising GDP growth much lower (last quarter’s FDP growth would have been negative 1% if you accounted for the real increase in costs of living).
2) One of the primary arguments the Fed uses for why it can print hundreds of billions of Dollars without hurting consumers it because inflation remains “contained” or “transitory.”
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Thursday, February 28, 2013
Is Inflation the Legacy of the Federal Reserve? / Economics / Inflation
By: Mike_Shedlock
In testimony to Congress on February 27, Bernanke bragged that inflation under his and Greenspan's watch was a mere 2% a year.
Of course Bernanke ignored a housing boom and bust. He also ignored a a dotcom boon and bust, a global financial crisis, numerous bank bailouts, and a policy of "too big to fail" that is now "even bigger".
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Monday, February 25, 2013
Out of Control U.S. Government Spending Means It's Time to Hedge Against Inflation / Commodities / Inflation
By: Money_Morning
Jeff Uscher writes: Uncontrolled government spending could force the Fed to monetize the government's debt, creating runaway inflation, former Federal Reserve Governor Frederic Mishkin warned in a report.
If these circumstances were to occur, the Fed would be unable to do much, if anything, to control inflation, Mishkin said in the report, presented at a conference at the University of Chicago Booth School of Business.
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Thursday, February 14, 2013
Why Inflation in 2013 Is Imminent / Economics / Inflation
By: Money_Morning
Jeff Uscher writes: Is a spike in the monetary base - currency in circulation plus bank reserves at the Fed - the first sign of imminent inflation?
Art Cashin, the well-respected director of floor operations at the New York Stock Exchange for UBS, recently told King World News the increase in the monetary base may well be a sign of impending inflation.
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Wednesday, January 30, 2013
Why There's No Real Inflation - Yet / Economics / Inflation
By: Money_Morning
Martin Hutchinson writes: According to Milton Friedman, "inflation is always and everywhere a monetary phenomenon."
If that is true, then you have to wonder where the heck all of the inflation is.
Every central bank in the Western world is holding interest rates down, and almost all of them are printing money like it's going out of style.
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Friday, January 18, 2013
Dallas Fed - We Don't Want Inflation To Raise Its Ugly Head / Economics / Inflation
By: Bloomberg
Dallas Federal Reserve president Richard Fisher told Bloomberg Television's Michael McKee today that the one thing everyone at the Fed agrees on is that "we don't want inflation to raise its ugly head." Fisher said that "as perhaps the most hawkish member of the Fed when it comes to inflation," he doesn't "see that prospect right now."
Fisher also said that community and regional banks need a "level playing field" and that "I do not dislike Jamie Dimon or Lloyd Blankfein. My children are friends with Lloyd Blankfein's children. They're good people. They do a good job at what they do. They're not bad people. It is just that the system is biased towards their institutions."
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Wednesday, January 16, 2013
Where Is the Inflation? / Economics / Inflation
By: Mark_Thornton
Critics of the Austrian School of economics have been throwing barbs at Austrians like Robert Murphy because there is very little inflation in the economy. Of course, these critics are speaking about the mainstream concept of the price level as measured by the Consumer Price Index (i.e., CPI).
Let us ignore the problems with the concept of the price level and all the technical problems with CPI. Let us further ignore the fact that this has little to do with the Austrian business cycle theory (ABCT), as the critics would like to suggest. The basic notion that more money, i.e., inflation, causes higher prices, i.e., price inflation, is not a uniquely Austrian view. It is a very old and commonly held view by professional economists and is presented in nearly every textbook that I have examined.
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Friday, January 11, 2013
Iran’s Lying Inflation Statistics / Economics / Inflation
By: Steve_H_Hanke
Today, the Central Bank of Iran released its inflation statistics for 2012. Remarkably, despite all of the international notoriety surrounding Iran’s outbreak of hyperinflation in October, the Central Bank claims that Iran experienced an annual inflation rate of only 27.4%.
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Friday, January 11, 2013
Keynesian Inflation Propaganda Exposed / Politics / Inflation
By: Peter_Schiff
Economists who hold the popular view that expanding the money supply will provide the best medicine for our ailing economy dismiss the inflationary concerns of monetary hawks, like me, by pointing to the supposedly low inflation that has occurred during the current period of rampant Fed activism. In a recent blog post aimed specifically at me, Paul Krugman noted that the sub 2.5% increases in the Consumer Price Index (CPI) over the past few years are all that is needed to prove me wrong. In fact, Krugman and others have even suggested that the CPI itself overstates inflation and that the Fed would be better able to help the economy if less strict methodologies were used. However, there is plenty of evidence to suggest that the CPI is essentially meaningless as it woefully under reports rising prices.
Friday, January 04, 2013
Investor Profit from the Inflation Deflation Reality 2013 / Economics / Inflation
By: DeepCaster_LLC
“There is no practical way that QE can cease here or in Euroland without a total and final collapse of the financial system.”
“The Federal Reserve Really Has No Practical Option To End QE”
Jim Sinclair, jsmineset.com, 1/3/2013
The five year chart of the CRB Index (a Broad Measure of Commodities Prices) shows three descending tops, which is suggestive of Deflation. But to conclude that Deflation is likely to be The Ruling Force in the Economy in 2013 would be a Dangerous Error.
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Friday, January 04, 2013
Market Valuation, Inflation and Treasury Yields: Clues from the Past / Interest-Rates / Inflation
By: PhilStockWorld
My monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations on investment returns. In a “normal” market environment — one with normal business cycles, Federal Reserve policy, interest rates and inflation — current valuation levels would be a serious concern.
Monday, December 31, 2012
Why Inflation is the Economy's Hidden Iceberg in 2013 / Economics / Inflation
By: Money_Morning
Martin Hutchinson writes:
Even though Ben Bernanke's Fed has kept interest rates close to zero, inflation hasn't been a big problem since the 2008 financial crisis.
Despite what many observers have expected inflation has remained quite tame.
However in 2013, that may be about to change. One factor that might cause a surge in inflation is the fiscal cliff.
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Thursday, December 27, 2012
Why TIPS Won't Protect You from Inflation...and Other Government Lies / Politics / Inflation
By: Casey_Research
If the "World Snake Oil Salesperson Society" had a hall of fame, good old Uncle Sam would be a charter member. When it comes to smooth-talking folks into buying debt instruments, he's the slickest around.
And Treasury Inflation-Protected Securities (TIPS) are one of his slickest gimmicks.
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Saturday, December 22, 2012
Investor Inflation Protection, and Profit, from Political Numbers / Economics / Inflation
By: DeepCaster_LLC
As the miscreants in Washington negotiate solutions to the “fiscal-cliff” and debt-ceiling crises, trial balloons have been floated that agreement has been reached to use a new CPI measure—the C-CPI-U, which tends to understate inflation even more than the CPI-U—as way of deceptively reducing cost-of-living adjustments to Social Security, etc. Not too surprisingly, public reaction appears to be turning increasingly negative, as the concept gets broader exposure in the popular press.
Wednesday, December 19, 2012
Bank of England Inflation Fraud Holds Steady at CPI 2.7%, RPI 3%, and Real 3.9% / Economics / Inflation
By: Nadeem_Walayat
The mainstream press played its part in perpetuating the Government's debt / money printing arm's (Bank of England) continuing inflation fraud with matter of fact coverage of today's CPI inflation rate holding steady at 2.7%. The reality is that the Inflation fraud is at the very core of why the general population is continually forced to work ever harder and to accumulate ever greater amounts of debt (slavery) all to just stand still in terms of being able to cope with the real cost of living increases that are NOT reflected by official CPI.
Saturday, December 15, 2012
What Inflation Means For You: Inside the Consumer Price Index CPI / Economics / Inflation
By: PhilStockWorld
Courtesy of Doug Short. The Fed justified a previous round of quantitative easing “to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate” (full text). In effect, the Fed has been trying to increase inflation, operating at the macro level. But what does an increase in inflation mean at the micro level — specifically to your household?
Friday, December 14, 2012
Inflation Targeting is Dead, Long Live Inflation! / Commodities / Inflation
By: Adrian_Ash
The Fed actually thinks it can drive 315 million souls through a 0.2% gap in its forecasts...
REMEMBER INFLATION? Central bankers do – and they want to get rid of it, writes Adrian Ash.
Not in the way they used to get rid of it. Back then they would raise interest rates to curb debt-fuelled spending. Whereas now they want to throw inflation out of their policy targets instead.
Tuesday, November 13, 2012
UK CPI Inflation Soars Despite Bank of England Deflation Propaganda, Shocks Academic Economists / Economics / Inflation
By: Nadeem_Walayat
UK CPI inflation soared for October by rising to 2.7% up from 2.2% (Sept) which is set against academic economists / mainstream press expectations for a rise to just 2.3%. Whilst the more recognised inflation measure, RPI rose to 3.2% up from 2.6%, against press expectations of 2.8%.
Friday, November 09, 2012
Obama Election Win Means Big Inflation is Coming, Investor Refuge in Gold and Silver / Economics / Inflation
By: Zeal_LLC
Well, Americans voted and the winner is inflation. Half our voting populace inexplicably decided to award a second term to Obama. Four more years of mind-boggling record deficits and record national debt growth! Obama’s Administration spent roughly 50% more than the government took in, which can essentially only be financed in two ways. Borrowing from foreigners and running the printing presses.
Wednesday, November 07, 2012
When Infinite Inflation Isn't Enough / Economics / Inflation
By: Peter_Schiff
If no one seems to care that the Titanic is filling with water, why not drill another hole in it? That seems to be the M.O. of the Bernanke Federal Reserve. After the announcement of QE3 (also dubbed "QE Infinity") created yet another round of media chatter about a recovery, the Fed's Open Market Committee has decided to push infinity a little bit further. The latest move involves the rolling over of long-term Treasuries purchased as part of Operation Twist, thereby more than doubling QE3 to a monthly influx of $85 billion in phony money starting in December. I call it "QE3 Plus" - now with more inflation!
Friday, November 02, 2012
Will The Inflation Monster Devour Your Savings? / Personal_Finance / Inflation
By: DeviantInvestor
Inflation will destroy your savings unless you prepare. I encourage you to buy my new eBook, “Survival Investing With Gold and Silver.”
Question: Is this book simple and easy to understand?
Answer: Yes!
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Tuesday, October 30, 2012
The Virtual Economic Recovery Courtesy of Inflation / Economics / Inflation
By: Paul_Craig_Roberts
Since mid-2009 the US has been enjoying a virtual recovery courtesy of a rigged inflation measure that understates inflation. The financial Presstitutes spoon out the government’s propaganda that prices are rising less than 2%. But anyone who purchases food, fuel, medical care or anything else knows that low inflation is no more real that Saddam Hussein’s weapons of mass destruction or Gadhafi’s alleged attacks on Libyan protesters or Iran’s nuclear weapons. Everything is a lie to serve the power-brokers.
Wednesday, October 17, 2012
U.S. Dollar Index Disguises Global Inflation Threat / Currencies / Inflation
By: Jonathan_Kosares
When the U.S. Dollar Index peaked at 120.51 in January of 2002, few suspected that it was on the brink of a one-directional correction that would ultimately erase a third of its value. In fact, in just three short years, the dollar index shed, on average, a point a month before ultimately hitting a low of 80.77 in January of 2005. This sharp decline in the dollar index coincided with, and largely fueled, the first few years of the now decade-old bull market in gold.
Tuesday, October 16, 2012
Inflation: Washington is Blind to Main Street's Biggest Concern / Economics / Inflation
By: Peter_Schiff
Journalists, politicians and economists all seem to agree that the biggest economic issue currently worrying voters is unemployment. It follows then that most believe that the deciding factor in the presidential race will be the ability of each candidate to convince the public that his policies will create jobs. It seems that everyone got this memo...except the voters.
Sunday, October 07, 2012
Why You Should Be VERY Afraid of Inflation / Stock-Markets / Inflation
By: Graham_Summers
For the last 80 years or so, financial theory has held that inflation and deflation were mutually exclusive events. We’ve now seen that idea go up in smoke as deflation affects home prices and incomes in the US at the very same time that we experience inflation in energy and food prices courtesy of the Fed’s insane money printing.
Wednesday, October 03, 2012
Investors Fight the Inflation Boogeyman, Protect Your Wealth from Fed Money Printing / Stock-Markets / Inflation
By: Axel_Merk
Investors are concerned about inflation. But how can investors attempt to inflation-proof their portfolios? Buy TIPS? Short Treasury bonds? Stocks? Real Estate? Commodities? Gold? Currencies? Or should investors regard those warnings about inflation as fear mongering?
Saturday, September 22, 2012
Inflation and Inflation Expectations Analysis / Economics / Inflation
By: Asha_Bangalore
Since the Federal Reserve initiated its third round of quantitative easing (QE3) last week, critics have expressed concern that the policy would ultimately be inflationary. Investors also seemed to sense a higher risk in this area; gold and other commodities have rallied as portfolios seek to hedge against this outcome. In response, several Federal Reserve officials have been out defending the central bank’s action.
Friday, September 21, 2012
Forget About QE… I’m Worried About UC / Economics / Inflation
By: Graham_Summers
Let’s just be blunt here.
Inflation is back in a big way. It’s not going to show up in the official numbers, but if you’ve paid for gas or food or healthcare recently, you’ve no doubt noticed that:
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Wednesday, September 19, 2012
Why You Should Prepare for Econcomic Catastrophe / Economics / Inflation
By: Gary_North
It is not often that readers get a clear-cut choice between two forecasts. Most forecasts have wiggle room. Not the following.
1. The United States government will default.
2. The United States government will not default.
I hold the first position. John T. Harvey holds the second. He wrote a piece for Forbes defending his position: "It Is Impossible For The US To Default".
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Thursday, August 30, 2012
When Is Fractional-Reserve Banking Inflationary? / Economics / Inflation
By: Michael_S_Rozeff
The takeaway here is that fractional-reserve banking is not inflationary per se. Fractional-reserve banking is inflationary when combined with central banks with unconstrained fiat money powers. The real culprit in inflation is an unconstrained central bank. Since central banks are created or enabled by governments, the real culprit in inflation is government. In turn, inflation cannot be controlled unless proper government, which really means proper law, is instituted and respected.
Tuesday, August 14, 2012
UK CPI Inflation Rise Surprises Mainstream Press, Illustrates Olympics Lasting Debt Legacy / Economics / Inflation
By: Nadeem_Walayat
Mervyn King, the Governor of the Bank of England recently forecast that UK inflation would continue falling for the rest of this year which the mainstream press and academic economists / vested interests had been busy regurgitating at length. That is until today's release of the latest Inflation data for July that showed CPI Inflation rise to 2.6% (2.4%) and RPI to 3.2% (2.8%), which led to confusion across the air-waves as illustrated by the BBC's Stephanie Flanders floundering all over the place in an attempt to explain why Inflation had risen when the script everyone had been following was for Inflation to fall towards 2%.
Friday, July 20, 2012
The Quantum of Quantitative Easing Inflation is Coming! / Economics / Inflation
By: Nadeem_Walayat
The City of London is Imploding as a consequence of ever escalating shockwave's mostly emanating from across the Atlantic as the United States goes into overdrive in attempts to wipe-out competition from London in terms of profiting from global financial market transactions.
First we saw the US dig out and focus on 4 year old LIBOR manipulation stories centred around the cesspit that goes by the name of Barclays Bank that looks set to devastate all of UK's biggest banks, with the UK tax payer ultimately footing the bailout bill. I have covered this story at length that illustrate that everyone knew about LIBOR manipulation but now pretend that they only found out relatively recently - more here - RBS Chaos and Barclays Libor Cesspit Prompts Slow Motion Run on British Banks
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Monday, July 16, 2012
Ron Paul: Inflation is a Monetary Phenomenon / Politics / Inflation
By: Dr_Ron_Paul
Later this month Congress will have an unprecedented opportunity to force the Federal Reserve to provide meaningful transparency to lawmakers and taxpayers. HR 459, my bill known as "Audit the Fed," is scheduled for a vote before the full Congress in July. More than 270 of my colleagues cosponsored the bill, and it has the support of congressional leadership. But its passage in the House of Representatives is only the beginning of the battle, as many Senators and the President still don't see the critical need to have a national discussion about monetary policy.
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Monday, July 16, 2012
How the Malaysian Government Manipulate the CPi to Undermine Inflation / Economics / Inflation
By: Sam_Chee_Kong
The Consumer Price Index measures the movement of goods and services purchased for consumption over a period of time. It is a very good measure for households to evaluate their financial position and purchasing power over time. As far as we know, folks like us knows that the prices of goods and services had risen much for the past few years and yet the government had been telling us the contrary. This is because according to their calculation based on the CPI, the basket of goods and services only goes up by 2-3% per annum. As we know all governments lies about their inflation figures. They will report inflation figures of 2-3% even though the prices of food, fuel, education, medical expenses and etc have been sky rocketing in the past few years.
Saturday, July 14, 2012
U.S. Wholesale Price Inflation Reverses Part of Recent Decline / Economics / Inflation
By: Asha_Bangalore
The Producer Price Index (PPI) of Finished Goods moved up 0.1% in June, following a string of three monthly declines. The energy price index fell 0.9% in June vs. a 4.3% decline in May. Wholesale gasoline and natural gas prices moved up in June but residential electricity costs declined and provided a large enough offset to bring down the overall finished energy price index. The 0.5% increase in food prices was one of the culprits for a gain in the headline index.
Thursday, July 12, 2012
RBS Chaos and Barclays Libor Cesspit Prompts Slow Motion Run on British Banks / Interest-Rates / Inflation
By: Nadeem_Walayat
The Bank of England is worried, very worried, because for the past 4 years Britain's central bank has been busy battling to prevent financial armageddon from taking place by means of stuffing every orifice of the too big to fail banks with free money courtesy of the electronic money printing presses to the tune of £375 billion to date, the consequences of which is that everyone in Britain pays the price in terms of high inflation that money printing brings to ever escalating degree as countless historic examples such as Weimar Germany and Zimbabwe illustrate where this trend ultimately leads.
Wednesday, June 20, 2012
Europe's Solution isn't More Inflation / Economics / Inflation
By: Michael_Pento
We now live in a phony economic world where central bankers rule without check. Any hint of weakening data, which is actually a sign of reality and healing returning to the economy, is quickly met with the promise of more disastrous money printing. Last week we saw U.S. factory orders down and initial jobless claims rise. In Europe, we saw the Spanish bank bailout fall flat on its face and interest rates spike in Spain and Italy. Therefore, in predictable fashion, financial markets soared on the premise that the ECB and Fed must imminently ride to the rescue once again.
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Tuesday, June 19, 2012
BBC Reports Falling UK CPI Inflation as Good News, Misses the Inflationary Depression In Progress / Economics / Inflation
By: Nadeem_Walayat
The BBC with much fanfare has been leading its news bulletins all day with the apparent good news that the UK CPI Inflation rate had fallen in mAY to 2.8%, its lowest level for 2.5 years, with it's economics experts and members of the general public presented as painting the news as a highly positive development.
Tuesday, June 19, 2012
UK June CPI Inflation Shows Savers’ Hardship Continues Unabated / Personal_Finance / Inflation
By: MoneyFacts
Inflation figures released today show the Consumer Prices Index (CPI) fell during May, from 3.00% to 2.8%.
To beat inflation, a basic rate taxpayer at 20% needs to find a savings account paying 3.50% per annum, while a higher rate taxpayer at 40% needs to find an account paying at least 4.70%.
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Tuesday, May 01, 2012
The Inflation Lovers’ Spat / Politics / Inflation
By: Michael_Pento
Two lovers of the notion that inflation can cure everything that ails an economy recently squared off in a battle over who adores counterfeiting the most. Paul Krugman, who probably has a statue of Al Capone at his bedside, chided Ben Bernanke in a New York Times Magazine article for his unwillingness to raise the Fed’s inflation target in order to reduce the unemployment rate. The recipient of the Nobel Prize in economics penned an article titled “Earth to Ben Bernanke” on April 24th. In it he encouraged Bernanke to embrace the idea that more money printing can save the world by writing, “Higher expected inflation would aid an economy.”
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Friday, April 20, 2012
Real Asset Investments as a Hedge Against Inflationary QE / Stock-Markets / Inflation
By: Submissions
Adam Waldman writes: Since the financial crisis and the “Great Recession” began in 2008, western central banks have responded in a number of different ways. The one method linking all of these central banks activities together has been the use of Quantitative Easing, or QE as it is more commonly called.
Friday, April 20, 2012
Get Ready for 'Hot' Inflation / Economics / Inflation
By: Submissions
Gregor Macdonald writes: Ideological deflationists and inflationists alike find themselves both facing the same problem. The former still carry the torch for a vicious deflationary juggernaut sure to overpower the actions of the mightiest central banks on the planet. The latter keep expecting not merely a strong inflation but a breakout of hyperinflation.
Sunday, April 15, 2012
March U.S. CPI Inflation Points Highlights Economic Risks / Economics / Inflation
By: Tony_Pallotta
Friday's release of the March consumer price index (CPI) highlights the risk facing the US economy as we have been discussing over the past few weeks. When the US exited the 2008 recession (using exited loosely) it was not final demand from consumers that initiated growth but rather government stimulus. Debt as is the case with most recoveries is what fuels the initial leg.
Sunday, April 01, 2012
UK Inflation Mega-trend Second Anniversary Despite Continuing Delusional Deflation Propaganda / News_Letter / Inflation
By: NewsLetter
The Market Oracle NewsletterJanaury 19th, 2012 Issue #1 Vol. 6
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Monday, March 26, 2012
Bernanke, Mister In-Between is 100% Sure / Politics / Inflation
By: Fred_Sheehan
This isn't right. This isn't even wrong" ~ Wolfgang Pauli, Cambridge University physicist, attempting to read a colleague's paper.
60 MINUTES: "Can you act quickly enough to prevent inflation from getting out of control?"
BERNANKE: "We could raise interest rates in 15 minutes if we have to. So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time. Now, that time is not now."
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Monday, March 19, 2012
Is Fiat Money Inflation a Fraud? / Economics / Inflation
By: Mario_Innecco
The classical definition of inflation is an increase in the amount of money in circulation leading to a rise in prices of goods and services. In a fiat money system money and credit are imposed by statute on the public and controlled by the central banking cartel and not a free market for money and credit. As Felix Somary once said: “the state alone is responsible for inflation: inflation without government, or indeed against government, is impossible.”(1)
Saturday, March 17, 2012
Gas Prices Lift Overall U.S. Consumers Price Inflation in February / Economics / Inflation
By: Asha_Bangalore
The Consumer Price Index (CPI) rose 0.4% in February after a 0.2% increase in the prior month. According to the BLS, about 80% of the increase was from higher prices for gasoline. Gasoline prices shot up 6.0% in February to result in a 3.2% increase of the energy price index, despite a 3.4% drop in natural gas prices and a steady reading for electricity. From a year ago, the CPI rose 2.87%, following gains of 2.93% in January and 3.9% in September.
Friday, March 16, 2012
Higher Energy Prices Lift U.S. Producer Price Index / Economics / Inflation
By: Asha_Bangalore
The Producer Price Index (PPI) rose 0.4% in February after a 0.1% increase in the prior month. The 1.3% gain in the energy price index was led by a 4.3% jump in gasoline prices. The food price index slipped 0.1%, marking the third consecutive monthly decline. Excluding food and energy, the core PPI advanced 0.2% during February vs. a 0.4% increase in January.
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Thursday, March 08, 2012
How the Government Lies About the Real Inflation Rate / Politics / Inflation
By: Money_Morning
David Zeiler writes:
More experts are saying what most Americans have suspected for years - the real inflation rate is much higher than the government is willing to admit.
Officially, the U.S. Bureau of Labor Statistics (BLS) says the inflation rate, or Consumer Price Index (CPI), for 2011 was 3%.
Read full article... Read full article...
Friday, March 02, 2012
Consumption and Inflation Mega-trends, The Great Sharing / Commodities / Inflation
By: Richard_Mills
The most investable trend over the next 20 years is going to be the rising price of commodities, rising prices will be caused by two factors;
- Increasing consumption
- Inflation
Friday, March 02, 2012
Huge Problem With Bernanke's 2% Inflation Target Explained in Graphs / Economics / Inflation
By: Mike_Shedlock
Ben Bernanke wants prices to rise 2%. There are numerous problems with such a proposal, the first being increases in money supply sometimes lead to asset bubbles and not increases in prices of consumer goods.
Indeed the Fed completely ignored (if not encouraged) the housing bubble because home prices are not in the CPI. A housing bubble and a housing crash was the result.
Tuesday, February 28, 2012
Mish Deflationista vs Current Stagflation Environment / Economics / Inflation
By: David_Petch
This article deals with the current environment of stagflation we are in that will see periods of defined inflation, followed by short but intense deflation, unlike a constant "Deflationista" environment as insinuated in the writings of blogger, Mike Shedlock. A few years back he came out with an article about legendary Strategic Investor Donald Coxe (Who is an extremely captivating writer with his vast knowledge of history and amusing ways in which words are spun together), titled "Donald Coxe Jumps the Shark". Mike got the call on deflation of 2008 correct...KUDOS to Mike. However, the constant beating of drums about deflation deflation deflation is kind of like someone waiting for over 20 years for that 3rd of a 3rd of a 3rd down that just never really seems to materialize. The discovery I made back in July of 2011 that a Contracting Fibonacci Spiral nailed every major high since the 1934 low after much thought defines why the markets are behaving as they do. By completion, this article should explain why defining the present environment as deflationary is like only using one sense to describe an elephant when using the collective of all senses provides a much better answer and explanation.
Friday, February 24, 2012
Fed Conflates Inflation with Growth / Economics / Inflation
By: Michael_Pento
It is a sad situation when everything the man in charge of our central bank professes to understand about inflation is wrong. Mr. Bernanke does not know what causes inflation, how to accurately measure inflation or the real damage inflation does to an economy. He, like most central bankers around the globe, persists in conflating inflation with growth. The sad truth is that our Federal Reserve believes growth can be engendered from creating more inflation.
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Thursday, February 23, 2012
Low Interest Rates, Economic Kill or Cure? / Interest-Rates / Inflation
By: Adrian_Ash
Hold still! This might sting a little...
"TREATING serious medical conditions often has unwanted side effects," said Charles Bean, deputy governor of the Bank of England and a doctor of economics, in a speech in Glasgow on Tuesday.
"But, unpleasant as those side effects sometimes are, treatment is invariably better than the alternative. So it is with the economic medicine of low interest rates and quantitative easing."
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Tuesday, February 21, 2012
Inflation Held in Check by Fear / Economics / Inflation
By: John_Browne
History has shown us time and again that out of control money supply expansion creates inflation. In light of the trillions of synthetic dollars that have been injected into the economy by the Federal Reserve over the past five years, most observers (this one included) had expected prices to spiral upward. But in making these determinations, many of us forgot to factor in the supply side of the supply/demand equation. Inflation remains low now because of game changing events that have reduced the demand for money.
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Saturday, February 18, 2012
The Destruction of Savings by Inflation / Personal_Finance / Inflation
By: Submissions
Alasdair Macleod writes: In the past, insurance companies and pension funds have been keen to advertise the benefit of compounding arithmetic for savings. Over the last 30 or 40 years the rate has been lifted by inflation, but to understand the cost inflation brings you have to consider the whole savings cycle: not just the accumulation stage, but also annuity values in retirement. Furthermore, the historical experience of a typical working life should be compared with a theoretical sound-money alternative.
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Thursday, February 16, 2012
Investors Turn to TIPS as Warren Buffett Warns on Inflation / Interest-Rates / Inflation
By: Money_Morning
Don Miller writes:
Warren Buffett last week did more than warn investors on the dangers of low interest rates and inflation.
The Oracle of Omaha also had harsh words for traditional bonds.
In a Fortune article Buffett went so far as to say, "Right now bonds should come with a warning label."
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Wednesday, February 15, 2012
I only have eyes for you. And Inflation / Economics / Inflation
By: Jan_Skoyles
You may have seen them already but some of them were so, so bad (and some pretty good) that we just had to say something about them.
Yep, we’re talking about the Fed Valentine’s.
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Tuesday, February 14, 2012
George Osborne Does Not Care About Bank of England Governor's Letter / Politics / Inflation
By: Mario_Innecco
The governor of the Bank of England is supposed to write a letter to the Chancellor of the Exchequer (U.K. Finance Minister) explaining why he has not succeeded in maintaining the annual growth in the Consumer Price Index (CPI) within a range between 1% and 3%. The point of maintaining a median CPI around 2% is to safeguard the purchasing power of the currency that Britons use. The Bank of England and H.M. Treasury are supposed to protect the currency of the realm.
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Tuesday, February 14, 2012
UK Inflation Rate Falls,Cold Snap Lifts For Savers / Personal_Finance / Inflation
By: MoneyFacts
Inflation figures released today show the Consumer Prices Index (CPI) fell during January from 4.2% to 3.6%.
To beat inflation, a basic rate taxpayer at 20% needs to find a savings account paying 4.50% per annum, while a higher rate taxpayer at 40% needs to find an account paying at least 5.99%.
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Monday, February 13, 2012
Keynesians Jump the Gun on Inflation / Economics / Inflation
By: Peter_Schiff
Advocates of government stimulus are running victory laps on recent developments that appear to vindicate their strategy. In particular, Paul Krugman compares the sluggish growth in Europe to the somewhat-less-sluggish growth in the US to prove that stimulus was more effective than austerity. Other economists are using government inflation measures to defend Fed Chairman Bernanke's easy-money policy. The only problem is, they're calling the race before the finish line is even in sight.Read full article... Read full article...
Tuesday, February 07, 2012
Timing the Market: Predicting When the FED Will Act Next (Feb 12) / Stock-Markets / Inflation
By: Chris_Riley
Sadly, we have reached the point where markets are largely driven by government & central bank action. Their principle policy tool is monetary easing, which is used to shoot-up markets, against a market driven backdrop of de-levering. So in order to predict what the actors are likely to do, we need to understand the political constraints & incentives that they find themselves under: the principle actors being the central bankers and their politician friends.
Friday, February 03, 2012
What Every U.S. Investor Should Know About Inflation / Economics / Inflation
By: Tony_Caldaro
The Department of Labor publishes the Consumer Price Index (CPI) every month to monitor the inflation rate in the US. The chart below displays the annual rate of change, month to month, of the CPI in the Greenspan/Bernanke era. As you can observe it has averaged about 2.5%.
Wednesday, February 01, 2012
Are You Ready for Some Super Bowl Inflation? / Economics / Inflation
By: Eric_McWhinnie
January was an impressive month for the markets. The Dow Jones Industrial Average increased 3.4 percent, while the Standard & Poor’s 500 gained 4.4 percent. It was the biggest monthly gain for the major indexes since 1997. However, the real star performances in January came from gold and silver. Gold finished January at $1,737.80 per ounce, representing a remarkable 11 percent gain for the month. It was the largest monthly gain since last August, and the best start to a new year since 1980. Silver, which benefits from a safe-haven and industrial component, surged 19 percent in January, representing its largest monthly rally in nine months.
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Tuesday, January 31, 2012
Inflation is Part of the Plan / Economics / Inflation
By: Money_Morning
Martin Hutchinson writes:
Forget about lost decades. Forecasts that we'll be turning Japanese couldn't be further from the truth.
Here's why.
It's simple, really. Deflation is not in the interest of anybody in power, so it's very unlikely to happen.
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Thursday, January 26, 2012
Tail Events, Isolation, New Normal Of Hyper Monetary Inflation / Politics / Inflation
By: Jim_Willie_CB
The year 2012 has started out in strange ways. While celestial forces augur for rare tail events, the assurance of man-made events that stretch far into the extreme tail of probability are not only very likely but will be of a type to reflect the change in the global balance of financial power. The Paradigm Shift mentioned over the course of the last two to three years is at work, having moved into a higher gear. The gold is moving from the West to the East, along with the power. We will not see the process reverse in our lifetime. The sanctions set against Iran have been devised by a former global leader nation that is beset by insolvency, fraud, and lost integrity. The backfire has consolidated forces into a more fortified position against the USDollar.
Thursday, January 19, 2012
UK Inflation Mega-trend Second Anniversary Despite Continuing Delusional Deflation Propaganda / Economics / Inflation
By: Nadeem_Walayat
UK CPI inflation ended 2011 at 4.2% (December) coming down sharply from a peak of 5.2% (September) that despite the mainstream presses continuing academic backed falling inflation / deflation risk warnings remains at more than DOUBLE the Bank of England's 2% target that continues to make a mockery of the central bank whose primary remit is supposedly price stability. CPI 3% was supposed to have been the maximum level a break above which was supposed to trigger a series of panic measures to bring inflation under control, instead of which the Bank of England has instead opted to print money that to date officially totals £275 billion of electronic money printing that the fractional reserve banking system will eventually leverage to over £1 trillion for the primary objective for the monetization of government debt as warned of now 2 years ago in the Inflation Mega-Trend Ebook (Free Download).
Saturday, December 17, 2011
U.S. Inflation, A Hurdle for the Next Round of Quantitative Easing? / Economics / Inflation
By: Asha_Bangalore
The Consumer Price Index (CPI) held steady in November after a 0.1% drop in October. The 1.6% drop in the energy price index and the muted 0.1% increase in food prices helped to hold down the overall gain of the CPI in November. Gasoline prices continue to decline and offset higher prices of heating oil. The core CPI, which excludes food and energy, rose 0.2% in November following gains of 0.1% in each of the prior two months. Higher prices for apparel (+0.6%) and medical care (+0.4%) show the relatively large gains in November. Shelter costs advanced 0.2% in November, matching the increase seen in October.
Tuesday, December 06, 2011
What the Christmas Price Index is Telling U.S. Consumers About Inflation / Economics / Inflation
By: Money_Morning
Kerri Shannon writes:
U.S. consumers can get a glimpse of what to expect in price changes this holiday shopping season - especially if you get your gift ideas from an old song.
The PNC Christmas Price Index, released by PNC Wealth Management (NYSE: PNC) measures the total cost of presents listed in the classic tune, "The Twelve Days of Christmas." This year, the price tag for an ambitious gift-giver buying all 364 presents hit $101,119.84, a 4.4% gain over last year's index.
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Monday, December 05, 2011
The Governments Hidden $500 Billion Inflation Tax on Savings / Personal_Finance / Inflation
By: Dan_Amerman
There is a hidden and deeply unfair "tax" that is costing US savers in excess of $500 billion per year. Through forcing interest rates far below the rate of inflation, the government has effectively created a tax on savings that not only takes all real interest income, but quite deliberately confiscates wealth from tens of millions of savers every year - for the direct benefit of the government.
Thursday, December 01, 2011
Ben Bernanke Beats Deflationists Into Submission With His Money Stick / Economics / Inflation
By: Jeff_Berwick
We've got a new slogan for deflationists. Deflationists: Wrong Since the Advent of Fiat Currency.
It's been the never-ending, battle royale of the economic world ever since the looming end to this financial system became starkly clear in 2008. Will the western governments, almost all completely incapable of paying the gargantuan debts enabled by democracy, central banking and fiat currency, allow the system to collapse (deflation) or worm their way out of it via inflation, until we live in a hyperinflationary apocalypse?
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Wednesday, November 16, 2011
U.S. Wholesale Prices Show Moderating Trend / Economics / Inflation
By: Asha_Bangalore
The Producer Price Index (PPI) of Finished Goods fell 0.3% in October after a 0.8% jump in the prior month. A 1.4% drop of the energy price index was responsible for about two-thirds of the decline in the wholesale price index. The core PPI, which excludes food and energy, held steady in October after ten monthly gains. Lower prices for cars and trucks offset price hikes of other core items.
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Tuesday, November 15, 2011
Five Stocks To Help You Fight Food Inflation Pain / Companies / Inflation
By: Money_Morning
Kerri Shannon writes:
Unless you've stocked up on enough food to hold you through next year, you won't be able to avoid the effects of food inflation.
According to the U.S. consumer price index, overall food prices rose 4.7% in September from the year before. That's more than the 4.6% increase in August and 4.2% jump in July.
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Tuesday, November 15, 2011
Inflation, the Curse of Savers, Savings Accounts that Track RPI / Personal_Finance / Inflation
By: MoneyFacts
Inflation figures released today show the Consumer Prices Index (CPI) fell during October from 5.2% to 5.00%.
To beat inflation, a basic rate taxpayer at 20% needs to find a savings account paying 6.25% per annum, while a higher rate taxpayer at 40% needs to find an account paying at least 8.33%.
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Tuesday, November 15, 2011
Savers Protect Your Deposits From Bankrupting Banks and Quantitative Inflation / Stock-Markets / Inflation
By: NewsLetter
The Market Oracle NewsletterOctober 23rd, 2011 Issue #20 Vol. 5
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Tuesday, November 15, 2011
Bank of England's Quantitative Inflation Bankster's Paradise Inflationary Depression Economy / Economics / Inflation
By: NewsLetter
The Market Oracle NewsletterOctober 15th, 2011 Issue #19 Vol. 5
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Thursday, November 10, 2011
Inflation Warning: Inflating Your Economy Means Playing with Fire / Economics / Inflation
By: Casey_Research
GoldMoney founder James Turk interviews When Money Dies author Adam Fergusson, who discusses the parallels and differences between the Weimar inflation and the situation in the US and Europe today. "I don't see how any of these [Western] economies can grow their way out of the extraordinary debts that they have."
Thursday, October 20, 2011
U.S. Inflation Shows Signs of Moderation in September / Economics / Inflation
By: Asha_Bangalore
The Consumer Price Index (CPI) moved up 0.3% in September, following gains of 0.5% and 0.5% in July and August, respectively. The core CPI, which excludes food and energy, rose only 0.05% in September after a 0.24% increase in August. The September increase is the smallest gain since March 2011 (see Chart 1). These signs of moderation in inflation are noteworthy because they allow the Fed to focus on growth in the inflation-growth debate.
Thursday, October 20, 2011
Murder of the Savers, Killed by Inflation / Economics / Inflation
By: Adrian_Ash
Savers and pensioners! Your murderers need no revolution to storm your stately homes and palaces...
IT'S NOW 100 years since Great Britain established its welfare state. Shortly after, and as the First World War kicked off, it abandoned the free exchange of bullion for notes under the classical Gold Standard.
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Thursday, October 20, 2011
Fed’s Dual Mandate Not Workin, Inflation and Unemployment Are Rising / Economics / Inflation
By: Michael_Pento
We are all aware that the Fed has a dual mandate of stable prices and maximum employment. But what may come as a surprise to most is that they have a distinct preference in their mandates. The Federal Reserve under Ben Bernanke has a clear bias towards fulfilling the goal of maximum employment. Given the situation where unemployment is high and prices are relatively stable, the Fed has opted to pursue a policy of pursuing higher inflation in the hopes of engendering lower unemployment rates.
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Tuesday, October 18, 2011
UK Inflation Accelerates to CPI 5.2%, Bankrupt Britain's Stealth Debt Default Continues / Economics / Inflation
By: Nadeem_Walayat
UK CPI Inflation smashed through the 5% barrier by rising to 5.2% for September (4.5%), which is now approaching near triple the Bank of England's 2% target that continues to make a mockery of the central bank whose primary remit is supposedly price stability, where 3% was supposed to have been the maximum level a break above which was supposedly to trigger a series of panic measures to bring inflation under control, instead of which the Bank of England has instead opted to print money as it recently announced another £75 billion of electronic money printing that the fractional reserve banking system would eventually leverage to over £1 trillion, for the primary objective for the monetization of government debt, i.e. the same policy that the Weimar republic had been engaged in on its path towards hyperinflation. UK public debt is probably being monetized at the rate of 15% per annum with approx 30% monetized to date, only the deflation fools and the vested interest academic economists cannot or choose not to realise the highly inflationary consequences of governments monetizing their debt.
Saturday, October 15, 2011
Bank of England's Quantitative Inflation Bankster's Paradise Inflationary Depression Economy / Economics / Inflation
By: Nadeem_Walayat
The Bank of England recently hit the panic button again by announcing another print run of £75 billion (electronically), which is in addition to the £200 billion already printed since March 2009. The news has been accompanied by much economic propaganda across the media sphere from the Bank Governor Mervyn King and Politicians including Osbourne and Cameron to the BBC's journalists / pseudo economists virtually all in unison reading from the same script of printing £75 billion being necessary to boost the UK economy in the face of the imminent threat of Recession / Deflation.
Friday, October 14, 2011
The Fed 8% Inflation Solution / Interest-Rates / Inflation
By: Fred_Sheehan
The terminal stage of Dr. Frankenstein-style central banking is disgorging ridiculous claims of authority motivated by reckless efforts to retain control. One such pincer attack is the Federal Reserve's purported 2% inflation target. Behind our very eyes, this fictional mandate is being raised, all the more reason that savers need to speculate, not a welcome prospect with both inflationary and deflationary influences expanding and bound to burst.
Wednesday, October 05, 2011
War and Inflation in US History, Not Worth a Continental / Economics / Inflation
By: Richard_Mills
Inflation is caused by an increase in the money supply - the rate of inflation is determined by the quantity of goods vs. the money supply - more money chasing the same amount of, or fewer goods, causes price increases. The higher the price increases the higher the rate of inflation is said to be.
Wars cause inflation - war affects everything from international trading to labor costs to quantity of available consumer goods to product demand because governments:
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Wednesday, September 21, 2011
Fed Target Must be 5% Inflation / Interest-Rates / Inflation
By: Dr_Jeff_Lewis
The Federal Reserve may engage in what has been mocked by investors as “the twist,” a bond buying program intended to reduce long-term borrowing costs by soaking up long-dated Treasury issues. Of course, no matter the short-term goal, the real goal is to monetize the entirety of the US debt loads.
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Monday, September 19, 2011
Another Round Of Consumer Price Increases On The Way / Economics / Inflation
By: Clif_Droke
The ongoing economic depression has the middle class behind the proverbial eight ball. Not only has it resulted in the deflation of housing values but the stimulus efforts of the last two years have resulted in increased retail prices. This is one of the important signs that the depression has a lot longer to run, for until we see a substantial drop in consumer prices deflation's work isn't done.
Wednesday, August 31, 2011
Monetary Tsunami Is Coming / Economics / Inflation
By: Frank_Shostak
In his speech at Jackson Hole, Wyoming, on August 26, 2011, the Fed chairman disappointed most pundits. He did not promise another massive infusion of fake money, i.e., QE3. I suspect that a strengthening in bank lending is an important factor behind the Fed's decision to postpone the pushing of more money into the economy.
Friday, August 19, 2011
The Fed’s Focus is on Economic Growth Not Inflation / Economics / Inflation
By: Asha_Bangalore
Of the several economic reports published this morning, existing home sales data of July and the August factory activity report of the Philadelphia Fed take precedence over the July Consumer Price Index because inflation is likely to moderate if weak economic conditions persist in the near term.
Thursday, August 18, 2011
U.S. Whole Sale Prices Inflation Lifted by Food and Tobacco / Economics / Inflation
By: Paul_L_Kasriel
The Producer Price Index (PPI) of Finished Goods rose 0.2% in July after a 0.4% drop in the prior month. The 0.6% decline in energy prices provided a partial offset to higher prices of other items. Lower prices for gasoline led to the drop in the finished energy price index. An increase in prices of beef, veal, and fresh fruits led to the 0.6% jump in food prices during July, following a similar increase in the previous month. On a year-to-year basis, the finished goods price index has risen 7.2%.
Sunday, July 17, 2011
U.S. Economy Inflation R.I.P. Deflation / Economics / Inflation
By: EconMatters
Despite a big 4.4% drop off from energy prices in June following a 1.0% fall in May, the latest BLS data showed that the Consumer Price Index (CPI) for June was still up 3.6% year-over-year.
The core CPI (less food and energy), an inflation gauge watched closely by the Federal Reserve, also increased 1.6% year-over-year, and has been steadily rising and most of the increase has come within the past six months. (See Charts Below)
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Saturday, July 16, 2011
U.S. CPI Inflation - Lower Energy Prices Account for Decline / Economics / Inflation
By: Paul_L_Kasriel
The Consumer Price Index (CPI) fell 0.2% in June vs. a 0.2% increase in the prior month. The 6.8% drop of the gasoline price index accounted for a large part of the decline in the headline number. The food price index moved up 0.2% in June, the smallest increase for the year. The core CPI, which excludes food and energy, rose 0.3% in June, matching the gain posted in May.
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Monday, July 11, 2011
Staring Down China's Inflation Dragon / Economics / Inflation
By: EconMatters
China’s inflation jumped to its highest in three years with consumer price index (CPI) surging 6.4% year-over-year in June (See Chart Below). The spike has been fueled by escalating food prices despite that the central bank’s effort to tame inflation by pushing up the RRR (Reserve Requirement Ratio) for commercial banks six times this year, while raising interest rates five times since September, most recently on July 6.
Monday, June 27, 2011
Inflation Asides / Economics / Inflation
By: Fred_Sheehan
A note from a reader: In 1977 I accidentally ran into a high school friend of mine who had taken an advanced degree in mathematics and statistical analysis. He was working for [Federal Reserve Chairman Arthur] Burn's Fed. He informed me that he was working on a new methodology of calculating the inflation rate. When I asked what it was based on he demurred saying it was "Classified Secret." I was truly stunned. He did imply that, when done, the new methodology would greatly reduce the reported value. Sure enough, during the Volcker Fed, the new methodology was introduced and has been modified since then to greatly reduce the reported numbers. It made the Volcker effort at controlling inflation seem much more effective than it actually was.
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Friday, June 24, 2011
Say Goodbye to Your Standard of Living, Inflating Away America's Future / Politics / Inflation
By: Money_Morning
Michael Pento writes: Americans are suffering from a lack of adequate savings to fund a comfortable retirement. Our growing debt burdens virtually assure us that the lofty living standards of today will soon be nothing more than a long forgotten memory.
Those ideas are now becoming more promulgated.
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Friday, June 24, 2011
U.S. Dollar Repatriation and Inflation / Economics / Inflation
By: Jeff_Lewis
It’s starting to look like the corporate world will soon get another pass from Congress on paying its international tax bill. Last proposed and passed in 2005, a dollar repatriation holiday would allow companies to bring dollars on overseas back to the United States with only a 5.25% tax rate.
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Friday, June 24, 2011
U.S. Inflation Sick Minds / Politics / Inflation
By: Fred_Sheehan
DOW JONES NEWSWIRES - June 22, 2011 - "Lawmakers are considering changing how the Consumer Price Index is calculated, a move that could save perhaps $220 billion and represent significant progress in the ongoing federal debt ceiling and deficit reduction talks.
"According to congressional aides familiar with the discussions, the proposal would shift how the Consumer Price Index is calculated to reflect how people tend to change spending patterns when prices increase. For example, consumers tend to drive less when gas prices increase dramatically.
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Thursday, June 23, 2011
Stealth QE3 Comes to Fruition, Soaring Inflation is Next / Economics / Inflation
By: Money_Morning
David Zeiler writes:
U.S. Federal Reserve Chairman Ben Bernanke did what most everyone expected yesterday (Wednesday) at the culmination of the Federal Open Market Committee's (FOMC) two-day meeting - he left average Americans vulnerable to the pangs of higher prices and soaring inflation.
Saturday, June 18, 2011
Market Assessment of Inflation Has Changed / Economics / Inflation
By: Asha_Bangalore
The core Consumer Price Index (CPI), which excludes food and energy, increased 0.3% in May from the previous month and moved up 1.5% on a year-over-year basis and which leaves the Fed less comfortable than it has been in the past few months.Read full article... Read full article...
Wednesday, June 15, 2011
U.S. Core Wholesale Prices to Consumer Prices Pass Through is Not Here Yet / Economics / Inflation
By: Asha_Bangalore
The Producer Price Index (PPI) of Finished Goods increased 0.2% in May, following larger gains in each of the past five months. A 1.5% jump in energy prices was offset partly by a 1.4% drop in food prices during May. The BLS indicated that energy prices accounted for a large part of the increase in the wholesale price index. Energy prices have risen for eight straight months.
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Tuesday, June 14, 2011
UK CPI Inflation Holds at 4.5% as Stealth Theft of Wealth and Debt Default Continues / Economics / Inflation
By: Nadeem_Walayat
UK CPI Inflation remained at 4.5% for the month of May at more than twice the Bank of England's 2% target that continues to make a mockery of the central bank who's primary remit is supposedly price stability, where 3% is supposed to be the maximum level a break of which was supposedly to trigger panic responses to bring inflation under control, instead of which the Bank of England has instead opted to pump out temporarily high inflation propaganda for the past 18 months. Meanwhile the more recognised RPI Inflation measure nudged higher to 5.2% which is set against average pay rises of just 2%.
Monday, June 13, 2011
Bank of England's Phony Inflation Panic, Greece Bankrupt Again, Silver Crash 2011 / News_Letter / Inflation
By: NewsLetter
May 16th, 2011 Issue #10 Vol. 5Read full article... Read full article...
Thursday, June 09, 2011
Different Measures of Inflation / Economics / Inflation
By: Asha_Bangalore
Concern about imminent inflation is at the heart of criticism of the Fed's quantitative easing programs. Charts 1 and 2 depict recent trends of much tracked price gauges and the main take away from these charts is that inflation excluding food and energy are contained and higher energy prices have translated into only a less than proportionate increase in core prices.
Wednesday, June 08, 2011
How to Shelter Your Cash From Inflation / Personal_Finance / Inflation
By: Terry_Coxon
Terry Coxon, The Casey Report writes: The high rate of inflation most of us believe is waiting not too far down the road will be an earthquake for investment markets. The likely winners (gold, silver, precious metals stocks) and the likely losers (long-term bonds and most stocks) aren’t too hard to identify. But separating the sheep from the goats is only one element for financial success in an environment of rapidly rising consumer prices.
Friday, June 03, 2011
Inflation Expectations Reflect Slowing U.S. Economic Conditions / Economics / Inflation
By: Asha_Bangalore
Latest economic data (ISM manufacturing survey results for May, auto sales of May, factory production of April, consumer spending of April) underscore the shift in business momentum to a slower pace during the past two months. Consistent with this change, inflation expectations have declined.
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Saturday, May 28, 2011
UK Inflation Invisible to Government Politicians Such as Vince Cable / Economics / Inflation
By: Adrian_Ash
Where-oh-where can all this inflation – which doesn't exist – be coming from...?
THERE'S NONE so blind as those who claim they can see.
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Wednesday, May 18, 2011
The Coming Great Inflation / Economics / Inflation
By: Michael_J_Kosares
The table displayed immediately below is likely to surprise even our most-jaded readers. It shows the astronomical increase in cash prices for well-known food commodities over the past 12 months. With inarguable exactness, it contradicts the nearly constant prattle in the mainstream press that inflation is under control, or that it is peaking and likely to come under control sometime soon. Some items on the list have doubled -- even tripled -- in price over the past year. Others have risen at mere double-digit rates.
Tuesday, May 17, 2011
U.S. Consumers Continue to Struggle as Inflation Accelerates / Economics / Inflation
By: Money_Morning
Kerri Shannon writes:
The accelerating U.S. inflation rate reached its fastest pace in two and a half years last month as consumers continue dealing with higher food and energy prices.
The consumer price index (CPI) in April rose 3.2% over the last 12 months, the biggest yearly jump since October 2008. That's up from a yearly jump of 2.7% in March and 2.1% in February. The CPI in April increased 0.4% from the previous month.
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Tuesday, May 17, 2011
U.S. Inflation Data: Actual vs. Fed’s Forecast / Economics / Inflation
By: Asha_Bangalore
April inflation data point to an upward trend of both the all items Consumer Price Index (CPI) and the core CPI, which excludes food and energy (see Chart 1). The data suggest that in as much as the Fed views the recent gains in energy and other commodity prices as "transitory," the level of concern could change fast if the economy gathers steam. In the three-months ended April 2011, the core CPI has risen at an annual rate of 6.2%.
Monday, May 16, 2011
Bank of England's Phony Inflation Panic, Greece Bankrupt Again, Silver Crash 2011 / Economics / Inflation
By: Nadeem_Walayat
The week saw the Merv (Britain's version of the Bernank) step forward and utter excuses as to why he now expects UK inflation to 'temporarily' soar above 5% this year on the official CPI measure (that significantly under reports real inflation as experienced by the general population). Mervyn King in a smoke and mirrors presentation all but blamed speculators for the surge in commodity prices with expectations that UK energy prices would surge by 15% later in the year.
Saturday, May 14, 2011
U.S. Consumer Price Index, Dichotomy Between Overall and Core Price Inflation Persists / Economics / Inflation
By: Asha_Bangalore
The Consumer Price Index (CPI) rose 0.4% in April after a 0.5% increase in March. The CPI has posted gains between 0.4% and 0.5% for five consecutive months, putting the five month annualized change in the CPI at 5.8%. Under other circumstances the Fed would view the recent readings of overall inflation as severely inflationary and engage in suitable monetary policy actions to prevent further increases in prices. The present situation is different.
Wednesday, May 11, 2011
Inflation Fears: Real or Hysteria? / Economics / Inflation
By: Ellen_Brown
Debate continues to rage between the inflationists who say the money supply is increasing, dangerously devaluing the currency, and the deflationists who say we need more money in the economy to stimulate productivity. The debate is not just an academic one, since the Fed’s monetary policy turns on it and so does Congressional budget policy.
Wednesday, May 11, 2011
Inflationary Reality Always Comes After “Recovery” / Economics / Inflation
By: Dr_Jeff_Lewis
Inflation watchers should be witnessing already the reality of the inflationary cycle; companies are cutting down their product sizes, cutting corners on packaging, and most importantly, raising prices. A few household names like Nike, McDonalds, and Walmart have indicated that it is inflation that is driving up their costs of doing business, and now they’re looking for ways to pass on the costs.
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Wednesday, May 11, 2011
U.S. Rising Inflation Pressures, as Non Oil Import Prices Also Advance / Economics / Inflation
By: Asha_Bangalore
Rhetoric from the Fed has held that recent gains of commodity prices are "transitory." Economic data have been supportive of this stance. Core consumer prices are yet to show worrisome readings and inflation expectations remain anchored. Against this backdrop, new inflation reports will be tracked closely. The Consumer Price Index will be published on May 12; import prices were published this morning.
Friday, May 06, 2011
The Great Myth of the Inflation Cure / Economics / Inflation
By: Douglas_French
Parents probably dream of sending their kid to the University of Chicago. Next to the Ivy League or Stanford, the Chicago school is near the top of the heap. Only 27 percent of applicants are admitted. To be among the roughly 15,000 means prestige and an education to build a lifetime on. The cost for tuition and fees: $39,381. Room and board is another $12,000 or so. Add books and other stuff, and the total Chicago-school experience costs $54,290 a year.
Thursday, May 05, 2011
Rising Stock Markets = Signs of Inflation / Stock-Markets / Inflation
By: Submissions
In 2007 or 2008, "While markets across the world have been crashing, the Zimbabwe Stock Exchange has being seeing record gains as citizens turn to equities to protect their money from the country's hyperinflation.
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Thursday, May 05, 2011
Consumer Credit Could Launch Inflationary Spiral / Economics / Inflation
By: Dr_Jeff_Lewis
Recent comments from Walmart chief executive Mike Duke have investors on high alert. This time, though, the news spreads well beyond Walmart.
At a company event in New York, Duke reminded the crowd that retail is softening, “we’re seeing core consumers under a lot of pressure,” and later added that it was rising fuel costs, just another component of monetary inflation, that was driving the sales loss. Of particular interest to inflation watchers should be his comments that were mostly ignored.
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Saturday, April 30, 2011
U.S. Core Inflation Remains Contained, FOMC Policy Stance is Safe / Economics / Inflation
By: Asha_Bangalore
Personal consumption expenditures rose 0.2% in March after an upwardly revised 0.5% jump in February. A 0.4% increase in outlays of services and a 0.1% jump in purchases of durables lifted consumer spending, with a 0.3% drop in expenditures of non-durables were a partial offset. Real consumer spending is projected to advance by 3.0% during the second quarter after a 2.7% gain in the first quarter.
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Thursday, April 28, 2011
The Inflation Inferno / Politics / Inflation
By: MISES
George F. Smith writes: Throughout history, governments have fought against the use of sound money. In 1912, Ludwig von Mises identified the reason for this:
Read full article... Read full article...The sound-money principle has two aspects. It is affirmative in approving the market's choice of a commonly-used medium of exchange. It is negative in obstructing the government's propensity to meddle with the currency system.[1]
Wednesday, April 27, 2011
Fed Wants Even Higher Inflation / Economics / Inflation
By: Axel_Merk
Today, the Federal Reserve Open Market Committee (FOMC) announced it will continue to purchase government securities as previously announced ("QE2"), including reinvesting principal payments from its holdings.
The FOMC downgraded its economic growth forecast, acknowledged inflationary pressures have moved from commodity inflation to core inflation, yet insists inflation remains too low. The Fed considers inflationary pressures to be transitory, but monitors the evolution of inflation and inflation expectations.
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Wednesday, April 27, 2011
The Most Reliable Measure of Real Consumer Price Inflation? / Economics / Inflation
By: Bill_Bonner
We’ve always wondered why there is so much debate about the rate of inflation. It seems like such a simple thing to track. You go in the store. You buy a box of Wheaties. You write down the price. Next month, you do the same thing. What’s so hard about that?
But what if the box is smaller next month? What if the Wheaties are twice as good? What if you can get the same enjoyment from a box of Wheatie-Puffs at half the price?
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Wednesday, April 27, 2011
Nominal Yield (minus) TIPS = Inflation Expectations / Interest-Rates / Inflation
By: Tony_Pallotta
One way to determine inflation expectations is to take the treasury or nominal yield (not inflation adjusted) and subtract the TIPS or real yield (inflation adjusted). The difference of the two is the expected inflation.
Nominal Yield (minus) TIPS = Inflation expectation
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Monday, April 25, 2011
Inflation is No Miracle Cure, Impossible to Inflation Out of this Mess / Economics / Inflation
By: Mike_Shedlock
Inquiring minds are reading The "Miracle" of Compound Inflation by John Mauldin. Here are a few paragraphs worthy of a closer look.
Read full article... Read full article...Albert Einstein is famously quoted as saying, "Compound interest is the eighth wonder of the world." And compounding is indeed the topic of this week's shorter than usual letter, but compounding not of interest but of inflation.
Sunday, April 24, 2011
Deepening Economic Crisis: Inflation, Rising Interest Rates, Surge in the Price of Gold and Silver / Economics / Inflation
By: Bob_Chapman
Economic recovery does not seem to be taking effect in spite of more massive expenditures by Congress and the Fed. The IMF says financial stability has improved, but then again their vision is almost always clouded. US tax revenues are not increasing in a meaningful way, manufacturing struggles to expand and Wall Street flourishes in a cascade of mega salaries and bonuses. In another six months the US will be three years what the government, the media and Wall Street call a deep recession. We call it an inflationary depression, which has existed for 26 months. After eight years of increasing money and credit, and the creation of a real estate bubble, the Fed has been fighting off asset destruction with ever more money and credit accompanied by debt deflation. Part of the Fed’s policy has been zero interest rates, which has helped Wall Street and banking and to a limited extent real estate, but has destroyed the purchasing power of retirees and has driven funds into speculation, which in many cases has ended in ever more losses and less buying power.
Sunday, April 24, 2011
The 'Miracle' of Compound Inflation / Economics / Inflation
By: John_Mauldin
Albert Einstein is famously quoted as saying, "Compound interest is the eighth wonder of the world." And compounding is indeed the topic of this week's shorter than usual letter, but compounding not of interest but of inflation. As you might expect, I am giving a great deal of thought as to how we get out of our current financial dilemma of too much debt and deficits that are far too high. While I will use US data for our illustration, the principles are the same for any country.
Monday, April 18, 2011
Inflation Destroys Real Wages / Economics / Inflation
By: Michael_Pento
In the same vein as medieval physicians believed bloodletting would cure illness, modern snake-oil economists still perilously cling to their claim that rising wages and salaries are the cause of inflation. With my recent debates with these mainstream economists, I've heard the following: "without rising wages, where does the money come from to push prices higher?" I was tempted to respond, "where do the employers get the money to pay those higher wages?" But economists tend to get a little nasty when you make them feel stupid.
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Sunday, April 17, 2011
Inflation Versus Hyperinflation, The Crucial Difference / Economics / Inflation
By: Justice_Litle
Is it possible we will see hyperinflation in the United States? Yes, but not by the route you might think...
"Hyperinflation." You've heard the word. You may have talked about it on the golf course or at the dinner table. (Or even in the grocery store.)
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Saturday, April 16, 2011
U.S. Accelerating Inflation Mega-Trend Whilst Deflationists Continue to Reinvent a History of Worthless Deflation Forecasts / Economics / Inflation
By: Nadeem_Walayat
U.S. CPI Inflation surged higher during March by rising to 2.7% from 2.1% the month before, completely catching the mainstream financial press off guard that continues to take its cues from the Fed central bank deflation propaganda as part of its strategy for massaging the general populations inflation expectations and enabling it to print money aka Quantitative Easing, aided by academics who are paid to follow a school of thought rather than think independently and without any monetary consequences of being wrong which is then further regurgitated at length by salesmen and the BlogosFear.
Saturday, April 16, 2011
U.S. March Consumer Price Index, Fed Finds Itself Between a Rock and a Hard Place / Economics / Inflation
By: Asha_Bangalore
The Consumer Price Index (CPI) rose 0.5% in March, following a similar increase in February. The 3.5% increase of the energy price index and the 0.8% jump in food prices made up three quarters of the overall increase of the CPI in March. On a year-to-year basis, the CPI has risen 2.7% in March, putting the three-month annualized gain at 6.1%. The core CPI, which excludes food and energy rose 0.1% in March, which yields a three-month annualized increase of 2.0%. The acceleration of these inflation measures in a short time period is noteworthy (see Chart 1).
Friday, April 15, 2011
Energy and Car Prices Lift U.S. Wholesale Price Index in March / Economics / Inflation
By: Asha_Bangalore
The Producer Price Index (PPI) of Finished Goods rose 0.7% in March following a 1.6% gain in the prior month. A higher energy price index (+2.6%) and a jump in prices of new light motor trucks (+0.7%) were the main drivers of the overall PPI in March. The 5.7% increase in gasoline prices and 2.7% gain in heating oil stand out among the price gains reported in the March wholesale price report. According to the Bureau of Labor Statistics, over 90% of the increase in the wholesale price index is attributed to the higher energy price index. The 0.2% drop in food prices helped to trim the overall advance of wholesale prices and recorded the first decline in food prices since August 2010.
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Thursday, April 14, 2011
Fed’s Exit Doors Close: Inflationary Spiral Ahead / Economics / Inflation
By: Dr_Jeff_Lewis
The pressure for the Federal Reserve to raise interest rates to put a damper on inflation is growing strong. This week, Reuters reported that Bill Gross’s PIMCO Total Return Fund, the largest mutual fund in the world, had reduced its US Treasury holdings to zero, and then followed the sale with a short-position, signaling to the market that holding US debt is not only risky, but also an entry into an asset class that provides a negative return when adjusted for inflation.
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Sunday, April 10, 2011
Inflation Expectations and The Transmission Mechanism / Economics / Inflation
By: John_Mauldin
TWO roads diverged in a yellow wood, And sorry I could not travel both And be one traveler, long I stood And looked down one as far as I could To where it bent in the undergrowth; Then took the other, as just as fair, And having perhaps the better claim, Because it was grassy and wanted wear; Though as for that the passing there Had worn them really about the same, And both that morning equally lay In leaves no step had trodden black. Oh, I kept the first for another day! Yet knowing how way leads on to way, I doubted if I should ever come back. I shall be telling this with a sigh Somewhere ages and ages hence: Two roads diverged in a wood, and I -- I took the one less traveled by, And that has made all the difference. - Robert Frost
Saturday, April 09, 2011
U.S. Consumer Price Index, Medical Care Costs, and the Paul Ryan Medicare Proposal / Economics / Inflation
By: Asha_Bangalore
Historical trends of the Consumer Price Index (CPI) and the medical care components in the CPI are useful to assess some aspects of the Medicare proposal in the Paul Ryan budget. In the past 20 years, the medical care component of CPI has consistently risen faster than the CPI, with the exception of 2008 (see Chart 1).
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Thursday, April 07, 2011
A Crack in the Great Wall-Mart: China Inflation, Watch Out for Rising Prices / Companies / Inflation
By: Jason_Kaspar
In a widely covered interview last Wednesday, the CEO of Wal-Mart, Bill Simon, warned that “U.S. consumers face ‘serious’ inflation in the months ahead for clothing, food and other products.” He noted: "We're seeing cost increases starting to come through at a pretty rapid rate." Given his purview, I accept Simon’s opinion as positively disconcerting, and if inflation is to hit home in the heartland of America, it will certainly begin at Wal-Mart.
Wednesday, April 06, 2011
Deflationists Blind to the Inflation Storm / Economics / Inflation
By: Jim_Willie_CB
My forecast has been for a powerful Inflationary Recession to occur, a consistently laid out analysis, delivered during the last year or more in clear terms. That has been my call, and continues to be my call. The Deflationist camp is making more noises. They do not know their limitations, which are obstructed by a blind eye toward the monetary inflation. They do not understand it, so they ignore it, and attempt to encapsulate it into a convenient bottle set aside on the margin. Gonzalo Lira will be proved wrong about price inflation showing on the official Consumer Price Inflation index. So what? The prevailing price inflation will ramp past 12% easily as he also predicts. His style is wonderful, even if a mirror is a fixture at his desk. His details in argument are strong and cogent. An anger meter is a fixture at my desk.
Wednesday, April 06, 2011
How Investors Can Avoid the Growing Inflation Threat / Stock-Markets / Inflation
By: Money_Morning
Martin Hutchinson writes:
Pretty much everyone but U.S. Federal Reserve Chairman Ben S. Bernanke sees that inflation is returning: After all, even Bernanke's favorite inflation measure, the Personal Consumption Expenditure (PCE) deflator, was up 0.4% in February - which hints at an annualized inflation rate of almost 5%.
Tuesday, April 05, 2011
Does a Weak U.S. Dollar Cause Inflation? / Economics / Inflation
By: Axel_Merk
Should investors be concerned that a weaker U.S. dollar causes inflation? The price at the gas pump should be a stark reminder that a weaker dollar may contribute to higher prices. Yet, economists tell us that food and energy inflation does not count. Why do economists have such a baffling sense of logic? Are economists really aliens in disguise, locked up in ivory towers? Let’s shed some light on the logic and why it may not merely be strange, but wrong.
Monday, April 04, 2011
Fed Core Inflation Incompetence / Economics / Inflation
By: Michael_Pento
For years the Federal Reserve has told us that in order to detect inflation in the economy it is important to separate "signal from noise" by focusing on "core" inflation statistics, which exclude changes in food and energy prices. Because food and energy figure so prominently into consumer spending, this maneuver is not without controversy. But the Fed counters the criticism by pointing to the apparent volatility of the broader "headline" inflation figure, which includes food and energy. The Fed tells us that the danger lies in making a monetary policy mistake based on unreliable statistics. Being more stable (they tell us), the core is their preferred guide. Sounds reasonable...but it isn't.
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Monday, April 04, 2011
Is Inflation Harmless or Even Good? / Economics / Inflation
By: Robert_Murphy
As Ron Paul's "End the Fed" movement grows, more and more Fed economists are speaking up on behalf of the central bank. In a recent post, David Andolfatto of the St. Louis Fed argues that the systematic debasement of the currency has had a negligible effect on the average American. As we'll see, Andolfatto's evidence is completely irrelevant to the question. The Fed and commercial banks have been ripping off everyone who uses dollars.
Tuesday, March 29, 2011
The Inflation Knuckleball / Economics / Inflation
By: Michael_Pento
By its very definition, fiat money is something created out of thin air: the word "fiat" is Latin for "let it be done" (as in, by decree). But the convenience that such a currency system offers central bankers is paid at the expense of savers.
With nothing of real or lasting value on which to anchor, the value of fiat currencies can always blow away like ashes on a windy day.
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Friday, March 25, 2011
Hidden U.S. Inflation, U.S. Consumers Adjust Spending Habits Amid Soaring Prices / Economics / Inflation
By: Money_Morning
Kerri Shannon writes:
U.S. consumers have watched food and fuel prices eat away at their household budgets, and now those price hikes are spreading to other products - with the worst yet to come.
New York Federal Reserve Bank President William Dudley recently got a taste of public frustration with higher prices. He spoke to a crowd in Queens, New York on March 11 to tackle a mountain of food inflation questions. Dudley told the audience that while some prices are rising, other products are cheaper - like the Apple Inc.'s (Nasdaq: AAPL) latest iPad.
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Wednesday, March 23, 2011
U.S. Inflation Expectations is Key to Change in Fed Policy / Economics / Inflation
By: Asha_Bangalore
The Fed's forecast, published last month, has inflation reaching the threshold of concern only in 2012/2013 (see Table 1) based on the personal consumption expenditure price index and a little later if the core personal consumption expenditure price index, which excludes food and energy, is the preferred price measure. The recent upward trend of the Consumer Price Index (CPI), both the all items index and the core CPI has raised the level of concern.
Tuesday, March 22, 2011
UK Inflation Shock and Awe, CPI 4.4%, RPI 5.5%, Real Hits 7.1%! / Economics / Inflation
By: Nadeem_Walayat
Whilst David Cameron burns £2 million per day by playing at being Monty in the Libyan desert to distract the British population from the unfolding inflation crisis in the UK which soared shock and awe style by rising in February from CPI 4% to 4.4%, which effectively means that the economy has lost £5 billion on the month (annual -£57 billion), whilst the value of accumulated wealth has been eroded by £12 billion (annual -£154 billion), against which the value of government debt has been eroded by £4 billion (annual -£44 billion) and total UK debt by £22 billion (annual -£242 billion), which illustrates the governments unofficial policy of stealth defaulting on debt by means of high inflation, the price for which is being paid by all workers and savers.
Monday, March 21, 2011
Fed and Inflation / Economics / Inflation
By: Dr_Ron_Paul
Last week, the subcommittee which I chair held a hearing on monetary policy and rising prices. Whether we consider food, gasoline, or clothing, the cost of living is increasing significantly. True inflation is defined as an increase in the money supply. All other things being equal, an increase in the money supply leads to a rise in prices. Inflation's destructive effects have ruined societies from the Roman Empire to Weimar Germany to modern-day Zimbabwe.
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Sunday, March 20, 2011
Floating Dollar, Milton Friedman's Contraption / Economics / Inflation
By: Gary_North
On March 12, David Stockman gave a lecture at the Mises Institute in Alabama. I was in attendance. It was a rousing speech, filled with funny one-liners. It reminded me of Patch Adams' listing of euphemisms for death in the hospital room of the guy with terminal cancer. It got us all laughing.
The speech had four important points. First, the Treasury-Federal Reserve bailout in October 2008 was not necessary to save the financial markets. It was necessary to save three or four finance companies that had cooked their books and were facing exposure, meaning write-downs.
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Friday, March 18, 2011
Food and Energy Send U.S. Consumer Prices Sharply Higher / Economics / Inflation
By: Asha_Bangalore
The Consumer Price Index (CPI) rose 0.5% in February after posting increases of 0.4% in December and January. Significant food price gains in the January-February months and three consecutive monthly jumps in energy prices have been the main culprits behind the recent upward trend of the CPI. The CPI has risen 2.1% from a year ago, while the 3-month annualized increase is 5.6%.
Thursday, March 17, 2011
Is U.S. Inflation Already at 9%? / Economics / Inflation
By: Money_Morning
Rising prices are hitting U.S. consumers a lot harder than the U.S. Federal Reserve - or the U.S. government - would have us believe. The government-issued consumer price index (CPI) for January showed that "core inflation" - which includes prices for all items except food and energy - was up only 1% from the same month the year before.
Thursday, March 17, 2011
Food and Energy Prices Lift U.S. Wholesale Inflation / Economics / Inflation
By: Asha_Bangalore
The Producer Price Index (PPI) of Finished Goods rose 1.6% in February following a 0.8% gain in the prior month. A 3.9% increase in food prices and a 3.3% jump in energy prices explain a large part of the increase in the headline number. Higher prices for natural gas (+3.2%), gasoline (+3.7%) and heating oil (+14.6%) contributed for the noticeably higher energy price index. The February increase of food prices (+3.9%) is the largest since November 1974 (+4.2%).
Wednesday, March 16, 2011
Does Economic Growth Cause Inflation? / Economics / Inflation
By: Frank_Shostak
The yearly rate of growth of personal consumer outlays jumped from 2.5 percent in August last year to 3.8 percent this January.
The growth momentum of personal income has been pushing ahead strongly since May last year.
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Saturday, March 12, 2011
Inflation and Hyperinflation in the United States / Economics / Inflation
By: John_Mauldin
A Dose of Inflation
The Characteristics of Hyperinflations
The Problems of Inflation
Hyperinflation in the United States?
Bankruptcies of governments have, on the whole, done less harm to mankind than their ability to raise loans. -- R. H. Tawney, Religion and the Rise of Capitalism, 1926
By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens. -- John Maynard Keynes, Economic Consequences of Peace
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Tuesday, March 08, 2011
Currency Risk in South America – Brazil and Argentina Inflation / Currencies / Inflation
By: David_Urban
Inflation is beginning to rear its head globally. Demand for commodities worldwide is on the rise causing shortages and riots as countries attempt to deal with the problems associated with population growth and a rising, educated middle class. Regime changes across the MENA region are adding additional risk factors to the equation.
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Monday, March 07, 2011
Hidden Inflation: Rising Prices Are Hitting Consumers Harder Than the Fed Will Admit / Economics / Inflation
By: Money_Morning
Kerri Shannon writes: Any U.S. consumer that goes to the grocery store or the gas station on a regular basis knows that prices are rising.
Unfortunately, those rising prices are set to soar even higher - and their effects on consumers will continue to be ignored by the U.S. Federal Reserve.
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Saturday, March 05, 2011
The Fed's Promise of Inflation Means More Unemployment... / Economics / Inflation
By: Bob_Chapman
The Federal Reserve tells us we need inflation to overcome the overhang created by debt and its inflationary aspects. The inflation does not create jobs – it just distorts prices upward. We are told by the head of the Fed, Mr. Bernanke, that he can end inflation when he thinks it is necessary. That is not true, because if inflation ends deflation takes command and the economy collapses. There is no finely honed instrument for turning these two opposite effects on and off; thus, inflationary instruments have to be blunt and overused. That means more often than not that inflation is over implemented. This is the opposite of the Fed’s mandate of promoting price stability, full employment and in fact is used to prop up the banking system.
Saturday, March 05, 2011
China – The 800-Pound Inflation Gorilla! / Economics / Inflation
By: Sy_Harding
When it comes to the growing global worries about inflation, it looks like it will be ‘As goes China so goes the world’.
China is the 2nd largest economy in the world, and rapidly gaining on the U.S. Among other statistics, it’s the world’s largest importer of copper, steel, cotton, and soybeans, and the world’s largest exporter of goods - to say nothing of being the world’s largest owner of U.S. debt.
Friday, February 25, 2011
Food Price Inflation Calculator / Commodities / Inflation
By: Richard_Daughty
Mark Thornton of the Mises Institute writes, "The price of everything seems to have skyrocketed. Only housing, the dollar and inflation-adjusted income are negative."
I immediately interrupt to wittily say, "Well, housing is going down because nobody wants to buy a still-over-priced-yet-even-lower-quality house that now needs painting, a new water heater, some leaky things fixed and a new roof, especially now that inflation-adjusted incomes are negative!"
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Thursday, February 24, 2011
Inflation Is Here, and It Is Going to Get Worse / Economics / Inflation
By: Frank_Shostak
As compared to September last year, the growth momentum of price indexes shows visible strengthening. Year on year, the rate of growth of the consumer price index (CPI) rose to 1.6 percent in January from 1.5 percent in the month before and 1.1 percent in September last year. Also the growth momentum of the consumer price index less food and energy has strengthened in recent months. The yearly rate of growth climbed to 1 percent from 0.8 percent in December and 0.6 percent in October.
Thursday, February 24, 2011
Ben Bernanke's Counterfeiting Behind North Africa Revolutions / Politics / Inflation
By: Bill_Bonner
Cereal Wars…and Zombie Wars…
Hey, how ’bout that Ben Bernanke… He’s a freedom fighter! Look what he’s done to North Africa!
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Thursday, February 24, 2011
What the Looming Inflation Tsunami Means for the U.S. Housing Market and Commodities / Stock-Markets / Inflation
By: Money_Morning
Kerri Shannon writes: A few weeks ago, Money Morning Contributing Editor Martin Hutchinson warned readers about the looming inflation tsunami threatening the United States.
Easy money policies like those of the U.S. Federal Reserve and other central banks have helped raise prices in emerging markets, as well as the United States, and sent the commodities sector surging.
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Friday, February 18, 2011
Calculating the Misery of Inflation / Economics / Inflation
By: Richard_Daughty
I was, unfortunately, sober enough to realize that I needed to get a lot drunker if I was going to withstand the horror of reading of even more economic fallout of the Federal Reserve's disastrous decisions to create So Freaking Much Money (SFMM).
In particular, Michael Pento, in an essay in the Euro Pacific's Weekly Digest newsletter, writes, "For the year 2010, the trade gap surged 43%, which was the biggest jump in a decade, as our government's efforts to reignite consumer borrowing and spending led to a record number of imported consumer goods."
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Friday, February 18, 2011
Food and Energy Prices Major Culprits in U.S. Consumer Price Index Gains / Economics / Inflation
By: Asha_Bangalore
The Consumer Price Index (CPI) rose 0.4% in January, after a similar increase in the prior month. The difference between December and January price data is that food (+0.5%) and energy (+2.1%) and the core CPI (+0.2%), which excludes food and energy, rose in January, while higher energy prices (+4.0%) played the major role in December. The CPI has moved up 1.63% from a year ago, which is a 48 bps increase since June 2010 (+1.05%), the recent low for the CPI (see Chart 1). Higher food and energy prices accounted for two thirds of the increase in the overall CPI in January.
Thursday, February 17, 2011
The Fed is Wrong – Inflation Has Arrived! / Interest-Rates / Inflation
By: Sy_Harding
Fed Chairman Bernanke says inflation is still benign and not a concern. He’s wrong! And he’s behind the curve, dangerously so!
Inflationary pressures have been rising and recognized in many major global economies for quite some time, which has had their central banks raising interest rates and tightening monetary policies in efforts to bring rising prices under control. So far without effect, thanks to the intensity of the inflationary pressures.
Thursday, February 17, 2011
The Fed's Policy of Creating Inflation: A Massive Wealth Transfer / Economics / Inflation
By: Prof_Rodrigue_Trembl
"If once [the people] become inattentive to the public affairs, you and I, and Congress and Assemblies, Judges and Governors, shall all become wolves. It seems to be the law of our general nature, in spite of individual exceptions." Thomas Jefferson (1743-1826), 3rd US President
"If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered." Thomas Jefferson (1743-1826), 3rd US President
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Thursday, February 17, 2011
Money Flows, Where Will It Go? / Commodities / Inflation
By: Dr_Jeff_Lewis
The price of money is rising, especially as it relates to time. With inflation fears growing and governments local and federal looking toward record deficit and financing requirements, strain is beginning to take its toll on the bond markets. Treasuries are rising, and muni bonds, which are generally very slow in their price action, have reached peak volatility.Read full article... Read full article...
Thursday, February 17, 2011
Bank of England Quarterly Inflation Propaganda Report Attempts to Mask Stagflation / Economics / Inflation
By: Nadeem_Walayat
The Bank of England latest quarterly inflation report continued the trend of pumping out economic propaganda masquerading as forecasts so as to better manage the British populations inflation expectations and prevent a wage price spiral from taking hold by continuing the mantra of temporary factors driving inflation as each month for the past year the Bank of England MPC has danced between differing temporary factors.
Wednesday, February 16, 2011
Inflation Fools and Central-Bank Clowns / Economics / Inflation
By: Adrian_Ash
With interest rates impotent, more or less quantitative easing looks the only policy choice open...
YOU CAN'T BLAME the financial press for being so wrong, so often.
Every financial decision you might make today is now a speculation on what will happen to interest rates. So pretty much every story a financial journalist might write starts and ends with central-bank cant, too. Because outside the inaction of each monthly vote, central-bank policy is a mass of half-truths and bunk.
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Wednesday, February 16, 2011
The Politics of Inflation / Economics / Inflation
By: Axel_Merk
In arguing food inflation is not the Federal Reserve’s (Fed’s) fault, Fed Chairman Bernanke points the finger at everyone but him. Just as with a lot of Bernanke’s policies, his argument may hold in an academic setting, but the real world is a bit more complicated.
Summarizing the greatest money printing experiment in monetary history, Bernanke proudly stipulates that the program has been “effective”, because:
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Wednesday, February 16, 2011
China Inflation: Getting Worse and Coming To A Wal-Mart Near You / Economics / Inflation
By: Dian_L_Chu
On Tuesday Feb. 15, China reported its consumer prices (CPI) rose 4.9% year-over-year (yoy) in January, which came in less than expected. Economists were expecting 5.4% inflation, based on a Bloomberg survey.
However, after digesting the data, Asian markets closed mixed on that news, with China’s Shanghai Composite staying flat after a choppy trading session.
Tuesday, February 15, 2011
U.S. Economy Flight 666, On a One Way Inflation Ticket To Zimbabwe Part2 / Economics / Inflation
By: D_Sherman_Okst
Part 1 Here: In the fine book “I.O.U.S.A.” former Comptroller General David Walker said, ”[The] fourth and most serious of all is a leadership deficit.” The material I reviewed underscores Walker’s observation.
I’m a huge Paul Ryan fan. I’m impressed with his handle on our budget. I give him a tremendous amount of credit for addressing our dismal fiscal situation head on. I commend him for making it the center of his work. This is something most politicians refuse to even mention, let alone address in public.
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Tuesday, February 15, 2011
Why Increasing Bank Credit Can Only End in Catastrophe / Interest-Rates / Inflation
By: Richard_Daughty
I have to admit that I was stunned that Fed Credit (the magical fairy dust from which money appears out of thin air) two weeks ago went up by a huge $19 billion, which the Fed itself used to buy $18.4 billion in government debt. In one week! In One Freaking Week (OFW)!!
As Eric Fry, Editorial Director of The Daily Reckoning, puts it, "The effect of this bizarre transaction is that one branch of the government issues debt securities, while another branch of the government purchases those securities"!!!
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Tuesday, February 15, 2011
U.S. Fed Inflation Policy Means The Weak and the Slow Get Crushed / Economics / Inflation
By: Fred_Sheehan
"We do not now have a problem.... Inflation made here in the U.S. is very, very low" - Federal Reserve Chairman Ben S. Bernanke, February 10, 2011
"Inflation is a means by which the strong can more effectively exploit the weak.... [Inflation] introduces an element of deceit into our economic dealings.... [T]he increasing uncertainty in providing privately for the future pushes people who are seeking security toward the government." - Federal Reserve Governor Henry C. Wallich, Fordham University, Commencement Address, June 28, 1978
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Tuesday, February 15, 2011
UK Inflation CPI 4%, RPI 5.1%, Real 6.6%, Pressure Building on Wage Price Spiral / Economics / Inflation
By: Nadeem_Walayat
UK Inflation for January 2011 leapt to CPI 4% from 3.7%, leaving the Bank of England Governor, Mervyn King to press print on another letter full of worthless excuses as to why high Inflation is still temporary more than a year on. The facts are that the Bank of England via its policy of HIGH Inflation is destroying a lifetime of accumulated capital of savers, as interest earned on savings after tax will be lucky to be at HALF the official inflation rate, never mind the actual inflation rate that is nearer to 6.6%, all as part of the continuing programme for the transference of wealth from tax payers and savers onto the balance sheets of the bailed out banks that generate fictitious profits on the basis of which billions are paid out in bonuses.
Tuesday, February 15, 2011
U.S. Economy Flight 666, On a One Way Inflation Ticket To Zimbabwe / Economics / Inflation
By: D_Sherman_Okst
I’ve finally had the time to thoroughly study Bernanke’s entire Press Club speech, his appearance before Representative Paul Ryan’s House Budget Committee and bulk of the recently released 2005 FOMC minutes.
The conclusion I have drawn from all this data is that the captain of our economy, Ben Bernanke, is either an economic imbecile or a financial terrorist. Through evil intent, or sheer stupidity, the outcome remains unchanged. The bottom-line: He has hijacked our economy flight and changed our destination. Bernanke is about to crash Flight 666 and all 308 million of us sitting helplessly in the passenger cabin into Zimbabwe’s airport known as Hell’s Hyperinflation Field.
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Tuesday, February 15, 2011
Inflation Grand Theft USA – Prices Go Parabolic / Economics / Inflation
By: PhilStockWorld
Two percent! That’s how much the price of EVERYTHING has gone up IN AMERICA since Christmas Day, just 6 weeks ago. This is according to the very reliable Billion Prices Project at MIT, which collects pricing data every day from online retailers using a software that scans the underlying code in public webpages and stores the relevant price information in the database. The daily online index is an average of individual price changes across multiple categories and retailers that provides real-time information on major inflation trends.
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Saturday, February 12, 2011
Evidence Supports Benign Near Term U.S. Inflation Trend / Economics / Inflation
By: Asha_Bangalore
Inflation is not the headline story of 2011; albeit a few glaring monthly readings due to higher food and energy prices are possible. On what grounds can we be sure of this claim? First, the current readings of inflationary measures are below levels consistent with price stability. The FOMC's preference is 2.0% or slightly below 2.0% inflation readings. As shown in Chart 1, inflation measures have posted gains below 2.0% in recent monthly reports and projected growth of the economy in 2011 suggests a benign inflationary environment.
Friday, February 11, 2011
QE2 Sets Off Inflation Alarms / Economics / Inflation
By: Mike_Whitney
Ever since he launched the second round of his bond-buying program (QE2), Ben Bernanke has been on a roll. The S&P has gained 10 percent and the economic data has improved dramatically. Manufacturing and retail have rebounded, consumer confidence has started to brighten, and personal consumption (PCE) is on the rise. Car sales, hotel occupancy and exports are all up, too. Even the banks seem to be more eager to lend than they were just a few months ago. Only housing is still in the doldrums and the Fed chairman probably has something up his sleeve for that, too.
Friday, February 11, 2011
Decoding the Truth About Inflation / Economics / Inflation
By: Richard_Daughty
Proving once again that investing in fixed-yield bonds when the foul, filthy Federal Reserve is creating so much money (so that their governments can deficit-spend it!) is a stupid, stupid, stupid idea because inflation will result, Agora Financial's 5-Minute Forecast newsletter reports that "Already since October, the rate on the 10-year has jumped from 2.4% to 3.6% - a 50% increase." Yikes!
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Friday, February 11, 2011
Inflation - Advanced Economies vs. Emerging Economies / Economics / Inflation
By: Asha_Bangalore
The Bank of England (BOE) and The European Central Bank (ECB) have chosen to stand pat after their recent policy meetings. However, inflation readings in the UK and the Euro area are problematic, particularly in the UK. President Trichet of the ECB, last week, presented a less concerned stance about inflation compared with his comments in prior weeks. Inflation in the Euro area (2.2%) is slightly higher than the target rate of 2.0%.
Thursday, February 10, 2011
Investors Finally Fear the Inflation Precipice / Stock-Markets / Inflation
By: Robert_Murphy
Well it's about time. The headline on Monday's CNBC article announces: "Investors Starting to Believe That Inflation Threat is Real."
For some time, I have been a proud member of the fuddy duddies who have been predicting the return of serious stagflation. Thus far, our prognostications have clearly been half-right — the "real economy" is indeed caught in a terrible rut, far worse than most of the Keynesian economists recognized even in late 2008.
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Wednesday, February 09, 2011
G7 Banana Republics ON the Money Printing Inflation Road to ZIMBABWE! / Economics / Inflation
By: Ty_Andros
The global financial cataclysm is mushrooming with every stroke of the keyboard at a central bank, with the issuance of new debt to cover old debt, and with the illusion of creating money out of thin air. It is all debt, nothing else, with no final settlement…. EVER. You exchange the money you work for and save and buy a government bond; they print the money to pay you back and PRETEND you have been paid. The situation is just as Von Mises outlined:
Wednesday, February 09, 2011
How to Beat the Looming Inflation Tsunami / Economics / Inflation
By: Money_Morning
Martin Hutchinson writes:
Inflation is coming our way. Make no mistake about it.
This insidious increase in the general level of prices is currently rattling around in the world's emerging markets - causing China and Brazil to put up interest rates and India to try and suppress it with price controls. It's beginning to appear in Britain, which had a similar crash to the United States, but where the currency has been somewhat weaker.
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Wednesday, February 09, 2011
Phony Official Inflation Statistics Produced by Dirty Rotten Scoundrels / Economics / Inflation
By: Rob_Kirby
The purpose of this paper is to draw particular attention to the recent disparity in crude oil prices – namely the difference between two benchmarks - West Texas Intermediate [WTI] and Brent [North Sea] Crude. Historically the price of WTI trades at a premium to lesser quality Brent North Sea Crude. This paper lays out the case that the extreme, existing, observable price discrepancies is likely the result of engineered and arbitrary market manipulations – to be discussed below. Such arbitrary price manipulations in the oil markets impact negatively on the oil exporting economies and show favor to oil importing economies.
Wednesday, February 09, 2011
China, Inflation and Gold, China created paper money and paper money then created Inflation / Economics / Inflation
By: Darryl_R_Schoon
Ralph T. Foster in his invaluable book, Fiat Paper Money, The History and Evolution of Our Currency, writes that paper money made its first appearance in Szechwan, a remote province of China early in the 11th century.
Because of a shortage of copper coins, provincial officials had begun circulating iron coins; but the difference in value and weight between the two metals caused unexpected problems.
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Friday, February 04, 2011
The Cause and Evidence of Inflation / Economics / Inflation
By: Michael_Pento
In a heated debate on the February 1st episode of CNBC's "The Kudlow Report", financial commentator Donald Luskin offered his "textbook" definition of inflation as "an overall rise in the general price level." I countered with the "dictionary" definition. My 1988 edition of Webster's Dictionary defines inflation as follows: "An increase in the volume of money and credit relative to available goods, resulting in a substantial and continuing rise in the general price level." [Emphasis added.] These differences are not academic and go a long way toward explaining why economists argue so vociferously.
Wednesday, February 02, 2011
How the US Government Manipulates Inflation Data / Economics / Inflation
By: PhilStockWorld
The PCE bothered me yesterday.
The Government told us that the PCE core price index for December was 0% - no inflation at all. I found that to be incredible - as in not credible at all and then Tusked asked me how long the Bernank could keep justifying his rampant money printing with fake government data, to which I responded: "I had many derogatory things to say about that but I was literally so sickened by that BS that I couldn’t bring myself to comment on it so I just left it alone but it’s a very sad joke that our government can tell us that there was no inflation in December while the whole planet is falling apart, isn’t it?"
Tuesday, February 01, 2011
Inflation is Here to Stay / Economics / Inflation
By: Michael_Pento
In current economic analysis, inflation is largely in the eye of the beholder, and depending on how you choose to look, very different stories emerge. In the U.S., food and beverages count for just 16.4% of the CPI calculation. The Chinese apparently believe that the basic necessities of life should count for more, assigning a 33% weight to the nutritional components. These differences in measurement are partially responsible for the divergent inflation climate in both countries, and make most people believe that inflation is fickle and localized. From my perspective, inflation is a global wave that will ultimately swamp all shores.
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Tuesday, February 01, 2011
China’s Inflation Rate Nudges U.S. Retailers to Look to Other Asian Suppliers / Economics / Inflation
By: Money_Morning
Kerri Shannon writes:
China's inflation rate is climbing faster than expected, triggering a wave of price increases across the country and spurring foreign companies to search elsewhere for suppliers.
China's consumer price index hit 4.6% in December and 5.1% in November - it's highest level in 28 months. Annual inflation for 2010 was 3.3%, which is above the government's 3% target rate.
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Friday, January 28, 2011
Inflation to Help the Less Fortunate? / Politics / Inflation
By: Richard_Daughty
I almost didn't read the essay by Gary Gibson, the managing editor of the Whiskey & Gunpowder newsletter, because he was talking about Paul Krugman, whom Mr. Gibson refers to as "cheerleader of the state," and for whom I have a much, much lower opinion, probably because of my envy of his career success despite being, as far as I can tell, a complete failure in predicting the bursting messes we are in, or ever warning against them as they were building, when it was obvious to the Austrian economists all along.
Friday, January 28, 2011
Stocks and and Price of Butter / Politics / Inflation
By: Fred_Sheehan
"We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again." ~ President Barack Obama, State of the Union speech, January 25, 2011
Maybe President Obama was at a loss to validate the rousing economy in his State of the Union address. Whatever the reason, this was a strange appeal to the American people. An even stranger validation of Wall Street's prowess was expressed last week by Federal Reserve Chairman Ben S. Bernanke.
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Wednesday, January 26, 2011
New World Order: Food Price Inflation; House Price Deflation / Economics / Inflation
By: Richard_Daughty
You can tell by my bleary, bloodshot eyes, my rumpled appearance, my musky aromas and my overtly hostile attitude that I have been holed up in the Mogambo Armageddon Bunker (MAB), scared out of my mind about the inflation in prices that is surely going to consume us, thanks to the unholy Federal Reserve creating so incredibly much, so stupendously much, so astoundingly much, So Freaking Much Money (SFMM).
Wednesday, January 26, 2011
Obama Fails to Address Inflation in State of the Union / Politics / Inflation
By: Submissions
President Obama's State of the Union address last night did not make one single mention of inflation, when it is the belief of NIA that massive price inflation (especially food inflation) will become America's top crisis by the end of this calendar year. Obama's speech also failed to mention the Federal Reserve, the Federal Funds Rate being held near 0% for over two years, and the Fed's latest round of $600 billion in quantitative easing. Unless Obama addresses our nation's fiat currency system, nothing else he says has any meaning at all.Read full article... Read full article...
Wednesday, January 26, 2011
Hidden Inflation Food Prices Flying Under the Fed's Radar / Economics / Inflation
By: Money_Morning
Jason Simpkins writes:
Soaring food prices have been, perhaps, the most pressing global issue of the past two years – yet the U.S. Federal Reserve has taken a "hear no evil, see no evil, speak no evil" approach to the global crisis.
Instead, the Fed has dutifully maintained its focus on so called "core inflation" in the United States – even as Americans suffer the consequences of the "hidden inflation" the government refuses to account for.
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Monday, January 24, 2011
UK Inflation Forecast 2011, Imminent Spike to Above CPI 4%, RPI 6% / Economics / Inflation
By: NewsLetter
The Market Oracle NewsletterJan 17th, 2011 Issue #1 Vol. 5
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Sunday, January 23, 2011
China vs. Inflation: A Love-30 Match So Far / Economics / Inflation
By: Dian_L_Chu
China released a slew of important economic data on the evening of Wednesday, Jan. 19, and markets were paying particular attention to China’s inflation. In order to put out the wild fire of inflation, China's central bank raised interest rates twice, and increased the reserve ratio for lenders four times in the span of just last two months.
Thursday, January 20, 2011
China's Inflation Problem Looms Large / Economics / Inflation
By: Peter_Schiff
The global economy has become so unbalanced that even government ministers who would normally have trouble explaining supply or demand clearly recognize that something has to give. To a very large extent the distortions are caused by China's long-standing policy of pegging its currency, the yuan, to the U.S. dollar. But as China's economy gains strength, and the American economy weakens, the cost and difficulty of maintaining the peg become ever greater, and eventually outweigh the benefits that the policy supposedly delivers to China. In the first few weeks of 2011 fresh evidence has arisen that shows just how difficult it has become for Beijing.
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Wednesday, January 19, 2011
Protect Your Wealth from Central Bank Lies on Inflation / Economics / Inflation
By: Claus_Vogt
If you believe what central banks say and you plan your investments accordingly, you could be in for some big surprises.
Consider, for example, some of the lies spouting forth from the U.S. Fed and the European Central Bank (ECB) …
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Wednesday, January 19, 2011
UK Inflation CPI Hits 3.7%, Higher than Zimbabwe, Britain Sleep Walking towards Wage Price Spiral / Economics / Inflation
By: Nadeem_Walayat
UK Inflation for December 2010 soared to CPI 3.7% from 3.3% which is set against academic economist expectations of just a few hours earlier of 3.3%. This now puts UK inflation Higher than that of hyperinflation prone Zimbabwe's CPI at 3.2%, thus making a mockery of long standing commentary in the press that it was ridiculous to compare Britain's inflation problems with that of Zimbabwe.
Tuesday, January 18, 2011
The Many Euphemisms for Money Creation Inflation, Confused Language, Confused Thinking / Economics / Inflation
By: Thorsten_Polleit
According to the teachings of the Greek philosopher Parmenides, language illustrates human thinking (and reasoning); confused language is thus tantamount to confused thinking; confused thinking, in turn, provokes unintended acts and undesired outcomes.[1]
"Doublespeak" — a term that rose to prominence through the work of Eric Blair (1903–1950), more famously known as George Orwell — is a conspicuous form of confused language and thought. The term doublespeak was actually derived from the terms "newspeak" and "doublethink," which Orwell used in his novel Nineteen Eighty-Four, published in 1949.[2] While under suppressive Party instruction, the mind of the protagonist, Winston Smith
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Tuesday, January 18, 2011
Further Misery for Savers as Inflation Hits CPI 3.7% / Personal_Finance / Inflation
By: MoneyFacts
Inflation figures released today show the Consumer Price Index increased by 0.4% to 3.7% during December.
To beat inflation, a basic rate tax payer at 20% needs to find a savings account paying 4.63% pa, while a higher rate tax payer at 40% needs to find an account paying at least 6.17%.
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Monday, January 17, 2011
UK Inflation Forecast 2011, Imminent Spike to Above CPI 4%, RPI 6% / Economics / Inflation
By: Nadeem_Walayat
The last UK inflation data came in at CPI 3.3% and RPI 4.7% for November 2010, with real inflation at just above 6%, this is set against a continuous mantra in the mainstream press by pseudo economists / journalists that high inflation of above 3% was always just temporary and that it would resolve in a sub 2% rate by the end of the year (2010). Now a year on the same people that had misguided their readerships for virtually the whole of 2010 into avoiding inflation protection strategies that the coalition government has proceeded to strip away during 2010 such as scrapping of the RPI linked Index Linked National Savings certificates in June 2010, and are only now warning their readership's of the consequences of persistently high inflation that looks set to continue during 2011.
Friday, January 14, 2011
Wholesale Price Index Lifted by Higher Energy, Food and Cigarette Prices / Economics / Inflation
By: Asha_Bangalore
The Producer Price Index (PPI) for Finished Goods rose 1.1% in December after a 0.8% increase in the prior month. According to the Labor Department, about 75% of the increase in finished goods price index was from the 3.7% jump of the energy price index. Of the energy items in this index, gasoline prices posted the largest increase. Higher food prices (+0.8%) also made a contribution to the overall wholesale price index, a large part of this increase (75%) is traced to the 22.8% jump in prices of fresh and dry vegetables. In 2010, the wholesale price index has risen 4.0% after a 4.3% jump in 2009 and a nearly 1.0% drop in 2008.
Friday, January 14, 2011
Economic Ruination from Money Creation to Price Inflation / Economics / Inflation
By: Richard_Daughty
John Rubino at Dollar Collapse.com obviously thinks, like I do, that inflation is a Terrible, Terrible Thing (TTT).
To prove it, and to simultaneously prove to my wife, kids, relatives, co-workers and neighbors that I am not the "weirdest man who ever lived" as concerns inflation, I call him up on the phone!
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Thursday, January 13, 2011
U.S. Inflation Set to Soar as the Country's Chief Export Boomerangs Back Home / Economics / Inflation
By: Money_Morning
Martin Hutchinson writes:
While prices for food and energy have been rising, inflation in the United States has remained relatively subdued.
One common explanation for that phenomenon is that U.S. inflation has been "exported" to China and elsewhere through the U.S. Federal Reserve's monetary policy. And given the perennial U.S. balance of payments deficit, it's good to know the country has found something it can successfully export!
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Thursday, January 13, 2011
Rising Consumer Inflation: The New World Order By Commodity / Economics / Inflation
By: Dian_L_Chu
Ever since the Great Recession, inflation has been put on the back burner, and deflation is seen as the greatest risk to the U.S. economy. Even as recent as Friday, Jan 7, Federal Reserve Chairman Bernanke told the Senate Budget Committee that low inflation/deflation was a concern, as well as unemployment (more on the jobs situation here.)
Wednesday, January 05, 2011
Price Inflation to Pay the Debt / Economics / Inflation
By: Richard_Daughty
The lights of the Mogambo Security System (MSS) glowed dimly in the gloom of the bunker as I cowered in the darkness, and there were no sounds except the thumping, thumping, thumping of my terrified heart at The World Outside (TWO), a place I consider to be a vicious, hostile environment containing not only enemies of every sort, both real and imagined, but family members who want to know if I am coming out for dinner, or to tell me that someone is on the phone for me, or that somebody is going to greedily eat the last of my treasured Double-Stuf Oreos, somehow trying to get me outside and into their clutches so that they can take all my money and ask me to sign various forms and documents.
Monday, January 03, 2011
United States Postal Service Announces Forever Stamps / Personal_Finance / Inflation
By: Peter_Schiff
The United States Postal Service announced this week that all future first class postage stamps sold will be the so-called "forever stamps" that have no face value but are guaranteed to cover the cost of mailing a first class letter, regardless of how high that cost may rise in the future. Currently these stamps are sold for 44 cents, but will increase in price if and when the Post Office hikes rates.
Wednesday, December 29, 2010
Is Inflation Directly Tied to the Money Supply? / Economics / Inflation
By: Justice_Litle
Some argue that increased money supply (freshly printed dollars) automatically translates to inflation. This is not exactly true, and it’s important to understand why.
How do you define inflation? In some ways it's a slippery thing, like trying to nail Jell-O to a tree. One common definition amounts to "a general and sustained rise in the price of goods and services." Another is "a persistent decline in the purchasing power of money."
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Thursday, December 23, 2010
The Inflation Waves of 2011 / Economics / Inflation
By: John_Browne
One of the founding myths of the modern global financial system was that governments, especially of the developed democracies, could borrow endlessly without consequence. But, with sovereign debt crises erupting across the globe, it appears that the umbrella of perceived safety has gotten smaller, exposing some benighted countries, like Greece and Ireland, to severely rough weather.
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Thursday, December 16, 2010
U.S. Inflation Consumer Price Index Contains No Surprises / Economics / Inflation
By: Asha_Bangalore
The Consumer Price Index (CPI) rose 0.1% in November following a 0.2% gain in the prior month. The CPI has risen 1.1% from a year ago compared with a 1.8% gain in the 12-month period ended November 2009. Energy prices increased only 0.2% in November vs. a 2.6% gain in October. The price index for natural gas (-5.7%) fell but gasoline prices (+0.7%) advanced for the fifth straight month, with November recording the smallest of these five monthly gains. The food price index moved up 0.2% in November after a 0.1% increase in the prior month. The important message is that the CPI continues to show a distinct decelerating trend (see Chart 1).
Wednesday, December 15, 2010
Fed Inflation / Economics / Inflation
By: Axel_Merk
In August, Federal Reserve (Fed) Chairman Bernanke stated inflation was too low; in October, the Fed's Minutes lamented that the market appeared not to take Bernanke's August statements seriously enough. In our assessment, today's Fed statement of the Fed's Open Market Committee (FOMC), with an almost verbatim repetition of the previous FOMC statement, screams: "markets: trust us, we mean what we say."
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Tuesday, December 14, 2010
Bank of England's Inflation Targeting Mandate is Bankrupt as CPI Rises to 3.3% / Economics / Inflation
By: Nadeem_Walayat
UK Inflation for November rose once more to hit 3.3% form 3.2% which makes a mockery of the Bank of England's primary objective of targeting CPI inflation at 2%, instead of which UK inflation has been above 3% for virtually the whole of 2010. Not far behind the bankrupt Bank of England's temporary high inflation mantra is the mainstream press and major institutions and so called think tanks that have lapped up the Bank of England's Deflation threat propaganda and sleep walked their readers into high inflation disaster as inflation protection props have been pulled away one by one (NS&I RPI Indexed Certificates).
Sunday, December 12, 2010
Russia's Central Bank Concerned About Price Inflation Tsunami / Economics / Inflation
By: Pravda
Sergey Ignatyev, the head of the Russian Central Bank, did not exclude a possibility to raise the official bank rate next year to curb inflation. Ignatyev forecast the growth of crediting and the economy in 2011 by 20 and 5 percent respectively.
In November, the board of directors of the Central Bank (CB) decided to preserve the level of the official bank rate and interest rates on CB operations. The official bank rate was preserved on the level of 7.75 percent per annum on June 1, 2010.
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Thursday, December 09, 2010
Wealth Confiscation Through Inflation / Economics / Inflation
By: Mike_Hewitt
A monologue on currency devaluation through the process of inflation.
Greetings, I would like to talk about a subject of which I believe to be of great importance. It is to do with the devaluation of our currency.
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Tuesday, December 07, 2010
China Inflation Taking Off, Declares Price Controls on Walmart / Economics / Inflation
By: Mike_Shedlock
China's is overheating. Consumer prices in aggregate rose at an annual rate of 4.4% as of October. Food prices are up 10.1 percent according to China Financial Daily.
Moreover, accelerating inflation is hurting profit margins in China's service sector. China's non-manufacturing PMI fell to a nine-month low in November, with new orders in consumer service industries showing outright contraction.
Tuesday, December 07, 2010
Bernanke Is 100% Sure He Can Control Inflation / Economics / Inflation
By: James_Quinn
I don't know about you, but I'm not 100% sure about anything. The older I get, the less sure I am about everything. I question things that I was sure were true when I was 25 years old. I'm not sure I'll wake up in the morning. I'm not sure I'll survive my commute to work. That is why I was flabbergasted last night as I watched Scott Pelley interview Ben Bernanke on 60 Minutes. As a side note, boy this show has gone downhill. In the old days of real journalism, Mike Wallace would have scorched Ben Bernanke, pointing out his phenomenal ability to be wrong or clueless on every financial issue the country has faced in the last 10 years. Today, Pelley under hands softball questions to Bernanke and never challenges him. It was a pathetic display of journalism.
Monday, December 06, 2010
Gold, Keynesian Economics and Wall Street Journal Deflation Idiocy / Economics / Inflation
By: Howard_Katz
Friday’s Wall Street Journal was full of “optimistic” news for the U.S. economy. It reported:
“Retailers’ reports of robust November sales offered more evidence that the lackluster U.S. economy may finally be gaining momentum, despite stubbornly high unemployment.
“According to 27 retailers tracked by Thomson Reuters, sales at stores open a year or more rose 6% last month, sharply exceeding a year-earlier gain of just 0.5%. Online retailing also showed sizable gains.”
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Friday, November 26, 2010
The Best Way To Play U.S. Sleeper Inflation / Economics / Inflation
By: Sean_Brodrick
Like gasoline seeping across a floor, inflation is slowly spreading across the globe, waiting to ignite. When it finally combusts, the move higher in prices could be explosive. Yet many U.S. citizens are going to be caught totally unaware because prices — for now — are generally flat and even falling.
This has opportunity written all over it. I’ll get to that in a bit. First, some facts on how the signs of deflation are around us:
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Friday, November 26, 2010
BLS Makes Sure there is No U.S. Food Inflation / Economics / Inflation
By: Fred_Sheehan
"Moreover, inflation has been declining and is currently quite low, with measures of underlying inflation running close to 1 percent....In this environment, the Federal Open Market Committee (FOMC) judged that additional monetary policy accommodation was needed to support the economic recovery and help ensure that inflation, over time, is at desired levels." -Federal Reserve Chairman Ben S. Bernanke, Sixth European Central Bank, Central Banking Conference; Frankfurt, Germany; November 19, 2010
Tuesday, November 23, 2010
Commodity Price Inflation, What is Likely Impact in the United States? / Commodities / Inflation
By: Asha_Bangalore
The S&P GSCI commodity index has moved up 11.3% from a year ago on November 19, 2010 (see Chart 1). The trade weighted dollar declined 1.2% from a year ago as of November 12, 2010. The immediate inference is that the extent of gains in the commodity price index is larger than the decline of the dollar. By implication, commodity price gains reflect more than the depreciation of the greenback.
Saturday, November 20, 2010
Is Inflation Lurking Around the Corner? / Economics / Inflation
By: Asha_Bangalore
The potential inflationary impact of the second round of quantitative easing, QE2, is at the top of the list of charges critics have complied against the Fed. Let us look at the current evidence on inflation, inflation expectations, and the Fed's tool kit to fight inflation to conclude if the fear of inflation is credible.
Starting with the Consumer Price Index (CPI), the October CPI rose 0.2% and the core CPI, which excludes food and energy, held steady. The year-to-year change of both price measures shows a decelerating trend since the early part of the year (see chart 2).
Thursday, November 18, 2010
U.S. Inflation Remains Contained, In Contrast to Fed’s Preference / Economics / Inflation
By: Asha_Bangalore
The Consumer Price Index (CPI) moved up 0.2% in October, after a 0.1% gain in the prior month. The year-to-year change is 1.2%, with the CPI trending down after a 2.7% increase in December. During the July-October period, energy prices have lifted the overall CPI. In October, higher gasoline prices (+4.6%) were responsible for nearly 90% of the increase in the CPI. The CPI excluding energy held steady in October after a similar reading in the prior month. Food prices inched up 0.1% in October, putting the year-to-year gain at 1.4%.
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Tuesday, November 16, 2010
Quantittaive Easing Ignites Real Price Inflation / Economics / Inflation
By: Q1_Publishing
The Federal Reserve’s moves are backfiring.
The Fed’s recent announcement that it’s going to keep the free money spigot flowing for at least another six months was the last straw.
Monday, November 15, 2010
Bank of England Inflation Propaganda Suggests Invisible Depression, Bankrupting Ireland Seeks Bailout / Economics / Inflation
By: Nadeem_Walayat
The Bank of England released its latest quarterly inflation report that shows that after a near year of temporary CPI Inflation mantra at above 3%, Mervyn King, the Bank Governor now expects CPI to spike to 3.5% during 2011 before falling back to below its 2% target and therefore implying that the real threat that the press and population should concern themselves with is DEFLATION.
Monday, November 15, 2010
Fed Inflationary Money Printing Propels Stocks 'Stealth' Bull Market to New High / News_Letter / Inflation
By: NewsLetter
The Market Oracle NewsletterNov 8th, 2010 Issue #59 Vol. 4
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Tuesday, November 09, 2010
Fed Pushes U.S. Economy into an Inflationary Death Spiral / Economics / Inflation
By: Michael_Pento
It seems the Fed has given up on the idea that the country can build a viable and stable economy through the conventional means. Instead, our central bank has resorted to once again growing GDP and increasing employment by the creation of asset bubbles. This is a dangerous game that no one, least of all the Fed, knows how to play.
Monday, November 08, 2010
How the Government Lies About Low CPI Inflation, Krugman Deflation Propaganda / Economics / Inflation
By: Submissions
Robert Wenzel writes: With commodity prices soaring, Paul Krugman is in a trap with his deflation call, so he has decided to turn to Richard "I am not a crook" Nixon to explain why price inflation is really not happening.
Krugman tells us to forget about the prices that are going up. They are too volatile, he tells us. He says that what we should focus on are tricky sticky price indexes, specifically, core CPI.
Monday, November 08, 2010
Fed Debases the Imperial Dollar, Inflation, Stagnation and Higher Interest Rates Ahead / Economics / Inflation
By: Prof_Rodrigue_Trembl
"Under a paper money system, a determined government can always generate higher spending and hence positive inflation."Ben Bernanke, future Fed Chairman (in 2002)
“My thesis here is that cooperation between the monetary and fiscal authorities in Japan could help solve the problems that each policymaker faces on its own. Consider for example a tax cut for households and businesses that is explicitly coupled with incremental BOJ purchases of government debt – so that the tax cut is in effect financed by money creation. Moreover, assume that the Bank of Japan has made a commitment, by announcing a price-level target, to reflate the economy, so that much or all of the increase in the money stock is viewed as permanent.”Ben Bernanke, future Fed Chairman (in 2002)
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Friday, November 05, 2010
Cotton Inflation Illustrates Savers and Merchants Force to Price Resources in Ever Depreciation Currencies / Commodities / Inflation
By: Adrian_Ash
Savers and merchants worldwide are being forced to price scarce resources in ever-depreciating money...
BLAME speculators, poor weather, global demand, or the Federal Reserve as you choose. Either way, sugar's up, wheat's up, and cotton's new record highs are starting to hurt Chinese textile makers.
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Friday, November 05, 2010
From QE2 To Economic Titanic, The Global Asset Inflation Surge / Economics / Inflation
By: Andrew_McKillop
Ben Bernanke has cranked the U.S. Fed's printing presses one more time, with a new injection of
US$ 600 billion. Market operators have responded with the only tune they know: bid up all hard
asset real resource prices in the Commodities space and, for a while, also talk up their paper
cousins in the Equities space, while the US dollar wilts by the hour. Not so far forward, however,
this creation of virtual value will hit the iceberg of runaway asset inflation, then vast deflation, as
QE2 turns to Titanic.
Thursday, November 04, 2010
John Locke vs. the Mercantilists and Inflationists / Economics / Inflation
By: Murray_N_Rothbard
From the early decades of the 17th century, English mercantilists were bitter at the superior prosperity and economic growth enjoyed by the Dutch. Observing that the rate of interest was lower in Holland than in England, they chose to leap to the causal analysis that the cause of the superior Dutch prosperity was Holland's low rate of interest, and that therefore it was the task of the English government to force the maximum rate of interest down until the interest rate was lower than in Holland.
Friday, October 29, 2010
Loss of Dollar Purchasing Power, The True Fed Inflation Targeting Bullseye / Economics / Inflation
By: Richard_Daughty
When it comes time to put the current crop of economic blowhards and lunatics on trial for the disaster their insanely-bad advice caused, this quote from Frederic Mishkin, former Fed governor and who is directly responsible for the mess we are in, may come in handy.
Tuesday, October 26, 2010
Inflation in the Real World / Economics / Inflation
By: Casey_Research
Jake Weber, Editor, The Casey Report writes: As is often the case, there is a big difference between what the government statistics are reporting and what’s going on in the real world. According to the most recent inflation reading published by the Bureau of Labor Statistics (BLS), consumer prices grew at an annual rate of just 1.1% in August.
Read full article... Read full article...
Tuesday, October 26, 2010
Should the Fed Be Concerned about Low Price Inflation? / Economics / Inflation
By: Frank_Shostak
In its September 21 meeting, the Federal Reserve Open Market Committee expressed concern that the rate of inflation is far too low. According to the minutes some members of the FOMC have said,
Tuesday, October 26, 2010
More U.S. Inflation Fears / Economics / Inflation
By: Dr_Ron_Paul
Inflation fears are heating up this week as Fed Chairman Ben Bernanke gave a speech in Boston on Friday, causing further frantic flight into gold by those fearful of the coming “quantitative easing” the Fed is set to deliver in November. Others who view gold as a short-term investment engaged in immediate profit-taking after Bernanke's speech.
Read full article... Read full article...
Friday, October 22, 2010
The U.S. Dollar is Doomed, High Inflation then Hyper-Inflation / Economics / Inflation
By: Puru_Saxena
Austerity be damned, at this rate Mr. Bernanke will go down in the history books as one of the greatest money creators ever to have walked this planet!
Never mind sky-high deficits and a crushing debt overhang, at its most recent FOMC meeting, the Federal Reserve all but guaranteed another round of quantitative easing.
Read full article... Read full article...
Monday, October 18, 2010
Financial Markets Expect QE2 to Result in Higher Inflation / Economics / Inflation
By: Asha_Bangalore
Inflation expectations, measured as the difference between nominal 10-year Treasury note yield and yield on the 10-year inflation protected security, has moved from a low of 1.49% on August 24, just prior to the August 27 Bernanke speech, to 2.09% as of October 15. The upward trend of inflation expectations is a vote of confidence about the success of QE2. Actual inflation, based on personal consumption expenditure price index, the Fed's preferred measure, moved up 1.47% in August on a year-to-year basis (see chart 2).
Saturday, October 16, 2010
Reflation Trade Is Overdone, No Pickup in Inflation / Economics / Inflation
By: Bryan_Rich
In recent weeks, the dollar has been the centerpiece of speculation surrounding the outlook for global economies, rising protectionist threats and the resurgence of global asset prices. And it all derives from Fed policy.
Bernanke’s speech yesterday and the latest statement by the FOMC clearly confirm that the Fed is DEFINITELY prepared to roll out another wave of its “quantitative easing” program — expanding the money supply with the hope of stimulating demand … igniting inflationary pressures … and ultimately creating incentives for employers to hire and invest, and for consumers to borrow and spend.
Read full article... Read full article...
Friday, October 15, 2010
How to Hedge Yourself from the Coming Fed Inflation Disaster / Stock-Markets / Inflation
By: DailyWealth
Porter Stansberry & Braden Copeland write: Most investors know the Federal Reserve's "easy money" policy is creating an enormous amount of new credit and new money.
And most people know this policy has created an explosion in the prices of gold and silver.
Friday, October 15, 2010
The Fed Has Gone Insane, So I'll Just Pick Up Some More Gold and Silver / Interest-Rates / Inflation
By: Richard_Daughty
My stomach was hurting, so I decided to take a little time off and soothe the old midsection with a few medicinal brews and a dose of pizza. The reason that my stomach hurt was because I had just read the stupidest economic essay, which was, unbelievably, penned by another lackluster university professor, and surprisingly printed by The Financial Times newspaper.
Wednesday, October 13, 2010
Bank of England Prepares to Print Money Despite High Inflation at CPI 3.1% / Economics / Inflation
By: Nadeem_Walayat
UK Inflation for September 2010 was unchanged at CPI 3.1%, remaining stubbornly above the Bank of England's upper limit of 3% and target of 2%, despite virtually 10 months of worthless mantra from the BoE Governor that high inflation was ALWAYS just temporary and imminently expected to fall back to below the 2% target. The more recognised RPI (real inflation) measure dipped marginally from 4.7% from 4.6% and which compares against average pay rises of 2% which illustrates the squeeze that ordinary people are experiencing especially as taxes rise and Government spending is cut.
Tuesday, October 12, 2010
What the Texas State Fair Taught Me About Inflation / Commodities / Inflation
By: Jared_Levy
I spent my Saturday wandering around the good old Texas State Fair. I walked though the livestock area and stables full of animals of all kinds from all over Texas, and right before exiting I turned to my right to see "Millie" the Brown Swiss cow staring right at me.
My first thought, while staring back into the eyes of this cow, was inflation. Most don't typically associate cows with inflation, I know. But here's what that Brown Swiss cow and inflation have to do with one another...
Read full article... Read full article...
Tuesday, October 12, 2010
Will 2011 be Another Stagnant Year for Cost of Living Adjusted Social Security Checks? / Politics / Inflation
By: Nilus_Mattive
In just a few days, the Social Security Administration is going to let retirees know how much their checks will go up next year. Or, in this case, how their checks aren’t going to go up at all.
If you were collecting this year, that’s going to sound painfully familiar because you heard the same thing last October!
Read full article... Read full article...
Monday, October 11, 2010
Fed Mandates Inflation Creation / Economics / Inflation
By: Peter_Schiff
Much of the content of the latest Fed statement, released on September 21, echoes the central bank's previous post-credit crunch pronouncements: there is still too much slack in the economy, interest rates are still going to be near-zero for an "extended period," and the Fed will continue to use payments from its Treasury purchases to buy yet more Treasuries.
Wednesday, October 06, 2010
Bernanke To Light the Fuse on Monetary Inflation Bomb / Economics / Inflation
By: Gary_North
It is always a good idea to pay attention to new words or phrases that seem to have no connection with any previous word or phrase, and which are not self-evident. Such a phrase these days is "quantitative easing." When we hear a phrase like this, we should think through the implications of what this phrase probably means.
Monday, October 04, 2010
Consumer Price Index (CPI), A Standard of Living Problem / Economics / Inflation
By: Chris_Riley
The CPI is a cost of living indicator, calculated with a basket of goods that varies over time. As it is attempting to measure price changes in a typical consumption basket, it does not compare price changes across a like-for-like basket of goods over time. This has caused large under measurement of the true rate of price inflation when living standards have been falling and over measurement of price inflation when living standards have been rising. This is a major problem, as we need to measure price changes whilst holding the standard of living constant i.e. across a fixed basket of goods. But that would invalidate the CPI as a measure of change in the cost of living.
Friday, October 01, 2010
Perpetual Deflation Causes Inflation / Economics / Inflation
By: Shelby_H_Moore
It does not amaze me that most people have not studied enough to have a very good understanding of the current macro economic environment.
Read full article... Read full article...
Tuesday, September 21, 2010
Inflationary Understatement / Economics / Inflation
By: Richard_Daughty
The Market Oracle newsletter jumps into the inflation-deflation debate, and says, "Debt deleveraging deflation completely ignores the fact that we are NOT living in the 1930's, but in a globalised world economy that is seeing the convergence of real GDPs where the developing world is eating up the [world's] resources at a faster pace then the west is cutting back on consumption."
Tuesday, September 14, 2010
UK CPI Inflation Stuck at 3.1% Against Bank of England's Forecast for 1.6% / Economics / Inflation
By: Nadeem_Walayat
UK inflation for August 2010 was unchanged at CPI 3.1%, remaining stubbornly above the Bank of England's upper limit of 3% and target of 2%, despite virtually 9 months of mantra from the Governor, Mervyn King that high inflation was ALWAYS just temporary and imminently expected to fall to below the 2% target. The more recognised RPI (real inflation) measure dipped marginally from 4.8% to 4.7% and which compares against average pay rises of 2% which illustrates the squeeze that ordinary people are experiencing especially as taxes rise and state services are cut. The academic economists that populate the mainstream press were again caught off guard as expectations were for CPI to fall to 2.8%, just as they have been caught off guard by high inflation EVERY month for the whole of 2010.
Sunday, September 12, 2010
Inflation in China Escalates - Miracle Expansion or Bubble to Burst? / Economics / Inflation
By: Mike_Shedlock
The New York Times reports Inflation in China Is Rising at a Fast Pace
Wednesday, September 01, 2010
Quantitative Easing, Money Velocity Inflationary Armageddon / Economics / Inflation
By: DeepCaster_LLC
“The crucial passage comes in Chapter 17 entitled "Velocity". Each big inflation -- whether the early 1920s in Germany, or the Korean and Vietnam wars in the US -- starts with a passive expansion of the quantity of money. This sits inert for a surprisingly long time. Asset prices may go up, but latent price inflation is disguised. The effect is much like lighter fuel on a camp fire before the match is struck.
Wednesday, September 01, 2010
Inflation, Rounding Up the Culprits of Rising Prices / Economics / Inflation
By: Richard_Daughty
From Bloomberg.com we get the bad news that "Bank of England Governor Mervyn King said inflation is likely to exceed the UK government's upper 3% limit in coming months as higher sales taxes drive gains in consumer prices," which "rose 3.1% in July from a year earlier after climbing 3.2% in June."
Sunday, August 29, 2010
Deflation Delusion Continues as Economies Trend Towards High Inflation / News_Letter / Inflation
By: NewsLetter
The Market Oracle NewsletterAugust 26th, 2010 Issue #49 Vol. 4
Read full article... Read full article...
Thursday, August 26, 2010
Deflation Delusion Continues as Economies Trend Towards High Inflation / Economics / Inflation
By: Nadeem_Walayat
Delusional deflationists right from the Bank of England MPC, through to the mainstream press for well over a year have pushed the mantra of ongoing debt deleveraging deflation everywhere, everywhere that is than appears in where it counts i.e. the actual INFLATION indices, where inflation is on the rise right across the world as illustrated in the UK by the persistent failure of the Bank of England to control UK inflation that remains above the banks CPI 3% upper limit. Even Greece that really is in an depression is experiencing inflation at above 3%, whilst the US CPI continues to inflate at a more modest 1.2% as summarised below for key world economies.
Wednesday, August 25, 2010
Inflation Follows the Economic Stimulus Boom / Economics / Inflation
By: Richard_Daughty
Peter Schiff of Euro Pacific Capital notes that the Federal Reserve, and the idiots like Paul Krugman who genuflect at the altar of Keynes, is not done with destroying the economy, but that “Bernanke and his supporters have said that their stimulus will be withdrawn as soon as the recovery takes hold in earnest.” Hahaha!
Read full article... Read full article...
Thursday, August 19, 2010
Tea, Tramadol and Today's Great Depression / Economics / Inflation
By: Adrian_Ash
"Even at home there is generally a cup of tea going – a 'nice cup of tea' – and Father, who has been out of work since 1929, is temporarily happy because he has a sure tip for the Cesarewitch..."
- George Orwell, The Road to Wigan Pier (London, 1936)
Tuesday, August 17, 2010
UK Inflation CPI 3.1%, RPI 4.8% for July, Bank of England Forecast Was for CPI 1.7% / Economics / Inflation
By: Nadeem_Walayat
UK inflation for July 2010 dipped marginally from CPI 3.2% to 3.1%, remaining stubbornly above the Bank of England's upper limit of 3% and target of 2%, despite virtually 8 months of mantra from the Governor, Mervyn King that high inflation was just temporary and imminently expected to fall to below the 2% target. The more recognised RPI measure fell from 5% to 4.8% and which compares against average pay rises of 2% which illustrates the squeeze that ordinary people are on especially as taxes rise and state services are cut. The BoE governor wrote yet another full of excuses letter to the Chancellor, George Osbourne as to why the Bank of England is failing in its primary objective of controlling inflation.
Friday, August 13, 2010
The Real Reason for Bank of England's Worthless CPI Inflation Forecasts / Economics / Inflation
By: Nadeem_Walayat
The Bank of England released their latest quarterly inflation report this week that again sought to revise the forecast for UK inflation to converge towards 2% in 2 years time. However one major change accompanying the forecast was that the mantra of UK inflation being above the 2% target and the 3% upper limit as only temporary has now been dropped, this after repeatedly claiming month in month out for the past 7 months that Inflation would magically fall that the academic economists and mainstream press had swallowed up until quite recently.
Thursday, July 29, 2010
Price Stability Not a Fed Priority / Economics / Inflation
By: Richard_Daughty
I knew the instant that I read the article’s title, “Fed Nominees Seek Economic Boost” in The Wall Street Journal, that I was probably going to be outraged and end up screaming a fearful and angry Mogambo Howl Of Anger (MHOA).
It was, alas, a feeling of doom that soon gave way to stark fear when I saw that the accompanying photo was captioned “Fed nominees – Janet Yellen, Peter Diamond and Sarah Bloom Raskin – at a Senate hearing Thursday.”
Read full article... Read full article...
Monday, July 26, 2010
Inflation, The Coming Rice in Prices / Economics / Inflation
By: Howard_Katz
Last week I argued that the theory of a coming decline in prices just around the corner was a balloon full of hot air, and like all such balloons it was bound to sail into the atmosphere. So far from this “deflation” theory being true, it is a deliberate falsehood and in fact is a very good indicator that the exact opposite will happen.
Saturday, July 17, 2010
ShadowStats U.S. CPI Inflation Running at 4.3%, Gold $2,382, Silver $139 / Economics / Inflation
By: Jesse
ShadowStats U.S. CPI Inflation Running at 4.3%, Gold $2,382, Silver $139
Something Weimar this way comes?
There is almost no doubt in my mind that we will see these prices for gold and silver. I am just not sure exactly how we will get there, and when. But I expect the unexpected, or at least that which is not expected by the many.
Friday, July 16, 2010
U.S. CPI Negative 3rd Consecutive Month, Consumers Have a Selective Memory / Economics / Inflation
By: Mike_Shedlock
As expected, as least as I expected, the Consumer Price Index for June shows the seasonally adjusted CPI was Negative 3rd Consecutive Month.
Wednesday, July 14, 2010
Money Disillusion, 8 Ugly Facts About U.K. Inflation / Economics / Inflation
By: Adrian_Ash
Behold the sad case of the poor British worker and saver...
PEOPLE BUY GOLD when they fear inflation ahead. But they also buy gold when inflation arrives and starts eating into their savings – which is just what it's done during the last decade.
Read full article... Read full article...
Tuesday, July 13, 2010
Inflation, The Runaway Train / Economics / Inflation
By: Kieran_Osborne
Inflationary risks have seemingly fallen out of the mindset of many investors recently, with the European debt crisis causing many to reevaluate their outlook for global economic growth in concert with record low headline CPI numbers being released. Despite this, gold, traditionally a hedge against inflation, continues to move up in price. Is this dynamic inconsistent? We don’t think so. Of course, some of gold’s price movement may reflect its safety aspect, given renewed concerns over the long-term health of the economy, but in our opinion, inflationary concerns are very much valid and should be front and center of any investment strategy going forward.
Tuesday, July 13, 2010
UK Inflation Falls to CPI 3.2%, Precisely inline with 2010 Forecast / Economics / Inflation
By: Nadeem_Walayat
UK inflation for June 2010 registered a small drop from 3.4% to 3.2%, though remaining stubbornly above the Bank of England's upper limit of 3%, thus the BoE Governor, Mervyn King will write yet another letter to repeat that the high rate of inflation is just "temporary", though when does "temporary" high inflation stop being temporary? 6 months? a year? 2 years? as the country sleep walks into stagflation with all of the consequences for wage earners and savers.
Tuesday, July 06, 2010
Inflation Isn’t Dead, Just Sleeping, Protect Your Wealth With TIPS / Interest-Rates / Inflation
By: Money_Morning
Larry D. Spears writes: Investors are always on the lookout for hot tips. The best tips highlight investments that pack a big potential profit punch, but that haven't yet started their move.
That's just what we have for you here.
Read full article... Read full article...
Wednesday, June 30, 2010
Fed Credit, Inflation and the Idiots in the Middle / Economics / Inflation
By: Richard_Daughty
A whole series of alarms occurred after I got the news, although I lost the source, that "food stamp usage just soared to a new record high" of 40.2 million persons.
This number is alarming in itself because it means that the economy is so bad that more and more hungry people cannot afford to even feed themselves, sort of like teenagers, but with hopefully better manners and dietary choices.
Read full article... Read full article...
Sunday, June 20, 2010
The Inflation Mega-Trend Continues With UK CPI 3.4%, RPI 5.1% / News_Letter / Inflation
By: NewsLetter
The Market Oracle NewsletterJune 16th, 2010 Issue #36 Vol. 4
Read full article... Read full article...
Wednesday, June 16, 2010
The Inflation Mega-Trend Continues With UK CPI 3.4%, RPI 5.1% / Economics / Inflation
By: Nadeem_Walayat
Another month and another release of UK inflation data at far above the Bank of England's target of 2% and above the upper limit of the Banks 1% to 3% range by reporting CPI of +3.4% for May. Thus the BoE Governor, Mervyn King will write another letter to repeat that the high rate of inflation is just "temporary", though when does "temporary" high inflation stop being temporary? 6 months? a year? 2 years? as the country sleep walks into stagflation with all of the consequences for wage earners and savers.
Tuesday, June 15, 2010
High UK Inflation Continues to Punish Savers With Negtive Real Interest Rates / Economics / Inflation
By: MoneyFacts
Inflation figures released today show that the Consumer Price Index (CPI) has fallen marginally to 3.40%, still way above the Government’s 2% target.
But a possible VAT increase in next week’s emergency Budget could stunt any longer term reductions.
Read full article... Read full article...
Tuesday, June 15, 2010
Inflation Corroded Copper Coins / Economics / Inflation
By: LewRockwell
Richard Daughty writes: Junior Mogambo Ranger (JMR) Phil S. sent an article from the Globe and Mail where I learned that inflation in Canada has been so persistently corrosive over the years that, like in America, "it now costs the Royal Canadian Mint more than a penny to make a penny, and because of penny 'hoarding' by Canadians, the mint has to keep making more." Hahaha! "Hoarding"? Hahahaha!
Tuesday, June 15, 2010
Government Quest to Buy Inflation, Print Baby Print / Economics / Inflation
By: John_Mauldin
This week I thought I would give you an Outside the Box with a more European flavor, as I am in Tuscany at the moment and on to Paris later this week and then back here for a working weekend with partners. Life is tough. :-)
Dylan Grice of Societe Generale (based in London) is fast becoming one of my favorite writers. This thought-provoking piece makes us meditate on whether central banks will print money in response to the fiscal crisis in the developed world countries. I am not certain that all central banks will print with abandon, BUT we need to think about what happens if they do.
Read full article... Read full article...
Sunday, June 13, 2010
Deflation? Try a Tale of Two Inflations / Economics / Inflation
By: Dian_L_Chu
The crisis in Europe is causing concerns about deflation in the U.S. and other developed economies after weeks of financial-market turmoil. The fears are most pronounced in Europe, where a combination of spending cuts and tax increases could weigh on economic growth and feed into deflation.
Financial markets are reflecting a diverging expectation. Gold prices have been soaring—a potential indicator of inflation fears—while many other inflation indicators are going the other way.
Read full article... Read full article...
Friday, June 04, 2010
Credit Expansion vs. Simple Inflation / Economics / Inflation
By: MISES
In dealing with the consequences of credit expansion we assumed that the total amount of additional fiduciary media enters the market system via the loan market as advances to business. All that has been predicated with regard to the effects of credit expansion refers to this condition.
Read full article... Read full article...
Wednesday, May 26, 2010
U.S. Inflation Prospects / Economics / Inflation
By: Hans_Wagner
Inflation in the United States is extremely low with the GDP deflator coming in at 0.4 percent and the Core Consumer Price Index measuring 1.1 percent year over year. For April 2010, the last month reported, the CPI declined 0.1 percent.
Wednesday, May 19, 2010
George Osbourne's Full Reply to Mervyn King's UK Inflation Letter / Economics / Inflation
By: Nadeem_Walayat
The following is the full text of George Osbourne's letter to Mervyn King in response to his Inflation excuses letter on the failure of the Bank of England to target CPI inflation at 2% and keep it below the 3% limit in yesterdays released data which saw UK inflation rise from 3.4% to 3.7% with the more publically recognised RPI inflation measure literally soaring to a 19 year high of 5.3% from 4.4% as detailed in yesterdays analysis (18 May 2010 - UK Inflation Hits New High of CPI 3.7%, RPI 5.3%).
Wednesday, May 19, 2010
Bank of England Governor Mervyn King's UK Inflation Letter Full Text / Economics / Inflation
By: Nadeem_Walayat
The following is the full text of Mervyn Kings Inflation excuses letter written to the new Chancellor, George Osbourne in response to the failure of the Bank of England to target CPI inflation at 2% and keep it below 3%, as a consequence of which UK inflation rose from 3.4% to 3.7% with the more publically recognised RPI inflation measure literally soaring to a 19 year high of 5.3% from 4.4% as detailed in yesterdays analysis (18 May 2010 - UK Inflation Hits New High of CPI 3.7%, RPI 5.3%)
Tuesday, May 18, 2010
Inflation Destroys Savings / Economics / Inflation
By: MISES
Everything that is done by a government against the purchasing power of the monetary unit is, under present conditions, done against the middle classes and the working classes of the population. Only these people don't know it. And this is the tragedy. The tragedy is that the unions and all these people are supporting a policy that makes all their savings valueless. And this is the great danger of the whole situation.
Tuesday, May 18, 2010
UK Inflation Hits New High of CPI 3.7%, RPI 5.3%, Mervyn King Writes Another Excuses Letter / Economics / Inflation
By: Nadeem_Walayat
UK Inflation has yet again hit a new high of CPI 3.7% up from last months inflation peak of 3.4%, with RPI rocketing even higher to an eye watering 5.3%, a level not seen since 1991. The academic economists were again taken by surprise. The Bank of England's failure in its primary duty of targeting inflation has prompted the Governor Mervyn King to write another letter to this time the new Chancellor George Osbourne that will again state for the fifth time this year that the rise in inflation above 3% was temporary and not to worry, it should come down, eventually (fingers crossed).
Wednesday, May 12, 2010
Inflation Is A Positive Development for the Astute Investor / Stock-Markets / Inflation
By: Sol_Palha
"When you see a worthy person, endeavor to emulate him. When you see an unworthy person, then examine your inner self." ~ Confucius,BC 551-479, Chinese Ethical Teacher, Philosopher
We all pretty much have felt the effects of inflation in one form or another. However, economists and the central bankers choose to define inflation as an increase in price of goods. This is a very clever way to actually hide what they are doing. If they are able to inflate the money supply but keep the cost of certain goods suppressed, mainly those that the average Joe uses everyday, they have more or less won; the simple reason being that the average person has come to view inflation in terms of rising prices.
Read full article... Read full article...
Wednesday, May 05, 2010
Greece Economic Depression Resulting in INFLATION NOT DEFLATION Surge / Economics / Inflation
By: Nadeem_Walayat
Greece, Europe's Achilles Heel continues to
implode under its budget deficit and total debt burden sending a series of strengthening shock waves across Europe's credit and financial markets. Whilst many western economies bounce back from the Great Recession of 2008-2009, Greece's economic depression continues as the economy is set to contract by further 4% during 2010 which is much worse than the 2.5% contraction of 2009 and looks set continue contracting for several more years. Greek Unemployment is soaring to 12% this year up from 9.5% in 2009 and is set to continue higher to 13.5% in 2011.
Wednesday, April 28, 2010
The “V” Shaped Recovery in Inflation / Economics / Inflation
By: Michael_Pento
A viable “V” shaped recovery in the economy and markets has now become the accepted view. My view, however, is that the economic recovery will be ephemeral in nature, whereas the real and lasting recovery will be unfortunately found in the rate of inflation. While nearly everyone on Wall Street remains unconcerned about inflation, the cornerstone for increasing prices has already been laid and the foundation is nearing completion.
Monday, April 26, 2010
Washington Detached From Reality Producing Phony Inflation Statistics / Economics / Inflation
By: Larry_Edelson
Our leaders in Washington are so detached from reality, I am thoroughly convinced that they are smoking something.
And I’m not talking about the insane amounts of spending that’s going on in our capital, or even about the patently unpayable debts and promises they’re making to all of us and our foreign creditors. Although I think these things, too, result from whatever drugs they’re on inside the beltway.
Read full article... Read full article...
Sunday, April 25, 2010
Inflation or Deflation, What to Do and When to Act / Economics / Inflation
By: Gary_North
Have you ever seen a documentary where the herd of zebras is at the river's edge? The lions are behind them. The crocodiles are in front of them. What's a wise zebra to do?
Most of them wait. Then, without visible warning, they either run like mad or else plunge into the river.
Read full article... Read full article...
Thursday, April 22, 2010
Teaching Inflation / Economics / Inflation
By: MISES
Hunt Tooley writes: I had a great teaching experience early last school year. I taught the history of inflation, and I have never timed a course better. I have taught in colleges and universities since 1985, and I have often thought about doing a course on the history of inflation. But this time, current events pushed me to go ahead.
Tuesday, April 20, 2010
UK Inflation Soars CPI 3.4%, RPI 4.4%, Bank of England Forecast Wrong as Usual / Economics / Inflation
By: Nadeem_Walayat
UK Inflation CPI surged higher for March from 3% to 3.4% taking the academic economists that populate the mainstream press by surprise against consensus views of inflation rising to 3.1%.
The Bank of England's forecasts for inflation to fall have yet again been shown to be an abysmal failure when it comes to inflation forecasting and targeting where the mantra of UK inflation being at 2% in 2 years time only having been achieved approx 4% of the time, i.e. there is a 96% probability that inflation in 2 years time will NOT be at 2%.
Read full article... Read full article...
Saturday, April 17, 2010
Trying to Beat the Rate of Inflation With Your Savings? / Interest-Rates / Inflation
By: Adrian_Ash
What the New York Times can't even see in today's record-low bank interest rates...
LESTER BANGS getting loaded on speed, brandy and casual violence...throwing empty bottles down onto the street and assaulting a good friend's long-time partner...before reviewing Lou Reed's Metal Machine Music...
Read full article... Read full article...
Monday, April 12, 2010
Why UK Inflation Will Increase in 2010 / Economics / Inflation
By: John_Cardy
The 'expert' economists tell us that Inflation is not a risk to the UK. They say it has risen but will decline again fairly quickly and everything is under control. But it's not. Ask real people running real businesses and they will tell you there a host of reasons why inflation will increase:Read full article... Read full article...
Monday, April 12, 2010
Bernanke the Great Inflator Says Welcome to Zimbabwe / Economics / Inflation
By: Douglas_French
If you follow economic affairs at all, you know who Ben Bernanke is. He's the chairman of the Federal Reserve. He was Time's 2009 "Man of the Year." CBS News said he may be the most important Fed chairman in history when Scott Pelley interviewed him for the highly watched 60 Minutes program.
Tuesday, April 06, 2010
Both Stock and Gold Markets Have Correctly Assessed the Keynesian Policies of Western Economies / Economics / Inflation
By: Ned_W_Schmidt
Did some of you feel safer this past weekend? Your wealth was certainly safer. For three days much of the Western world was closed for a religious holiday. Even Keynesians take the holiday. As the Keynesians were away from their government offices, their relentless attack on wealth was silent. As hard as they have been working to destroy wealth in the past year, a rest was probably needed.
Monday, March 29, 2010
Greenspan Signals warnings for Bubble-maniacs, the Break-out of Inflation Has Already Begun / Economics / Inflation
By: Gary_Dorsch
“I guess, I should warn you. If I turn out to be particularly clear, you’ve probably mis-understood what I’ve said,” former Federal Reserve chief Alan Greenspan was fond of saying, when he controlled the Fed’s money spigots. For many Fed watchers, it was a great relief when “Easy” Al finally retired from the Fed, since there is nothing more vexing - than correctly interpreting Green-speak.
Tuesday, March 23, 2010
UK CPI Inflation Falls to 3%, RPI Remains at 3.7% / Economics / Inflation
By: Nadeem_Walayat
UK CPI inflation fell back unexpectedly for academic economists to 3% from 3.5% the month before, the Bank of England's forecast for UK inflation by the end of 2010 is 1% not 3% which continues to illustrate the Bank of England is failing in its primary role of accurately targeting an inflation rate of 2%.
Thursday, March 18, 2010
U.S. Inflation, Yellen Slated for Promotion at the Dole of Doves / Economics / Inflation
By: Michael_Pento
President Obama has nominated Janet Yellen to replace Donald Kohn as the Vice-Chairman of the Federal Reserve. Ms. Yellen served as a former assistant professor at Harvard during Bernanke’s tenure as an undergraduate there and currently serves as the President of the Federal Reserve Bank of San Francisco.
Read full article... Read full article...
Tuesday, March 16, 2010
UK Petrol Prices to Hit Record High As Stealth Inflation Rages / Personal_Finance / Inflation
By: Nadeem_Walayat
UK Petrol prices are set to hit new record highs over the coming weeks despite Crude Oil at near half its mid 2008 peak of $150, Why ?
Sunday, March 14, 2010
Inflation Lessons Learned and Lessons Forgotten / Economics / Inflation
By: Jim_Richter
A Lesson From Keynes - John Maynard Keynes once said that,"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
Thursday, March 11, 2010
America’s Real Estate Burden Ensures Inflation / Economics / Inflation
By: Dr_Jeff_Lewis
The Obama administration and the US Congress have together made inflation the real monetary policy of the United States. While pundits and talking heads focus on the bailouts and loan packages, they're missing the bigger picture. It isn't what the US government outright purchased (stock, debt, and real estate paper), but it's what the US government is guaranteeing that will make all the difference.
Read full article... Read full article...
Sunday, March 07, 2010
The FED Won't Deflate or Even Seriously Disinflate / Economics / Inflation
By: Michael_S_Rozeff
The FED, in my opinion, is a price taker in the security markets. While its control over the interest rate in the inter-bank market for reserves (Federal Funds) may be very large in the short run, it cannot and does not control interest rates in other markets, such as Treasury bills. These rates and yields are linked to world markets that are too large for the FED to control.
Saturday, March 06, 2010
The Inflationist View of History / Economics / Inflation
By: MISES
A very popular doctrine maintains that progressive lowering of the monetary unit's purchasing power played a decisive role in historical evolution. It is asserted that mankind would not have reached its present state of well-being if the supply of money had not increased to a greater extent than the demand for money. The resulting fall in purchasing power, it is said, was a necessary condition of economic progress. The intensification of the division of labor and the continuous growth of capital accumulation, which have centupled the productivity of labor, could ensue only in a world of progressive price rises.
Friday, March 05, 2010
An Economic Storm is Brewing / Economics / Inflation
By: John_Townsend
When the tech bubble burst in 2000, Greenspan tried to “fix” the problem by cutting rates and printing money. Fix the problem he did … well sort of! What Greenspan did was create two new bubbles in the credit and real estate markets to replace the tech bubble that had burst. Millions of jobs were created in these two industries. Much needed jobs to replace the ones lost as the tech boom came to an end.
Wednesday, March 03, 2010
IMF Recommends Doubling Inflation Targets! / Economics / Inflation
By: Claus_Vogt
I grew up in Germany, a country that went through hyperinflation twice during the 20th Century. Maybe that’s the reason I learned inflation is bad and inflationary policies are diabolic.
Inflationary periods are highly unjust. They undermine the ethics of hard work and thrift. They destroy solidarity, lead to widespread hardship and often to social unrest.
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Tuesday, February 23, 2010
Inflation Hiding In Plain Sight, The Key To Profits / Economics / Inflation
By: Bob_Clark
As an Account Manager and Trading Instructor, there is a theme I see that keeps recurring. I hear this from my clients and students over and over, "things are so bad how can I be safe buying". I hear "we are going to have hyper inflation" or "it is all going to collapse into a deflationary abyss. In other words, they lose their bearings in a sea of information. My answer is always the same, we must trust our algorithmic models. Markets will fluctuate, what you read or listen to is illusion. When one group has all the money, the rules of the game have changed. Read full article... Read full article...
Saturday, February 20, 2010
Goodbye Reflation We hardly Knew Ya; Core CPI Drops First Time Since 1982 / Economics / Inflation
By: Mike_Shedlock
Yesterday, inflationists were out in full force after the Producer Price Index (PPI) release.
Read full article... Read full article...
Thursday, February 18, 2010
Keynesian Economics, A Halfwit’s Guide to Monetary Inflation / Economics / Inflation
By: LewRockwell
Richard Daughty writes: Information Clearing House Newsletter had the quote, “Believe those who are seeking the truth; doubt those who find it” by Andre Gide, which is generally true about most things, except in the case of economics, because the only true economic theory has already been found, and it is the Austrian school of economics, also known as the Austrian Business Cycle Theory (ABCT), and I have nothing but contempt for anyone who says differently, especially since it can be found every day, for free, at mises.org, and so to believe anything else is just a matter of stupidity and/or willful ignorance.
Wednesday, February 17, 2010
Krugman Says Inflation Is The Answer / Economics / Inflation
By: Mike_Shedlock
Inquiring minds are considering The Case For Higher Inflation by Paul Krugman.
Tuesday, February 16, 2010
UK Inflation Smashes Through 3%, Hits 3.5%, Bank of England Says Don't Panic! / Economics / Inflation
By: Nadeem_Walayat
The inflation mega-trend continues to forcefully manifest itself in the continuing surge higher of UK Inflation as measured by the Consumer Price Index (CPI) which soared from 2.9% to 3.5% for January data. Inflation has virtually doubled in a little over 2 months rising from 1.9% for November data to now stand at 3.5%, the surge in inflation has caught the whole mainstream media and academic economists by surprise that barely 2 months ago were still contemplating deflation. The RPI continued its spike higher rising to 3.7% from 2.4% the month before, and the real UK inflation rate as measured by the Market Oracle rose from 2.7% to now stand at 4.3%.
Wednesday, February 03, 2010
Will the Inflationary Hurricane Blow Your Savings Away? / Economics / Inflation
By: Gary_North
Allan Meltzer wrote a very good essay for the Wall Street Journal on January 27. It dealt with the build-up in the Federal Reserve System's monetary base as a result of its purchases of government debt, especially Fannie Mae and Freddie Mac debt, in the fall of 2008. Its title and subhead tell the story:
Thursday, January 21, 2010
Deflationists Always Wrong, High Inflation Ahead / Economics / Inflation
By: Gary_North
Over the past month, I have written seven lengthy articles on the totally erroneous theory that consumer price deflation is inevitable, no matter what the U.S. government and the Federal Reserve System do. You can read them here.
I would like to believe that this will end the debate. It won't.
Read full article... Read full article...
Tuesday, January 19, 2010
U.S. CPI Inflation Forecast 2010 Targets a Break Above 3% / Economics / Inflation
By: Nadeem_Walayat
Whilst the United States has experienced real year on year price deflation during 2009 as illustrated by the comparative CPI indices below, however key elements of the in-depth analysis for UK CPI inflation of 27th December 09 can also be applied to U.S. inflation expectations that converge towards 2010 being a year of inflation for both countries with UK inflation to breaking above 3% early 2009 and staying above 3% for most of the year which was confirmed by today's UK Inflation data that showed CPI soar by 1% in one month to rise from 1.9% to 2.9% as the below graph illustrates.
Tuesday, January 19, 2010
UK Inflation Rockets to CPI 2.9%, Sparking Panic at the Bank of England / Economics / Inflation
By: Nadeem_Walayat
UK CPI Inflation bust through the 2% target, bust through the quickly revised academic economists consensus targets of 2.6% of just last night, onwards and upwards to 2.9%, registering a record rise of 1% and within touching distance of 3% a break of which would trigger the Bank of England Governor Mervyn King to write a letter to the Chancellor to explain why he is not competent at keeping inflation within the 1% to 3% target band, RPI's rise was even more spectacular by rising from just 0.3% to 2.4% in just one month. My earlier article explained the reasons behind today's anticipated surge (UK CPI Inflation Soars Above 2% Targeting a Break Above 3%) so I won't repeat here, instead leave the mainstream press to focus on this AFTER the event.
Monday, January 18, 2010
UK CPI Inflation Soars Above 2% Targeting a Break Above 3% / Economics / Inflation
By: Nadeem_Walayat
UK CPI inflation is expected to bust through 2% tomorrow (Tuesday 19th) towards a target of 2.6% which was set over 3 weeks ago in the in-depth analysis and UK inflation forecast for 2010, that forecast a rise in UK inflation to above 3% early 2010, spiking as high as 3.6% and staying above 3% for most of the year only dipping to 2.7% by the end of the year as illustrated by the below graph.
Monday, January 18, 2010
In the United States Majority Rules, the Inflation Consensus / Economics / Inflation
By: Viresh_Amin
Most people are oblivious for a correct justification for the perpetual rise in all that can be priced i.e., oil prices rising to ungodly digits. For Americans, oblivious would be an understatement, though some are waking up to meet reality face to face, but not enough. Over the longer term horizon the general consensus among the public is that the price of everything will continuously rise, and so my wage will rise with it. It’s practically hard wired into the uninformed American mind and time and time again they fall into a myth.
Read full article... Read full article...
Monday, January 18, 2010
Monetary Base Expansion to Ignite Inflation Not Deflation / Economics / Inflation
By: Gary_North
There are two fundamental principles that govern all economic systems: (1) supply and demand; (2) high bid wins. What distinguishes one economic system from another is this: (1) who is allowed to supply, and who is allowed to demand; (2) the currency unit in which the high bid wins.
Friday, January 15, 2010
Howard Ruff Preparing for Rough Times By Hedging Against Inflation / Economics / Inflation
By: The_Gold_Report
Howard Ruff, who has observed the markets, the economy and government through three serious recessions and witnessed the rise and fall of the dot-com and real estate bubbles, entered the world of precious metals when Robert Preston's How to Prepare for the Coming Crash caught his eye in the early '70s. Shortly thereafter, he founded The Ruff Times (a financial newsletter that has served some 600,000 subscribers over the years) and came out with his first book (a blockbuster that sold 2.6 million copies and made his name a household word).
Friday, January 15, 2010
Inflation 101 / Economics / Inflation
By: Puru_Saxena
We want all our readers to understand that inflation is a disaster for society and it only benefits the elite. In fact, we will go even further by stating that inflation is a hidden tax, an insidious crime against the public. It is the easiest way for any government to confiscate the savings of the public and for generations, wealth has been transferred in this manner.
Wednesday, January 13, 2010
What the Deflationists Are Missing / Economics / Inflation
By: David_Galland
An interesting article by Ambrose Evans-Pritchard came my way the other day. It’s worth a read, if for no other reason than that he paints an appropriately dark picture of the current state of the U.S. economy. You can read it here.
While I very much share Mr. Evans-Pritchard’s view that the global economy is far from out of the woods, our views diverge in that he sees devastating deflation speeding our way down the tunnel. Casey Research readers of any duration know that we see devastating inflation.
Read full article... Read full article...
Sunday, January 10, 2010
UK CPI Inflation Forecast 2010 / News_Letter / Inflation
By: NewsLetter
The Market Oracle NewsletterDecember 27th, 2009 Issue #95 Vol. 3
Read full article... Read full article...
Friday, January 08, 2010
Inflation Pressures Heating Up, Again! / Commodities / Inflation
By: Guy_Lerner
The composite indicator that measures the trends in gold, crude oil, and yields on the 10 year Treasury will end the week in the extreme zone, and this should be a headwind for equities. Inflation pressures, whether real or perceived, are heating up. See figure 1 a weekly chart of the S&P500 with the indicator in the lower panel.
Read full article... Read full article...
Monday, January 04, 2010
How Deflation Is Inflation / Economics / Inflation
By: Shelby_H_Moore
Let's squash the debate between deflationalists and hyper-inflationalists. Here follows the math that shows how we get the equivalent effect of price inflation (and skyrocketing gold price) when there is deflation on a debt money standard.
Monday, December 28, 2009
Astonishing Inflation Data from the BLS / Economics / Inflation
By: Larry_Edelson
With the new year rapidly approaching, not much is happening in the markets. So I’d like to take this time to show you some stats that simply amaze me.
Even more astonishing, the figures I’m about to review with you are most likely conservative, and err on the low side of the spectrum.
Read full article... Read full article...
Sunday, December 27, 2009
UK CPI Inflation Forecast 2010, Imminent and Sustained Spike Above 3% / Economics / Inflation
By: Nadeem_Walayat
The UK inflation forecast for 2010 is first of a three part series of in depth analysis as part of the inflation mega-trend, with UK interest rates and GDP growth forecast to follow in the coming week. The whole scenario and implications of will be published as an ebook that I will make available for FREE. Ensure you are subscribed to my always free newsletter to get the latest analysis in your email box and check my most recent analysis on the unfolding inflation mega-trend at http://www.walayatstreet.com.
Sunday, December 27, 2009
Yield Curve Predicts Inflation / Economics / Inflation
By: Andrew_Abraham
There is a record wide spread on the yield curve currently. A record breaking 287 points. For those of you who do not know what the yield curve is…it is the difference between the 2 year and 10 year notes. Usually when there is a difference like this it usually means rapid economic growth as well as Inflation. This time because governments all over the world have run the printing presses and inflation is more of a potential outcome.
Read full article... Read full article...
Friday, December 25, 2009
UK Producer Prices Inflation Analysis / Economics / Inflation
By: Nadeem_Walayat
This is the next in a series of analysis as part of my unfolding inflationary mega-trend scenario towards the formulation of an inflation forecast for 2010 and beyond. I aim to complete the whole scenario including interest rates, economy and implications of before the end of December which will be published as an ebook that I will make available for FREE. Ensure you are subscribed to my always free newsletter to get the latest analysis in your email box and check my most recent analysis on the probable inflation mega-trend at http://www.walayatstreet.com
Thursday, December 24, 2009
UK Inflation Analysis, M4 Money Supply Adjusted for the Velocity of Money / Economics / Inflation
By: Nadeem_Walayat
This is the next in a series of analysis as part of my unfolding inflationary mega-trend scenario towards the formulation of an inflation forecast for 2010 and beyond. I aim to complete the whole scenario including interest rates, economy and implications of before the end of December which will be published as an ebook that I will make available for FREE. Ensure you are subscribed to my always free newsletter to get the latest analysis in your email box and check my most recent analysis on the probable inflation mega-trend at http://www.walayatstreet.com
Tuesday, December 22, 2009
A Case for the Inflation Camp / Economics / Inflation
By: Robert_Murphy
One of the more awkward situations facing Austrian economists today is that we are divided on whether to expect price deflation or inflation. Although it's good that we publicly disagree with each other — rather than bury our disagreements to reassure the lay public that we know what we're talking about — it's nonetheless unsettling that our prognoses for the US dollar are so divergent.
Thursday, December 17, 2009
The Inflation Mega-trend and the Illusion of Price Deflation / News_Letter / Inflation
By: NewsLetter
The Market Oracle Newsletter December 16th, 2009 Issue #93 Vol. 3 Read full article... Read full article...
Wednesday, December 16, 2009
The Inflation Mega-trend and the Illusion of Price Deflation / Economics / Inflation
By: Nadeem_Walayat
This analysis seeks to get to the heart of the matter to answer the question - Have we experienced Deflation and IF we have are we still in Deflation Now ?
This is the next in a series of articles as part of my unfolding inflationary mega-trend scenario that is an important stepping stone towards the formulation of a inflation forecast for 2010 and beyond. I am to complete the whole scenario and implications of before the end of December which will be published as an ebook that I will make available for FREE. Ensure you are subscribed to my always free newsletter to get the latest analysis in your email box and check my most recent analysis on the probable inflation mega-trend at http://www.walayatstreet.com
Read full article... Read full article...
Tuesday, December 15, 2009
UK CPI Inflation Soars as RPI Deflation Comes to an Abrupt End / Economics / Inflation
By: Nadeem_Walayat
The Inflation mega-trend scenario that I have been writing on during the past month is starting to manifest itself as UK Inflation data for November illustrates showing the Governments preferred CPI inflation surging higher to 1.9% up from 1.5% and RPI reversing October Deflation of -0.8% to now stand at Inflation of +0.3%.
Tuesday, December 15, 2009
Further Misery for UK Savers as Inflation Erodes Value of Savings Pot / Economics / Inflation
By: MoneyFacts
Savings rates are still annoyingly low, with the average no notice rate currently at 0.81%, not far above bank base rate.
The recent published inflation figures shows that the real return after basic tax and inflation on an average no notice savings account is at a worrying minus 1.25 per cent, the lowest since May this year.
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Wednesday, December 09, 2009
Aristophanes on Inflation / Economics / Inflation
By: Clifford_F_Thies
It used to be that every economist worth his salt knew Gresham's Law (or, if he was Polish, Copernicus's Law): "bad money drives out good." Narrowly understood, this rule says that when the government requires people to accept different forms of money at an exchange rate fixed by law, the form of money that is overvalued (the "bad money") will circulate, while the form of money that is undervalued (the "good money") won't.
Tuesday, December 08, 2009
Email Exchange With The Cleveland Fed On U.S. Inflation Expectations / Economics / Inflation
By: Mike_Shedlock
A couple weeks ago I received an email from the Cleveland Fed on A New Approach to Gauging Inflation Expectations.
Wednesday, November 25, 2009
The Next Economic Crisis: Spiraling Inflation - Part 2 / Economics / Inflation
By: Nick_Barisheff
Read Part 1 “The Next Crisis: Spiralling Inflation”
“Under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”– Ben Bernanke
The investment world is a risky and confusing place right now. Part 1 of this article (The Next Crisis: Spiralling Inflation) detailed the reasons why the next stage in the financial crisis will almost certainly be spiralling inflation. This article (Part 2) provides a solution for investors who are looking for a way to shield their hard-earned wealth from the destruction of high and uncontrollable inflation.
Read full article... Read full article...
Sunday, November 22, 2009
Ask India About Inflation / Economics / Inflation
By: Andrew_Abraham
Let’s put things into perspective India has one of the largest populations in the world as well it is one of the strongest markets this year. The economy is booming. There are new constructions starts, corporate earnings have been going through the roof as well as the Rupee has gained in value against the US dollar. Sounds great… Right?
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Friday, November 20, 2009
Good Inflation / Economics / Inflation
By: Joseph_T_Salerno
Last week a student in my MBA-level intermediate-macro seminar raised a provocative question. We were discussing the various kinds of (price) deflation and which kinds, according to Austrians, are benign and accommodate consumer preferences, and which are malignant and conflict with consumer preferences.
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Wednesday, November 18, 2009
Deflationists Are WRONG, Prepare for the INFLATION Mega-Trend / Economics / Inflation
By: Nadeem_Walayat
The jist of the deflationists argument is that debt deleveraging MUST trigger huge consumer and asset price deflation. Whilst we have all witnessed huge asset price deflation and some consumer price deflation during 2008 and into 2009. However we have also witnessed unprecedented government and central bank actions of this year, which have ignited asset price inflation with more to come that is now starting to feed into consumer price inflation.
Tuesday, November 17, 2009
The Investment Game Plan, How to Combat Inflation / Economics / Inflation
By: Dr_Jeff_Lewis
Inflation is an easily understood phenomenon. Although it takes a myriad of think tanks to find the root of the problem, the issue is quite simple, and investors can easily prepare their portfolios against the ravages of inflation.
Tuesday, November 17, 2009
Three Reasons Why Inflation Will Not Be Stopped / Economics / Inflation
By: Dr_Jeff_Lewis
Inflationary practices are the primary driver of growth in the value of precious metals, and they are already in play to combat the credit crunch. Although the Federal Reserve is planning its exit strategy, there is little chance one will actually be enacted – which means that inflation will continue to bulldoze the value of the US dollar.
Monday, November 09, 2009
What Is Inflation and How Does One Measure It? / Economics / Inflation
By: Mike_Shedlock
To understand inflation, one must first understand what money is and how to measure it. Please read What is Money and How Does One Measure It? before attempting to understand what follows.
Unfortunately there is no general agreement as to the definition of inflation. Here are some of the widely used definitions as noted in Inflation: What the heck is it?
Friday, November 06, 2009
The Path To Runaway U.S. Inflation / Economics / Inflation
By: Ganesh_Rathnam
"I see green shoots," said Fed Chairman Ben Bernanke on 60 Minutes back in March, doing his best rendition of Haley Joel Osment from the movie The Sixth Sense. Since then, every poor economic headline in the lapdog media has been preceded with the word "unexpected," as if the clueless chairman's pronouncements were suddenly the Gospel, and the economy had indeed recovered.
Thursday, November 05, 2009
Treasury Inflation Protected Securities (TIPS), Are They For You? / Economics / Inflation
By: Michael_Pollaro
On November 4th, Bloomberg ran this piece: U.S. to Sell $81 Billion in Long-Term Debt Next Week
Same old same old, right? Another big treasury auction. Maybe it’s a bit more than that, this time.
Friday, October 30, 2009
Ready for inflation in finance, living costs and bone-headed stupidity...? / Economics / Inflation
By: Adrian_Ash
SINCE MONEY MAKES the world go round, more of it would set the earth spinning faster, right? Which would be a good thing, of course...
Thursday, October 29, 2009
Dangerous Inflationary Side Effects of G20 Ultra-Easy Money / Economics / Inflation
By: Gary_Dorsch
Operating under the elixir of ultra-low interest rates, and flush with trillions of fiat currency at their disposal, courtesy of the world’s top-20 central banks, hedge funds and banking Oligarchs are once again making risky and daring bets in commodities, emerging markets, junk bonds, and blue-chip stocks, defying gravity with trades that would have been un-thinkable just six-months ago.
Thursday, October 29, 2009
The Next Economic Crisis, Spiralling Inflation / Economics / Inflation
By: Nick_Barisheff
As the credit crisis ends, a bigger one is just beginning
“The US government has a technology, called a printing press… that allows it to produce as many US dollars as it wishes at essentially no cost.” – Ben Bernanke
The US economy contracted for four consecutive quarters since October 2008, something we have not seen since the Great Depression. A V-shaped recovery is simply not in the cards because the credit crisis has caused deep, systemic damage. Having said that, if the recession ends this year, it certainly won’t be because the global economy is healthy.
Read full article... Read full article...
Wednesday, October 28, 2009
Stealth Inflation / Economics / Inflation
By: John_Browne
Over the past two years, the federal government and the Federal Reserve have dispersed trillions of public dollars, run up enormous deficits, and kept interest rates at zero. In just about any economic textbook, this combination of policies would be described as the perfect recipe for inflation. Yet, with the exception of the usual increases in health care and education, prices by and large are not rising. Many have concluded that our economic leadership has simply outsmarted the textbooks.
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Friday, October 23, 2009
When Will Inflation Really Hit Us? / Economics / Inflation
By: Terry_Coxon
Most of us are gathered at the station, watching for the Inflation Express to come rumbling in. But we've been waiting for a while now. Just when should we expect the big locomotive to arrive and start pushing the prices of most things uphill?
We’d all like to know the exact date, of course, but no one can know for sure. Not even a careful reading of the Mayan calendar will help.
Read full article... Read full article...
Saturday, October 17, 2009
Inflation and Government Deficits, Milton Friedman's View / Economics / Inflation
By: Paul_L_Kasriel
Before getting started on this month's essay, I would like to say something about last month's chart show. I received a number of favorable comments about the different format. I have to admit that my ego was bruised a bit. I thought you liked my prosaic prose. My ego notwithstanding, I will try to give the customers what they want more often - just not every month. The reason for not providing a chart show every month is that not enough changes that frequently to warrant such. So, this month you are stuck with the prosaic prose. And because not that much has changed from last month save for stronger-than-previously expected consumer spending in the third quarter, I am going to discuss two issues that are getting a lot of ink of late rather than spending time discussing the updated forecast.
Saturday, October 10, 2009
Measuring CPI Inflation, Alice In Wonderland And The Bond Yield Paradox / Economics / Inflation
By: Andrew_Butter
This article is not about what inflation is, it's about how you measure one component, CPI (Consumer Price Index), there are other components; but that's the focus of this article.
Big picture to estimate CPI you work out a "basket" of goods and services that consumers buy which you think is representative of the structure of spending in an economy, and you do a survey, then you compare that with how much it would have cost to buy the same "basket" a year before.
Read full article... Read full article...
Wednesday, October 07, 2009
The Autumn 2009 Inflation Time Bomb / Economics / Inflation
By: Paul_Tustain
It's not only the energy markets that threaten the 'low inflation' data now encouraging bondholders to keep buying...
THE PUBLISHED INFLATION DATA are surprisingly unsophisticated in so far as they compare current prices with a snapshot a year earlier.
Read full article... Read full article...
Thursday, September 24, 2009
Inflation is Our Future, Gold About to Shine? / Economics / Inflation
By: Puru_Saxena
At present, there is a lot of confusion amongst the investment community and opinion is divided as to whether we will witness inflation or deflation.
Wednesday, September 23, 2009
Martin Weiss Abandons Deflation for Inflation After 27 Years / Economics / Inflation
By: Gary_North
Dr. Martin Weiss has reversed course. He now thinks price inflation lies ahead.
This is the equivalent of Steve Jobs announcing: "The future of computing over the next decade is with Microsoft Windows 7."
Read full article... Read full article...
Wednesday, September 23, 2009
UK Inflation Forecast, Will RPI Deflation Return to Inflation? / Economics / Inflation
By: Nadeem_Walayat
UK RPI Inflation data of minus 1.3% for August 09 continues to show deflation moderating from the June low of -1.6%. Whilst the Governments preferred CPI inflation measure recorded a slight dip to 1.6% from 1.8% dipping further below the Bank of England's target rate of 2%.
Monday, September 21, 2009
From Deflation to Inflation / Economics / Inflation
By: Martin_D_Weiss
Step by step, with little fanfare and great complacency, we are witnessing a fundamental, global shift that’s rapidly transforming the investment scene:
The forces of deflation are temporarily receding; and in the meantime, the forces of inflation threaten to roar back with a vengeance.
Read full article... Read full article...
Monday, September 21, 2009
Is Fed Money Printing About to Trigger Inflation? / Economics / Inflation
By: Mike_Shedlock
Inquiring minds are wondering about the possibility of "pent-up" inflation from the massive expansion money supply by the Fed. Our search for the truth starts with the question "Which Comes First: The Printing or The Lending?"
This is a critical question given the massive expansion of base money by the Fed as shown in the following chart.
Thursday, September 10, 2009
A Tale of Two Inflations / Economics / Inflation
By: Tim_Iacono
For some time now, the disparity between price increases for imported goods and price increases for domestic goods and services has been of great interest to me and, after working through all of the applicable Labor Department data on this subject, it quickly becomes clear that there is an interesting story to tell here about two very different types of U.S. inflation in recent years - domestic inflation and imported inflation.
Sunday, August 30, 2009
Fed is Accelerating the Monetization of Debt, High Inflation is on Its Way / Economics / Inflation
By: Global_Research
Bob Chapman writes: The public option for Obama insurance coverage has been described as just a sliver of the overall proposal. Universal coverage directly by government was not an essential element says Health & Human Services. Of course it was. The program is in retreat and the only way the Democrats can get passage of any kind is to re-craft a toothless passage and ram it through in a party line vote.
Tuesday, August 25, 2009
Inflation Breeds Even More Inflation / Economics / Inflation
By: MISES
Thorsten Polleit writes: I. Warning Against Fiduciary Media
Early in the 20th century, Ludwig von Mises warned against the consequences of granting the government control over the money supply. Such a regime inevitably creates money through bank credit that is not backed by real savings — a type of money that Mises termed "fiduciary media."
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Thursday, August 20, 2009
If Inflation Is a Monetary Phenomenon, Is U.S. Hyperinflation a Clear and Present Danger? / Economics / Inflation
By: Paul_L_Kasriel
We hear a lot of concern that the Fed's mushroomed balance sheet over the past two years is setting the stage for a 1970s' style inflation here. So long as we have a fiat (a.k.a. Chrysler?) monetary standard, the threat of hyperinflation always lurks. But is the stage currently being set for such an eventuality? I do not think so.
Wednesday, August 19, 2009
Don't Fall for the Deflation Hype, Beware Inflation Remains a Threat / Economics / Inflation
By: MoneyWeek
So deflation's not all bad after all then.
The average commuter will see the price of a season ticket fall by around 0.4% next year, after the annual rate of retail price index inflation came in at -1.4% in July. It might not sound like much of a price cut, but it's a damn sight better than the 6% raise most had to pay out this year.
Read full article... Read full article...
Sunday, August 16, 2009
The Fight Between Inflation and Deflation is Over! / Economics / Inflation
By: DailyWealth
Porter Stansberry writes: There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.– Ludwig von Mises
Friday, August 14, 2009
Misguided Worries About Inflation / Economics / Inflation
By: Mike_Shedlock
Inquiring minds reading about the threat of massive inflation looming on the horizon are asking "Where's the Inflationary Beef?" It's a good question too, so let's search far and wide for symptoms.
Wednesday, August 12, 2009
Get Ready for Startling CPI Inflation Data this October / Economics / Inflation
By: Michael_Pento
Get ready to be hit by some startling inflation data. The data soon to be released by the government will put a dagger through the hearts of those who are predicting a protracted period of deflation. Wall Street and Washington are telling you inflation isn’t something we need to be concerned about for years to come. The truth is starting this October the reported Consumer Price Inflation data will become ugly. That is because the year over year comparisons of energy and commodity prices become very unfavorable.
Read full article... Read full article...
Tuesday, August 11, 2009
The Most Accurate Predictor of Inflation (video) / Economics / Inflation
By: INO
The following video covers inflation, the Achilles heel of the financial markets, and how to really trade like the pros.
Read full article... Read full article...
Monday, August 03, 2009
Why We Can't Avoid Rampant Inflation / Economics / Inflation
By: Money_Morning
William Patalon III writes: Has the massive Obama stimulus plan put us on a collision course with virulent inflation?
It sure looks that way.
Read full article... Read full article...
Monday, August 03, 2009
Balkan-Style Inflation Is Coming to Us, Thanks to Our Masters / Economics / Inflation
By: LewRockwell
Michael S. Rozeff writes: In 1963, Milton Friedman and Anna Schwartz wrote "Inflation is always and everywhere a monetary phenomenon." The thrust of this statement is that inflation is caused by unsound monetary arrangements – not by those who are raising prices or asking for higher wages, and not by oil speculators or by dealers in foreign exchange. This statement was made at a time when blame was being placed for inflation on groups in society.
Tuesday, July 14, 2009
What's the Real CPI Inflation Rate? / Economics / Inflation
By: Mike_Shedlock
Inquiring minds are asking "What is the Real CPI?" It's a good question, too. However, you can find many widely differing opinions. For example, you will get one answer from the government, a different answer from sites like Shadowstats, and a third opinion from me.
Sunday, July 12, 2009
Fed Deflation Propaganda to Meet Wealth Destroying Inflation / Economics / Inflation
By: MISES
Howard S. Katz writes: The Federal Reserve is lying about the nation's money supply (M1). The current figure for money supply is being given as $1.6 trillion. The actual number is $2.34 trillion. The reported number is equivalent to an increase of 16% over the past year. The actual number is equivalent to an increase of 70% over the past year. This compares with the nation's high money-supply increase of 16.9% in 1986.
Wednesday, July 08, 2009
HyperInflation or Deflation? / Economics / Inflation
By: Puru_Saxena
At present, the investment community is divided as to whether the world economy faces hyperinflation or deflation. Some observers are convinced that the central banks’ printing press will take the world towards hyperinflation whereas others believe that the ongoing contraction in American private-sector debt will result in outright deflation. So, what will the future bring?
Monday, July 06, 2009
Is Inflation a Fact… Or Just an Opinion, Part2? / Economics / Inflation
By: Graham_Summers
Yesterday I outlined the basic arguments for why inflation is believed to have hit the market or will be soon. In a nutshell, inflationists look at the Fed’s money printing as shown by the US Monetary Base and claim that inflation must be just around the corner.
Friday, July 03, 2009
Inflationary Crack-up Boom has Commenced in the G7 Economies! / Economics / Inflation
By: Ty_Andros
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. --Ludwig von Mises
Wednesday, July 01, 2009
Walls to Block U.S. Deflation / Economics / Inflation
By: Jim_Willie_CB
Many are the obstructions to the so-called (mislabeled) deflation threat within the US Economy. To begin with, falling asset prices does not constitute deflation. One of the primary objectives of the banking elite in firm control of the USGovt and US Congress is to confuse the public and investment community on the entire topic of inflation, what it is, how it is measured, and its risks. The same goes for deflation. All debate as to whether the Untied States will suffer from inflation or deflation is a horrible misdirected distraction that manifests the confusion. The US will suffer both higher monetary inflation and worse economic deterioration, not one or the other, but BOTH, and with steadily increasing intensity.
Wednesday, July 01, 2009
Is Inflation a Fact… Or Just An Opinion? Part1 / Economics / Inflation
By: Graham_Summers
We need to seriously re-assess the threat of inflation.
Anytime a particular point of view reaches mass hysteria, you HAVE to be willing to look at it from a different perspective. Today, inflationary fears are beginning to reach that point. The words “Weimar” and “Zimbabwe” are thrown around regularly. Hyperinflation is becoming a serious point of discussion even amongst people who rarely focus on financial markets.
Read full article... Read full article...
Tuesday, June 30, 2009
Inflationary Pressures and the MAE Faber Investment Strategy / Stock-Markets / Inflation
By: Guy_Lerner
William Hester, CFA is a Senior Financial Analyst with the Hussman Funds, and he has written an interesting article that attempts to answer the question: "does the current economic backdrop yet have the characteristics that usually coincide with the end of secular bear markets?"
Monday, June 29, 2009
Apples and Inflation / Economics / Inflation
By: Michael_Pento
Last week on CNBC’s “The Kudlow Report” there was a thrilling debate over inflation between Alan Blinder and Arthur Laffer. Mr. Laffer (former member of Reagan’s Economic Policy Advisory Board) encapsulated his position that we need to fear the return of inflation by simply stating that “…if you have a huge increase the supply of apples, the price of apples falls.” While Mr. Blinder (former Vice Chairman of the Board of Governors of the Federal Reserve System) responded by stating, “If people suddenly want to hoard apples and the apple suppliers provide a lot of apples, you’re not going to have inflation of apple prices.”
Read full article... Read full article...
Wednesday, June 24, 2009
Inflation or Hyperinflation / Economics / Inflation
By: Axel_Merk
Inflation is dead – long live inflation! We hear about the threat of hyperinflation in the media – is this for real, can it happen in the U.S.? Are we hyping up the word inflation, is it an inflationary play of words to grab attention to discuss the threat of hyperinflation? Let’s deflate the hype and put inflation where it belongs… at the forefront of your concerns.
Monday, June 22, 2009
A High Unemployment Rate Correlates to a High Rate of Inflation / Economics / Inflation
By: Michael_Pento
It absolutely amazes me how sanguine the Fed, Treasury and Administration are about the prospects for subdued inflation. What they and many economists like to point to as the source of their optimism is the high rate of unemployment, which is currently 9.4%.
Sunday, June 21, 2009
Mass Deflation or Inflation? / Economics / Inflation
By: LewRockwell
Gary North writes: Back in 1973, gold standard advocate John Exter made a phrase famous in hard-money circles: "Pushing on a string." Exter argued that prices of all assets except gold (he ignored silver) would someday collapse because of the pyramiding of debt. Banks would eventually cease to lend, out of fear of default. That would cause the default.
Wednesday, June 17, 2009
How to Forecast Stock and Commodity Asset Prices Part2 / Commodities / Inflation
By: Adrian_Ash
Pick a Number...Any Number, "We didn't abandon the money-supply aggregates. They abandoned us..."
TIME WAS that central banks targeted and fretted about keeping their currency stable against the Dollar.
Read full article... Read full article...
Sunday, June 07, 2009
London Retail Price Inflation Falls the Most Over the Past 12 Months / Economics / Inflation
By: HBOS
London experienced the largest decline in retail prices1 over the past year with a 2.8% fall between 2008 quarter one and 2009 quarter one, according to new research by Halifax. This was more than twice the 1.3%* fall for the UK as a whole. However, despite this, the overall price level in the capital remains higher than any other UK region. All 12 UK regions recorded a decline in retail prices over the past 12 months.
Friday, June 05, 2009
Ending of Deflation Fears, Big Inflation Coming / Economics / Inflation
By: Zeal_LLC
At the height of the stock panic in late November, the flagship S&P 500 stock index had plunged 49% year-to-date. Fully 2/3rds of this decline happened in the 9 weeks leading into the panic lows! Naturally the psychological impact of such an epic selloff was utterly massive. Fear exploded to unprecedented extremes.
Tuesday, June 02, 2009
Inflation or Deflation, Which is the Greater Risk Over the Next Five Years? / Economics / Inflation
By: Paul_L_Kasriel
I will not keep you in suspense. I believe that the greater risk for the global economy in general and the U.S. economy in particular is inflation, not deflation. I arrive at this conclusion both on secular and cyclical grounds.
Secular Factors
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Monday, June 01, 2009
Stocks and Commodities Markets Retro-inflation Revisited / Commodities / Inflation
By: Clif_Droke
Back in 2001-2002 I used the term “retroflation” in a series of newsletters and articles to describe what I saw as a battle between the forces of inflation and deflation. The Kress 30-year cycle had peaked in late 1999 and with it the 1990s bull market in stocks. The U.S. was in the throes of economic recession and tech stocks were in freefall. Yet the Kress cycles called for a major bottom in late 2002 with the 6-year/12-year cycle bottoming and the Fed was already beginning to aggressive cut interest rates, showing that it was serious about re-inflating the economy.
Thursday, May 07, 2009
This is Not the 1930’s Depression, Which Means High Inflation to Come / Economics / Inflation
By: Michael_Pollaro
Many comparisons have been made between today’s financial and economic crisis and the Great Depression, none more than the specter of deflation. Well, contrary to what happened during the Great Depression and contrary to the deflationary forecasts of government leaders, central bankers and economists, deflation, while always possible, is, in this man’s opinion, highly unlikely. Why’s that? Because the monetary and political framework of today is nothing like that of the early 1930’s. In fact, it’s nothing like anything seen, ever. Quite simply, today’s monetary and political framework is built for inflation, as much inflation as the government, the Federal Reserve and their banking partners want. And inflation, and a whole lot of it, is exactly what we are about to get.
Wednesday, April 29, 2009
The Two Gaping Holes in the Inflationist Argument / Economics / Inflation
By: Andrew_Butter
The current debate revolves around the simplified monetarist equation (which everyone accepts), that says (M•VT = P•TT) where (M) is the amount of (liquid) money in the system, (VT) is the transactions velocity of this money which is the average frequency across all transactions with which a unit of money is spent (i.e. how fast it moves from one pocket to another), (PT) is the price of goods and services being traded and (T) is an index of the real value of aggregate transactions (no it's not the number of transactions, that's included in (V) http://en.wikipedia.org/wiki/Quantity_theory_of_money)). [VT] and [T] are hard to measure and the equation can also be expressed as (M•V = P•Q) where (Q) is output, which approximates to real GDP, typically (M) is measured and (V) is calculated from (V=M/nominal GDP).
Tuesday, April 21, 2009
UK RPI Deflation -0.4%, CPI Inflation 2.9% / Economics / Inflation
By: Nadeem_Walayat
UK RPI Inflation data of minus 0.4% for March represents real deflation in the official data. Whilst the Governments preferred inflation measure CPI recorded a smaller decline to 2.9% which still puts it well above the Bank of England's target rate of 2%. RPI deflation is not so surprising given the panic interest rate cuts from 5% at the beginning of October 2008 to just 0.5% by the last cut of March 2009, these cuts in interest rates coupled with quantitative easing aka "money printing" to drive down long-term interest rates and hence mortgage rates is resulting in real deflation for those with large mortgages of as much as minus 5%, therefore is providing for mini 'temporary' cash flow boom for those mortgage holders that have secure employment during the recession.
Sunday, April 19, 2009
Does Inflation Targeting Make Any Sense? / Economics / Inflation
By: Mike_Shedlock
Calculated Risk has framed an interesting Inflation Debate Between Volcker vs. Kohn without weighing in on the matter. I will gladly weigh in, but first let's review the articles.Read full article... Read full article...
Thursday, April 02, 2009
The Inflationary Depression, Peter Schiff Interviews Marc Faber / Economics / Inflation
By: LewRockwell
Dr. Marc Faber runs his own business, Marc Faber Limited, which acts as an investment advisor and fund manager. He publishes a widely read monthly investment newsletters The Gloom Boom & Doom report which highlights unusual investment opportunities, and is the author of several books including Tomorrow's Gold – Asia's Age of Discovery which was first published in 2002 and highlights future investment opportunities around the world. Dr. Faber is also a regular contributor to several leading financial publications around the world. A book on Dr. Faber, Riding The Millennial Storm , by Nick Vittachi, was published in 1998. In late February, Euro Pacific President Peter Schiff interviewed the eminent economist Marc Faber by telephone from his office in Hong Kong. Read full article... Read full article...
Friday, March 27, 2009
The Inescapable Inflationary Realities of Quantitative Easing and Economic Stimulus / Economics / Inflation
By: Ty_Andros
$14 million, million, or stated another way $14 trillion. The annual GDP of the US is approximately $14 trillion or $46,666 for every man, woman and child in the US - either way you view it, this is the INCONCEIVABLE amount that has been spent, printed or guaranteed since January 2007 in the US; it does not include the government machinations in other G7 countries. And what have you and your family received from that $46,666 per person? MOSTLY nothing and you will get mostly nothing from the next $46,000 and the next $46,000; ut you will get one thing from it: the bill.Read full article... Read full article...
Thursday, March 26, 2009
Dear Chancellor: Inflationary Facts / Economics / Inflation
By: Adrian_Ash
A draft of this week's open letter – from Bank of England governor Mervyn King to UK chancellor Alistair Darling – which BullionVault found blowing down Threadneedle Street early Tuesday...Read full article... Read full article...
Tuesday, March 24, 2009
Roadmap to Inflation And How to Protect Your Investments / Economics / Inflation
By: John_Mauldin
What happens when inflation once again returns. As this week's Outside the Box writer, James Montier, writes, we may want to start thinking now about inflation insurance and he mentions a few ways to do so. But this letter is a must read for his bringing to light a speech by Fed chairman Ben Bernanke in 2000 given to the Japanese, where he suggest inflation targeting: Read full article... Read full article...
Sunday, March 22, 2009
Economic Crisis "The Worst Is Yet To Come!” / Economics / Inflation
By: David_Vaughn
What's happened to gold? Is it still out there? You better believe it is still out there and will continue to be “out there” and for a very long, long, time. What are the banking gurus predicting for gold? Read full article... Read full article...
Friday, March 20, 2009
Fed Rings the Mother of all Inflationary Bells / Interest-Rates / Inflation
By: Peter_Schiff
There is an old adage on Wall Street that no one rings a bell at major market tops or bottoms. That may be true in normal times, but as many have noticed, we are now completely through the looking glass. In this parallel reality, Ben Bernanke has just rung the loudest bell ever heard in the foreign exchange and government debt markets. Investors who ignore the clanging do so at their own peril. The bell's reverberations will be felt by everyday Americans, whose lives are about to change in ways few can imagine.Read full article... Read full article...
Friday, March 20, 2009
Inflation- Central Banks Making Sure It Happens Everywhere / Economics / Inflation
By: Adrian_Ash
"Gold and the Euro just hooked up together again. But for how long depends on central-bank policy..."
SO BEN BERNANKE SAYS the United States has plunged into a deflationary depression.
Read full article... Read full article...
Friday, February 20, 2009
U.S. CPI Reverts from Deflation Back to Inflation Mode / Economics / Inflation
By: Andy_Sutton
For the better part of the second half of 2008, the decision was an easy one. For the first 30 or so days of 2009, the decision remained easy. Then something changed. Something subtle, but at the same time worthy of our utmost attention. Producer and consumer prices began to climb off the mat and beginning in January 2009, there has been a rather remarkable turnaround. Granted, one month does not a trend make, but in this environment, big moves, which have become commonplace bear even more study when they reverse themselves on a dime. Read full article... Read full article...
Wednesday, February 11, 2009
Deflation Is Here; Time to Protect Against Future Inflation? / Economics / Inflation
By: Money_and_Markets
Nilus Mattive writes: It's clear that deflation has taken center stage in the U.S. economy. As I told my Dividend Superstars subscribers last month, you can see falling prices just about everywhere you look.
For example, the Consumer Price Index DROPPED 0.7% in December 2008. That's a marked departure from the gains we had been seeing. Even if you exclude food and gas prices, consumer prices were still flat for the month. What's more, the full-year data showed consumer prices rose a paltry 0.1% vs. a whopping 4.1% jump in 2007.
Read full article... Read full article...
Sunday, January 25, 2009
Is Big Inflation Coming? / Economics / Inflation
By: Mike_Shedlock
Adam Hamilton at Zeal is predicting Big Inflation Coming .
The growing legions of deflationists see an unstoppable depression-like deflationary spiral approaching like a freight train. They cite some convincing data. The stock markets have been cut in half in just a year. In the past 6 months, some key commodities prices fell farther and faster than they did in the entire Great Depression. House prices are down by double digits across the nation, with no bottom in sight. And credit is a lot harder to come by today than in any other time in modern memory.
Read full article... Read full article...
Friday, January 23, 2009
Deflation Misconceptions and Inflationary Parabolic Money Supply Growth / Economics / Inflation
By: Zeal_LLC
Late 2008's stock panic has certainly had a complex and multifaceted impact on popular psychology. Mindsets and outlooks that were scoffed at as recently as 6 months ago have suddenly become fashionable. One of the more intriguing is the meteoric rise to prominence of the deflation thesis.
The growing legions of deflationists see an unstoppable depression-like deflationary spiral approaching like a freight train. They cite some convincing data. The stock markets have been cut in half in just a year. In the past 6 months, some key commodities prices fell farther and faster than they did in the entire Great Depression. House prices are down by double digits across the nation, with no bottom in sight. And credit is a lot harder to come by today than in any other time in modern memory.
Read full article... Read full article...
Wednesday, January 21, 2009
Why the Credit Crisis Bailouts Will Send Inflation Soaring / Economics / Inflation
By: Nick_Barisheff
The US financial crisis has now spread across the globe. Years of easy credit created massive asset bubbles in the housing and financial services sectors. As bond fund manager Bill Gross points out, there was “too much exuberant leverage, not enough regulation; too strong a belief in asset-based prosperity, too little common sense that prices could go down as well as up; excessive “me first” greed, too little concern for the burden of future generations.” Read full article... Read full article...
Tuesday, January 20, 2009
Is it Deflation yet, or is Hyperinflation on the way? / Economics / Inflation
By: Joseph_Toronto
Let's take a short detour to make sure we understand what inflation and deflation are. Milton Friedman, the father of the monetarist school of economics said that inflation is always and everywhere a monetary phenomenon. This is usually explained to the layman as “too much money chasing too few goods.” Read full article... Read full article...
Thursday, January 08, 2009
UK Inflation Forecast 2009 / News_Letter / Inflation
By: NewsLetter
December 30th , 2008 Issue #43 Vol. 2UK inflation for November as measured by the CPI continued its sharp decline, falling by 0.4% to 4.1% from the peak of 5.2% for Septembers data. The Bank of England would have been aware of the sharp fall in Octobers inflation at the earlier November MPC meeting that saw an near unprecedented panic interest rate cut of 1.5%, followed by a further 1% cut in December that has taken UK interest rates sharply lower from a peak of 5% in early October to stand at just 2% today. The interest rate cuts have been accompanied by BOE statements that UK economy is expected to contract by 2% GDP during 2009, that puts the UK on target to experience a worse recession than that of the early 1990's. However as my earlier analysis suggested that the UK could experience a decline of as much as 3% for 2009 which would make this recession just as bad if not worse than that of the early 1980's which wiped out much of Britain's manufacturing base.
Read full article... Read full article...
Friday, January 02, 2009
False Deflation Diagnosis and Gold Bullish Crossover Signal / Economics / Inflation
By: Jim_Willie_CB
One of the most bothersome questions from 2005 to 2007 used to be whether the Untied States would ultimately submit to inflation or deflation. This is actually the wrong question. Many analysts in my view are incorrect in their conclusion that the US suffers from a powerful deflation episode, since they endorse the wrong definition, confuse effect with cause (as usual), do not properly monitor the money flow, and then draw improper conclusions from prices. They suffer from a type of Keynesian Tunnel Vision. They are confused, and fail to adapt certain key measures after the financial sector highjacked the entire national system in the last two decades. Read full article... Read full article...
Friday, January 02, 2009
U.S. CPI Inflation Turning Negative, Deflation? / Economics / Inflation
By: Mike_Shedlock
" Owners' Equivalent Rent " (OER) is the largest component in the government measure of the Consumer Price Index (CPI). OER is a process in which the BEA estimates what it would cost if owners were to rent the homes they own from themselves. I do not believe this to be a valid pricing barometer.By ignoring housing prices, CPI massively understated inflation for years. The CPI is massively overstating inflation now.
Read full article... Read full article...
Thursday, December 18, 2008
UK Inflation CPI Slumps to 4.1% Whilst RPI Crashes to 3% / Economics / Inflation
By: Nadeem_Walayat
UK inflation as measured by the CPI continued its sharp fall following Octobers slump from 5.2% to 4.5% by falling in November by 0.4% to 4.1%. This follows hard on the heels of the Bank of England's continuing panic interest rate cuts that saw another 1% sliced off of the UK base rate at Decembers MPC meeting to 2% as the UK remains on target to experience a recession just as bad as that of the early 1980's. Meanwhile the RPI inflation measure crashed by 1.2%, falling from 4.2% to 3% as increasingly the RPI measure heads for true deflation during 2009 i.e. negative inflation. Read full article... Read full article...
Friday, December 12, 2008
Government Flood of Treasury Obligations Telegraphing Inflation / Interest-Rates / Inflation
By: Peter_Schiff
A Nightmare Before Christmas - Like many pragmatic economists I have always warned that rapid expansions of government debt would result in inflation and higher interest rates. The explanation was always simple: rising supply of government debt inflates the money supply and weakens the government’s ability to service its debt through legitimate means.Read full article... Read full article...
Monday, December 08, 2008
Real Threat is Inflation Not Deflation / Economics / Inflation
By: Money_Morning
Keith Fitz-Gerald writes: We're “officially” in a recession and the panicky markets are bracing for deflation. But what most investors don't realize is that inflation – not deflation – is the real threat that they face.
For more than a year now, I've been telling readers and attendees at financial conferences around the world that the United States has been in a recession since last November.
Read full article... Read full article...
Wednesday, November 26, 2008
Failed Fiat Monetary System Heading for Rampant Inflation / Economics / Inflation
By: Clive_Maund
Paulson's favorite song: "I wish it could be Christmas every day" - well it can be thanks to the Fiat money system...
So the trough is about to be refilled, this time with even more feed - $800 billion to be precise. Thanks to the Fiat money system this extra liquidity can simply be created out of thin air, all it takes is a few keystrokes. The cost could be passed on to the taxpayer via higher taxes, but they might balk at this so it's better to stealthily get them to pay for it by diluting the purchasing power of their money.
Read full article... Read full article...
Thursday, November 20, 2008
Falling Consumer Prices Good or Bad News for Consumers? / Economics / Inflation
By: Paul_L_Kasriel
Thursday the BLS reported that the Consumer Price Index (CPI) fell by 1.0% both seasonally adjusted as well as unadjusted. On an unadjusted basis, this was the largest monthly decline in the CPI since January 1938 (see Chart 1). Some journalists and some economists are exclaiming that these falling consumer prices are "good" for consumers. Are they? Read full article... Read full article...
Thursday, November 20, 2008
Explanation of the Price Effects of Inflation and Deflation / Economics / Inflation
By: EWI
The U.S. Labor Department reported a 1 percent drop in the consumer price index for October 2008. The drop marked the largest decline in 61 years, and it was the first decline in that measure in nearly a quarter of a century. The 1 percent drop was twice as large as many mainstream analysts had forecast. Such a large decline in consumer prices is forcing U.S. policymakers to rethink the possibility of deflation in America. For more on deflation, we turn to Robert Prechter, the man who literally wrote a book on how to survive it.Read full article... Read full article...
Wednesday, November 19, 2008
U.S. Consumer Price Index (CPI) Largest Decline Since 1947 / Economics / Inflation
By: Joseph_Brusuelas
The October estimate of consumer price index declined -1.0% (-0.961%) m/m and was up 3.7% y/y. The core ex-food and energy estimate fell -0.1%(-0.071%) m/m and is up 2.2%. The ex-food estimate saw a sharp drop of -1.2% m/m and the ex-energy component was flat for the month. Energy prices dropped -8.6% and prices in the services sector were also flat for the month.Read full article... Read full article...
Tuesday, November 18, 2008
Producer Price Inflation Biggest Drop On Record / Economics / Inflation
By: Mike_Shedlock
Bloomberg is reporting Producer Prices Fall Most on Record . Yields on 10-year notes touched the lowest in more than three weeks as a slumping economy raised the specter of deflation. Oil reached a 22-month low. China surpassed Japan as the largest foreign holder of Treasuries, easing concern that global investors will stop buying U.S. debt as the government funds a record budget deficit.
Read full article... Read full article...
Monday, November 17, 2008
Current Commodities Price Deflation to be Followed by Massive Inflation Later / Commodities / Inflation
By: Richard_Shaw
The global economy is declining. As a result, prices of important kinds of “stuff” is falling. Governments are pouring money onto the markets to solve a problem that may have been caused by easy money originally.
If you party too much and awake the next day with a hangover, taking a shot of alcohol may take the immediate pain away. However, it only delays and probably increases the pain when you finally decide to stop drinking, or become so sick you can't drink any more. Taking that morning after drink is referred to as taking a “hair of the dog that bit you”.
Read full article... Read full article...
Tuesday, October 14, 2008
UK CPI Inflation Explodes Higher to 5.2% / Economics / Inflation
By: Nadeem_Walayat
The inflationary spike higher continued on release of September's inflation data which saw the CPI measure burst through 5% to hit 5.2% from 4.7% the month before. CPI crossed above the RPI inflation measure for the first time in 7 years which now stands at 5%, as the below graph illustrates.Read full article... Read full article...
Tuesday, September 16, 2008
UK CPI inflation Soars to 4.7%, Paralysis at the Bank of England / Economics / Inflation
By: Nadeem_Walayat
UK CPI inflation hit 4.7%, soaring onwards and upwards towards 5%, which triggers another letter from the Bank of England Governor, Mervyn King explaining why he has again failed in the BOE's primary objective of controlling inflation to below 3%. Inflation has been driven higher by food and energy costs that despite crude oil and natural gas price falls has seen clear profiteering amongst energy and gas supply companies lifting consumer energy prices by over 30% in recent weeks which and contrary to the industries propaganda machine is not reflected in the forward gas market prices for winter 2008, therefore triggering a potential windfall tax of at least £1 billion which could be announced at the Labour party conference this week. Read full article... Read full article...
Sunday, August 17, 2008
Double Digit Inflation Forecasts are way off base / Economics / Inflation
By: Mike_Shedlock
BusinessWeek is Bracing for Inflation . Let's take a look at an article written by John K. Castle, CEO of Castle Harlan, a New York private equity firm.
Growing evidence suggests American consumers, businesspeople, and political leaders should all be bracing for double-digit inflation, probably as early as 2009. Read full article... Read full article...
Tuesday, August 12, 2008
UK Inflation Shocking Rise to 4.4% CPI Confirms Stagflation / Economics / Inflation
By: Nadeem_Walayat
Inflation data for July CPI inflation came in at a truly shocking rate of 4.4%, up 0.6% on June and well beyond our expectations for CPI inflation of 4.1% with the upper worse case scenario of inflation of 4.3%. Whilst at the same time the more recognised RPI measure equally rose to a shocking 5% rate also up 0.6% on June and now matches the base interest rate of 5% as the UK heads for negative real interest rates which has very bearish implications for sterling.Read full article... Read full article...
Friday, August 08, 2008
Rising Inflation Ensures Stock Markets Headed for More Distress / Economics / Inflation
By: Joseph_Brusuelas
The enthusiastic response of the market to the moderation in the price of imported oil and the Fed monetary statement is a bit overdone. It is based on the hope that inflation will moderate rather than a hard-nosed look at the pricing environment. Our Senior Economic advisor Bill Poole, who knows more than a bit about crafting a coherent Fed statement, reminded the market recently that since August 2006 the FOMC in one way or another has been signaling that they anticipate inflation will moderate in coming quarters. Yet, our core inflation forecast suggests otherwise. Read full article... Read full article...
Friday, August 01, 2008
What's the Real Rate of Inflation? / Economics / Inflation
By: HRA_Advisory
There is a debate building around inflation. The outcome of this debate will determine the direction of interest rates and credit creation. By extension many commodity prices, especially precious metals and energy, will get direction too.
This past week saw the release of the US CPI reading for June with a “headline” increase of 1.1%. Even the much derided “no heat-no eat” Core Rate that excludes food and fuel was up 0.3% for the month. The 12-month CPI gain in the US is now 5%, and even a sustained pullback in oil prices won't cause consumer inflation to retrench much this year.
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Thursday, July 31, 2008
Fed Massive Injections of Liquidity to Fuel Surging Inflation / Interest-Rates / Inflation
By: Michael_Pento
It amazes me how many investors are now concerned about a deflationary spiral occurring in commodity prices. They site oil prices that are slightly off all time highs or a falling CRB index as their examples. While it is true many commodities are off historic highs, it is hardly reasonable to project a continuation of falling asset prices given the state of the banking sector and the consumer.
I know that sounds counterintuitive given the current state of the credit crisis, but it is exactly that crisis and the Fed's response to it, which will soon forge the path to inflation rates the likes of which have never before been experienced in this country's history. The most important question investors must ask themselves is how inflationary is the current 2% Fed Funds rate?
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Wednesday, July 30, 2008
Curing US Inflation, Zimbabwe Style / Economics / Inflation
By: Adrian_Ash
"...Three hundred billion here, $300bn there, and pretty soon you're talking about a wave of dilution hitting cash-holders, bond owners, stock investors and US Dollar earners everywhere..."
YOU'D BE FORGIVEN for thinking they planned it together last night.
Read full article... Read full article...
Wednesday, July 16, 2008
UK Flawed Inflation Measure Stoking Wage Price Spiral and Worker Discontent / Economics / Inflation
By: Nadeem_Walayat
UK inflation continues to accelerate after busting through the 3% ceiling in April, and hitting 3.8% in June. However the real rate of inflation being experienced by consumers is a function of the actual purchases made rather than the price of the wide ranging basket of more than 110,000 goods and services that the CPI inflation rate attempts to track. The reason for this is that consumers are feeling the relentless impact of rising fuel, energy, food and credit costs whilst at the same time impacted by asset price deflation as the housing market completes its 10th month in a bear market that has seen house prices now decline by nearly 10% from the August 2007 high or by an average of £20,000. In addition to this the UK stock market has lost 20% of its value from its 2007 highs.Read full article... Read full article...
Tuesday, July 15, 2008
Former Prime Minister Confesses Real UK Inflation is 10%, Triple Official Rate of 3.8% / Economics / Inflation
By: Mark_OByrne
Gold finished trading in New York yesterday at $972.10, up $12.00 and silver was up to $19.15, up 38 cents. Gold rose in trading in Asia before further rises in early European trading. Gold is now up some 7% in the last 5 trading days (from below $920 to over $983) and in normal circumstances one would expect a correction and consolidation. However, these are not normal circumstances. Read full article... Read full article...
Tuesday, July 15, 2008
Inflation Surges to 3.8% as Bank of England Loses Control of Monetary Policy / Economics / Inflation
By: Nadeem_Walayat
The official rate of UK inflation as measured by the CPI index surged higher for June to 3.8% from 3.3% which is inline with Market Oracle expectations that is expected to see inflation continue trending higher to well above 4% over the summer months, with the RPI inflation measure set to rise to above 5%. The impact of the inflationary surge is for the Bank of England to have effectively lost control of monetary policy in that the Bank is paralysed into inaction, neither able to cut interest rates to prevent the UK economy from plunging into a recession, nor able to raise interest rates to curb surging inflation for fear of triggering a deeper recession. Read full article... Read full article...
Sunday, July 13, 2008
Farewell Indymac, What's Next? Say Hello to the 1970s Inflation Rate (Part2) / Interest-Rates / Inflation
By: Mike_Stathis
Those of you who are familiar with my previous publications know my real estate forecasts remain unchanged since first published in 2006. To reiterate, I'm expecting an average decline from peak prices of 30% (best case scenario) to 35% (worst case scenario), sending home values back to pre-1999 levels. Within the next three years, mortgage rates should approach 8% and take off thereafter. Soon, we will see a 1970s type inflationary period. This will bode well for owners of real estate rental units. Read full article... Read full article...
Friday, July 04, 2008
Global Inflationary Pressures: No End in Sight / Economics / Inflation
By: Salman_Khan
Inflationary pressures, coming at a time when there are palpable signs of economic slowdown, has been spooking the global Governments, policymakers, financial authorities and marketmen alike. Worldwide, prices of commodities like Crude Oil, Wheat and Rice have skyrocketed in last one year or so. Policymakers have been especially finding themselves helpless in present situation due to the "global" nature of the current inflation. Central Bankers are also in a fix as given the slowdown in economic activity, they won't be able to fight the inflation the way Volcker did by aggressively raising the interest rates back in 1970's. Stagflation is extremely difficult for conventional policy instruments to deal with, since the attempt to deal with any one of the problems tends to exacerbate the other.Read full article... Read full article...
Wednesday, July 02, 2008
GLOBAL INFLATION: The Next Major Obstacle to Economic Growth / Economics / Inflation
By: Aden_Forecast
One thing we find truly amazing about the markets is that they're much more than just investments. Markets provide a way of peeking into the future, if you understand what they're trying to tell you.
These lessons are ongoing but it's fascinating and like a giant puzzle.
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Monday, June 30, 2008
Regional Velocity of Inflation a Consequence of US Trade Deficit / Economics / Inflation
By: John_Mauldin
I mentioned in last Saturday's letter a report by Louis Gave of GaveKal fame on whether inflation may be waning and its importance. Louis gave me permission to use it as this week's Outside the Box. It is typical of the thoughtful analytical work they do.
Louis and his partners and associates at GaveKal write some of the more thought-provoking material I read. They really challenge my position on numerous matters, causing me to look at many items from a different view. That of course, makes this particular piece good for Outside the Box. Whether you agree or disagree, you need to know why you hold a position. If you can't articulate the "against," how can you be sure you truly understand the "for"?
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Wednesday, June 25, 2008
Inflation to Unleash a Financial Tsunami / Economics / Inflation
By: Mark_OByrne
Gold closed at $888.80 in New York yesterday and was up $4.40 and silver closed at $16.61, down 16 cents. Gold fell initially in Asia, then rose in early European trading prior to falling again in recent trade.With oil prices remaining near record highs, near $137 a barrel this morning and the dollar slightly weaker (it breached and remains close to 1.56 against the euro again this morning), gold should remain well bid at these levels but in the short term anything can happen and support is at $880 and $860. With the Federal Reserve likely to leave interest rates on hold at 2%, markets will look to the accompanying statement for indications as to future interest rate direction.
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Tuesday, June 24, 2008
Fed Interest Rate Meeting: The Long-Lasting Costs of Inflation / Economics / Inflation
By: Adrian_Ash
"...The true cost of beating inflation vs. the cost of letting it run..."
"AT THE SURFACE LEVEL" , explains Bradford De Long in a decade-old paper , the destruction of money during the 1970s happened because no one in power "placed a high enough priority on stopping inflation."
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Tuesday, June 24, 2008
The Impact of Rising Prices on Consumers and Producers / Economics / Inflation
By: Paul_J_Nolte
The litany of banks surrendering to the siren call of raising additional capital expanded again last week, in addition to various write-downs from some of the money center banks put the market back on its' heals for the week and opened the door to yet another “test” of the January/March lows. While energy prices have been blamed for the declined last week, in fact oil prices have declined in each of the past two weeks. The inflation reports continue to run uncomfortably “hot” as energy and food prices impact both the consumer and producer prices.Read full article... Read full article...
Tuesday, June 24, 2008
Rising Prices and the Inflation Genie / Economics / Inflation
By: David_Vaughn
Do you believe in high prices? Do you believe that the cost of every day living is climbing substantially higher? I just don't know. Our government has not warned us yet of a real inflationary problem. So the 5 dollars a gallon I now pay for milk is just an illusion. 4 dollar gas may also be an illusion. We must be guided of course by our government as to whether or not inflation is a real threat. So the government remains telling us that we are merely on the edge of an inflationary problem. I feel better already.Read full article... Read full article...
Tuesday, June 24, 2008
Inflation and Negative Real Interest Rates are Necessary to Avoid Depression / Economics / Inflation
By: John_Mauldin
This week's Outside the Box will challenge a few of your base assumptions. Paul McCulley, the managing director at PIMCO, offers us a kind word for inflation and the reasons that the Fed will be on hold for a lot longer than the markets currently think. And part of that is to avoid a real recession or even a depression. Getting this debate right is important.
These are indeed interesting times we live in. I look forward to being with Paul at the end of July on our Maine fishing expedition, where he can defend his proposition to the group of economists and analysts gathered there. Have a great week.
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Monday, June 23, 2008
Inflation and Wages- Another Dangerous Economic Fallacy / Economics / Inflation
By: Gerard_Jackson
Economic fallacies are like dormant microbes, sooner or later they once again become active. However, the view that wages can cause inflation is one fallacy that never seems to go away. There are economists in the US, the UK and Australia warning that wage rises could trigger an inflationary surge. Nothing new here. In early 2005 Mark Whitehouse and Kemba Dunham of the Wall Street Journal complained that too much job growth generated inflation. In their view good job numbers would probably "fuel fears of higher inflation and cause bond prices to fall and interest rates to rise".Read full article... Read full article...
Saturday, June 21, 2008
Fed and US Dollar Credibility at Stake Due to Financial Crises and Surging Inflation / Interest-Rates / Inflation
By: Money_and_Markets
Jack Crooks writes: For the currency markets I follow, and every other financial market right now, inflation is the buzz word. Each and every new report of rising prices releases new concern — whether the threat is revealed in Brazil, the United States, Europe or even your local grocery store.
No one likes forking over more cash this month than they did last month ... for anything. But this inconvenient fact is being increasingly realized across the world.
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Friday, June 20, 2008
Inflation Out of Control- Three Ways to Protect Yourself / Personal_Finance / Inflation
By: Money_and_Markets
Mike Larson writes: I hate to be the one to yell "FIRE" in a crowded theatre. But the time for keeping quiet has long since passed. The time for ignoring the gathering clouds of smoke is over. It's time to sit up, pay attention, and get your portfolio the heck out of harm's way ... because we have a full-scale, five-alarm, inflationary wildfire on our hands.
Allow me to walk you through the overwhelming, undeniable evidence ...
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Tuesday, June 17, 2008
UK CPI Inflation Breaks Above Bank of England's Upper 3% Limit / Economics / Inflation
By: Nadeem_Walayat
The UK Consumer Price Index rose to 3.3% for May 08 above the consensus forecasts of 3.2% pushing inflation to a 11 year high on the back of a surge in import and producer prices. Surging inflation not only puts a hold on further UK interest rate cuts but opens the door to what can only be construed as panic rate hikes later in the year to prevent a wage price spiral from taking hold and pushing the UK economy into stagflation.Read full article... Read full article...
Sunday, June 15, 2008
Central Bankers Finally Tightening the Interest Rate Screws on Inflation / Interest-Rates / Inflation
By: Money_and_Markets
Mike Larson writes: Believe it or not, it's finally happening. It's dawning on Federal Reserve policymakers ... and on many other global central bankers from Canada to Asia to Europe ... and beyond. The "it" they're starting to accept?
It's time for tighter monetary policy.
Read full article... Read full article...
Sunday, June 15, 2008
INFLATION Means the Choice Between Stagflation and Recession- Part 2 / Economics / Inflation
By: Prieur_du_Plessis
Click here for Part 1 - Jim Sinclair (Mineset): Bernanke has painted himself into a corner
“The euro is down hard today on the premise that this is the start of increased interest rates in the US, a statement that is totally ludicrous.
“There are two possibilities here:
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Sunday, June 15, 2008
INFLATION Means the Choice Between Stagflation or Recession / Economics / Inflation
By: Prieur_du_Plessis
The Electric Light Orchestra lyrics “… you took me ohh, higher and higher baby, it's a living thing, it's a terrible thing …” have been mulling through my head over the past week as central bankers' inflation-fighting rhetoric moved to centre stage.
A succession of hawkish comments from US policymakers persuaded pundits that the US rate-cutting cycle was over, resulting in a stronger US dollar, plummeting government bonds, predominantly lower global stock markets (with Asia seeing the most red), and non-agricultural commodities coming off the boil.
Read full article... Read full article...
Saturday, June 14, 2008
Recession Required to Defeat Inflation? / Economics / Inflation
By: John_Mauldin
- Whip Inflation Now
- Where Can We Get Help on Inflation?
- The Patient Died Anyway
- Inflation in Asia and Europe
- There Are No Good Solutions
President Nixon instated price controls on the 15th of August, 1971. Inflation was a little over 4% at the time. Price controls manifestly did not work (resulting in shortages of all sorts and a deep recession) and were rescinded a few years later. President Ford went to Congress with programs to fight inflation that was running closer to 10% in October of 1974, with a speech entitled "Whip Inflation Now" (WIN). He famously urged Americans to wear "WIN" buttons. That policy too was less than effective, and the buttons, in a history replete with silly gestures by governments, should stand on anyone's top ten list of such silly gestures.
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Friday, June 13, 2008
The Consumer Price Index: Inflating the Money Supply / Economics / Inflation
By: Adrian_Ash
"...With the cost of living always rising, not falling, it's a good job there's so much more money around to help pay for things. Right...?"
SURELY the 20th CENTURY'S greatest marketing coup – besides making cigarettes taste of freedom and youth rather than the Sandakan death-march – was kidding the world that "inflation" meant rising prices.
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Friday, June 13, 2008
Bernanke's Open Mouth Operations Attempt at Halting Inflationary Dollar Slide / Economics / Inflation
By: Joseph_Brusuelas
Over the past fortnight Fed Chairman Ben Bernanke has engaged in “open mouth operations” to shape market expectations regarding future monetary policy out of the US Federal Reserve. Mr. Bernanke rhetorically intervened in the global currency markets to prop up a beleaguered dollar, explicitly expressed unease over the current course of inflation and signaled that the Fed would not tolerate a breakout of inflation expectations. Not bad, for a Fed Chairman fighting multiple crisis on multiple fronts. Read full article... Read full article...
Tuesday, June 10, 2008
Inflationary Demand Destruction Delusion / Economics / Inflation
By: Captain_Hook
Demand destruction refers to the effect of a rising price on a good, service, or commodity, where a rising price has the increasing effect of curbing demand. Central planners live under the assumption the above condition set applies to commodities within current circumstances, which we categorize as quasi-hyperinflationary times at present. Here, the understanding is monetization efforts aside for definitional purposes; along with recognizing True Money Supply (TMS) growth rates have been contracting in the States, and nowhere near what could be even be considered high levels, the theory is lags associated with accelerated gains witnessed previously are still working through the system sufficiently to export reactionary inflation in emerging markets that reside on the very cusp of potential hyperinflationary conditions. Read full article... Read full article...
Tuesday, June 10, 2008
Importance of Real US Inflation Rate in Forming Investment Decisions / Stock-Markets / Inflation
By: John_Mauldin
This week in Outside the Box we look at Bill Gross's recent essay on measuring inflation. How you measure inflation makes a difference not only in social security payments but also in what your real returns on bonds are. As Bill notes, there is a significant difference in how the world measures inflation and how it is done in the US. He gives us some insights that are very thought-provoking.
In the last decade economists regularly argued the CPI over-stated inflation by 1%. Now Gross suggests that it may understate inflation by 1%. This week's OTB makes for very interesting reading. Bill Gross is managing director of PIMCO. (www.pimco.com)
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Monday, June 09, 2008
UK Heads for Stagflation as Factory Price Inflation Soars to New Record / Economics / Inflation
By: Mark_OByrne
Gold closed at $895.50 in New York Friday and was up $23.30 and silver closed at $17.37 and was up 30 cents. In the New York Globex market gold subsequently rallied to $902.20 late Friday. Both traded sideways in Asia this morning prior to rallying higher in early European trading.The gas explosion in Western Australia will further curtail supply of gold from that part of the world. It has led to the loss of some 30% of the state's gas supplies and is already creating serious problems for Western Australia's massive gold mining industry and will curtail supply for months, rather than weeks.
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Friday, June 06, 2008
Inflation One Year Ahead - A Look at the Inflation and the Consumer Price Index / Economics / Inflation
By: Joseph_Brusuelas
The recent rise in inflation has not yet been properly captured by the variety of inflation indexes used by the market to assess the pricing environment. The publication of the April Consumer Price Index elicited howls of derision from the market due to the very dubious -2.0% decline in the price of gasoline suggested by the report. At the time, our reaction was that it did not pass the “laugh test” and that once the seasonal adjustments made by the Bureau of Labor Statistics are “adjusted” we are quite confident that the actual increase in headline prices will be accurately accounted for and the increase in core prices that most individuals have observed will also work their way into the data. Read full article... Read full article...
Friday, May 30, 2008
The False Prosperity of Inflationary Booms / Economics / Inflation
By: Adrian_Ash
"...So what's not to love about an inflationary boom...?"
"EVER WONDERED WHY your family budgets never seem to work out as planned?" asked Harry Browne in his 1970 best-seller, How You Can Profit from the Coming Devaluation .
Read full article... Read full article...
Wednesday, May 28, 2008
Central Banks Joined in the Inflation Targeting Craze / Economics / Inflation
By: Adrian_Ash
rt = g rt- 1 + (1 -g ) rt* + q [ Et pt+j – p* ]
"If we wait until a price movement is actually afoot before applying remedial measures, we may be too late..." John Maynard Keynes, A Tract on Monetary Reform (1923)
JUST WHAT ARE central banks for exactly?
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Tuesday, May 27, 2008
Higher Prices Here to Stay / Economics / Inflation
By: Paul_J_Nolte
Absent big economic news, a few rumors of buyouts affecting select stocks, the markets were focused on energy prices and their new ascent to dizzying heights. Cuts of SUV production by Ford and reports of sales up over 20% of hybrid vehicles (not to mention articles about motorized scooters) indicate consumers are beginning to seriously look at changing their driving habits. While conservation remains a couple of years away, the fact that much of the discussion has finally hit the table is a good start.Read full article... Read full article...
Thursday, May 22, 2008
US Treasury Bonds Fast Becoming Certificates of Confiscation / Interest-Rates / Inflation
By: Adrian_Ash
THE PRICE OF GOLD BULLION slipped $10 from a new five-week high in London early Thursday, pulling back to $925 per ounce as crude oil broke new record highs and the US Dollar fell yet again on the forex market." Gold has rallied over 8% in the last five days and is now trading over $80 higher than May's low," notes Mitsui, the precious metals dealer, in London today.
Read full article... Read full article...
Wednesday, May 21, 2008
UK Inflation Heading Back to 2%- What's Mervyn King Smoking? / Economics / Inflation
By: Adrian_Ash
"...The fiat-money experiment – along with the financial life-forms and hallucinations it spawned – has broken out of the lab and onto the street..."
WHEN ALBERT HOFMANN – the Swiss chemist who discovered LSD – passed away at the start of this month, newspaper editors the world over reported it as the death of the man "who experienced the first ever bad trip."
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Tuesday, May 20, 2008
China Now Exporting Inflation Abroad / Economics / Inflation
By: Ned_W_Schmidt
Most of us have been waiting for higher inflation to erupt on the scene for some time. Government statisticians have been able to avoid the reality of market place. How many million words have been written on these web sites on nonsense of core inflation? Simplistic nature of that measure, which ignores developments in prices for oil and Agri-Food, is about to come back to haunt those policy makers that have hidden behind it. Read full article... Read full article...
Sunday, May 18, 2008
Offical Fairytale Inflation Statistics / Economics / Inflation
By: Andy_Sutton
Someone ought to consider changing the calendar. Maybe adding a few extra days so that next month the shock of double-digit annualized increases in import prices can wear off before we're told there is actually no consumer price inflation. The mainstream financial press quickly leapt onto the bandwagon with headlines such as “Inflation remains tame”, “Consumer prices stable” or the most ridiculous, “High Gas prices aren't affecting consumers”. I couldn't help but wonder what planet these folks are living on. It certainly isn't this one. Read full article... Read full article...
Saturday, May 17, 2008
Inflation and the Fed Interest Rate Policy to Continue to Drive the Dollar Lower / Economics / Inflation
By: Joseph_Brusuelas
The interesting and generally questionable conclusions in the April consumer price report provided a false sense of comfort in global financial markets that we believe will be temporary. The finding that the cost of domestic gasoline fell -2.0% month over month during a time when prices at the pump soared well above $4.0 per gallon in many areas was behind the modest official increase in the cost of living for the month. However, savvy market participants that follow the inflation data closely understand that the seasonal adjustments often tend to overshoot the true nature of the data and are prone to monthly revisions. We expect that the data in the coming months will be revised to reflect the reality of what is occurring in the price environment. Read full article... Read full article...
Thursday, May 15, 2008
Government Inflation Data Does Not Match Reality / Economics / Inflation
By: Gary_Dorsch
In an age where governments of every political stripe distort economic data to promote their own self-interests, it's hardly surprising that they present inflation statistics that are wildly at odds with the reality faced by consumers and businesses, and regarded with utter disbelief. In the latest US government report on inflation for instance, there was a glaring “seasonal adjustment,” for energy prices that cast great doubt as to the accuracy of the findings. US Labor Dept apparatchniks said consumer prices rose a smaller than expected 0.2% in April, tamed by energy prices, which were unchanged last month. Utilizing an obscure “seasonal adjustment,” Labor figured that gasoline prices actually fell 2% in April, which doesn't reflect the reality of what consumers were paying at the pump. Furthermore, the IMF's global food price index rose 43% over the last 12-months, but the US consumer price index for food is only 5.1% higher.
Read full article... Read full article...
Tuesday, May 13, 2008
UK Flawed Inflation Measure Explodes Higher, 3% CPI, 4.2% RPI / Economics / Inflation
By: Nadeem_Walayat
The Consumer Price Index (CPI) leapt higher to 3% in April from 2.5% in March, nearly hitting the Bank of England's letter writing trigger level of 3.1%. This confirms the Market Oracle expectations for a surge in UK inflation as not only the UK but all of the worlds major governments are engaged in the process of rampant money supply growth that is feeding through in higher inflation as too much cash is chasing too few goods. This is most visible in the commodities markets where strong price fundamentals coupled with the Bank of England's money supply printing presses running at full stream as evidenced by the £100 billion of new debt loaned to the banking sector in recent months.Read full article... Read full article...
Monday, May 12, 2008
Inflation Fear / Economics / Inflation
By: Paul_J_Nolte
With all the hand wringing about consumer confidence falling to 25+ year lows, it becomes much easier to understand IF we make the assumption that we are in a recession. Others worry about the self-fulfilling prophesy – if we believe we are in a recession, it will be so. However much of what is happening today was planted over a year ago. This too is the reason for why all the rate cuts made by the Fed have had little impact upon investors and the economy. However, the cuts will eventually have an impact – but that is not likely until later in the year. A complicating factor in today's economy is the lack of lending “interest” by banking institutions. Read full article... Read full article...
Friday, May 02, 2008
Ben Bernanke is No Paul Volcker / Interest-Rates / Inflation
By: Peter_Schiff
With what many have described as a flash of monetary discipline worthy of Paul Volcker, Ben Bernanke reduced short-term interest rates this week to a mere 2%, apparently turning a deaf ear to those on Wall Street who wanted more. But now that the dollar-crushing side effects of cheap money are widely understood, there is, in reality, little pressure remaining for steely-eyed Ben to resist.Read full article... Read full article...
Friday, May 02, 2008
Inflation v. Unemployment / Economics / Inflation
By: Gerard_Jackson
It says much about the lousy state of economic debate that the 1993 study The Costs of Unemployment in Australia , produced by the Economic Planning and Advisory Council and co-authored by Raja Junankar and Cezary Kapuscinski, is still being touted as a piece of sound economics. At the heart of this study is the grave economic error a "fight inflation first" policy generally incurs more costs than benefits.Read full article... Read full article...
Wednesday, April 30, 2008
Credit Crisis IS Over, the Old Inflation Crisis Returns / Interest-Rates / Inflation
By: Adrian_Ash
"...Is the foreign US bond-buyer now going on strike, just when the Treasury needs him to pay for tax rebates, investment bank bail-outs, and the first raft of post-Election housing aid...?"
CRISIS OVER then; the Fed has worked its magic! And things will only get better from here.
Read full article... Read full article...
Wednesday, April 30, 2008
US Federal Reserve Wants Inflation to Avoid Deflation / Economics / Inflation
By: Axel_Merk
We are now importing inflation. This does not only apply to the cost of commodities, such as oil, but also to consumer goods imported from Asia. This is a newer trend as, in our analysis, Asia had been exporting deflation until the summer of 2006; since then, we have seen increased pricing power by Asian exporters. Read full article... Read full article...
Wednesday, April 30, 2008
Will the US Fed Create More Inflation in Commodities? / Commodities / Inflation
By: Clif_Droke
Inflation has been investors' main focus lately. A commonly held assumption is that the Fed's aggressive lowering of interest rates will only result in more inflation and an even bigger bulge in commodities prices. Is this a necessary outcome of increased liquidity and lower rates?
Let's examine this belief. Historically, we find that Inflation basically occurs in three situations:
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Monday, April 28, 2008
Hyperinflation- The High Road To Hell / Stock-Markets / Inflation
By: Captain_Hook
If that's where we are going, which appears to be the case depending on your perspective, we might as well take the high road (meaning via hyperinflation), as at least this way our feet are more likely to stay dry during the trip. Isn't this a much better rationale to justify why we humans are in such a hurry to use up the non-renewable resources that are key to our survival? Moreover, isn't it a better way of accounting for why central planners are allowed to debase our currencies / economies than simple greed and ignorance, because even at a slower pace, the oil will be gone soon enough anyway. Here, the assumption is our population bubble is function of easily accessible liquid crude oil, and that once supplies become increasingly strained (as in Peak Oil ), so will our survival. Naturally, most people, who have what they would term an ‘optimistic view' of the future, shun such thinking, dismissing it as pessimism entertained by the ‘lunatic fringe'. Read full article... Read full article...
Friday, April 25, 2008
Government Bailouts Weapons of Mass Inflation / Economics / Inflation
By: Adrian_Ash
"...Dark secrets known only to top-level officials; the public good trumping public disclosure; urgent action needed to avert disaster – haven't we been here before...?"
IN THE EMERGING economies of East Asia , governments face fresh rioting if food prices keep soaring.
Read full article... Read full article...
Wednesday, April 16, 2008
US Actual Inflation Trend Heading for Stagflation or Deflation? / Economics / Inflation
By: Jas_Jain
Inflationists have been crying wolf for the past three plus years despite the fact that the annualized headline CPI, including food and energy, and not seasonally adjusted, for 12M, 6M, and 3M has fluctuated around the 20-year trend of 3%+- (yes, the annualized inflation in the US for the past 20 years is 3.08%). As a matter of fact, despite huge run up in crude oil and agriculturals during the past year the CPI rates in the graph are below their highs during 2005-07. Labor costs are by far the most dominant contributor to the CPI. Read full article... Read full article...
Wednesday, April 16, 2008
40 Years of Real Interest Rates and, 80 Years of Dow/Gold Ratio / Economics / Inflation
By: Adrian_Ash
"...The infamous Dow/Gold Ratio just touched its long-run historic average. So which way next amid the Fed's inflationary melt-up...?"
IF WALL STREET STOCKS can surge 160 points on falling earnings, an 11% drop in housing starts, and a 16-year record for consumer-price inflation, then so can everything else that doesn't carry a picture of George Washington.
Read full article... Read full article...
Tuesday, April 15, 2008
Rising Inflation Pushes Commodity Prices Higher / Commodities / Inflation
By: George_Kleinman
Last week, the Federal Reserve released the minutes from its March 18 Federal Open Market Committee (FOMC) meeting. At that meeting, the Fed cut the fed funds rate by 75 basis points to the current level of 2.25 percent. The FOMC's post-meeting statement said, “Downside risks to growth remain. [The] outlook for economic activity has weakened further.” Read full article... Read full article...
Saturday, April 12, 2008
The Great TV Price Inflation Scam / Economics / Inflation
By: Tim_Iacono
Anyone wanting to better understand one of the primary reasons why we are in such an economic mess these days need look no further than the history of television prices over the last half-decade or more.
Actually there are two versions of TV prices - the real world "in"-flation experience and the government's "de"-flation version.
Read full article... Read full article...
Saturday, April 05, 2008
Inflationary Losers in the Great Solvency Slump / Economics / Inflation
By: Adrian_Ash
"...Counting the winners and losers of the Great Solvency Slump so far – and guessing at the big winners to come..."
YOU DON'T HAVE TO be a rabid libertarian or Marxist historian with leather patches on his jacket to look at the current world banking crisis and ask " Cui bono...?"
Read full article... Read full article...
Thursday, April 03, 2008
Where's the “Protection” in Treasury-Inflation Protected Securities (TIPS) / Interest-Rates / Inflation
By: Michael_Pento
Every investment product on planet earth is designed to at least offer a chance at a positive, real after-tax return. Put another way, all investments are designed to bring you a return that is greater than the rate of inflation. Some offer a higher stated yield because of their inherent risk, while others display smaller yields due to their perceived relative safety. But all true investments are designed to outpace inflation.Read full article... Read full article...
Tuesday, April 01, 2008
Inflation, Gold and the Government / Economics / Inflation
By: David_Petch
Inflation as defined by Ludwig von Mises, “Inflation is defined as monetary expansion through introduction of physical fiat currency or issuance of credit”.
Printing money has a delayed effect to hit the system; it will be circulating in the system and travel through a series of bubbles. The end game for inflationary cycles results from excessive money chasing commodities. The phenomenon of inverse relationships between bull markets in broad market indices and commodities is well known…commodity prices decline to such low levels that supplies become critical, thereby driving up prices. An example of delays in pricing hitting the consumer lies in examination of Producers Pricing Index (PPI) and the Consumers Pricing Index (CCI).
Read full article... Read full article...
Wednesday, March 19, 2008
UK Inflation CPI Rises to 2.5% for 2009 UK Election? / Economics / Inflation
By: Nadeem_Walayat
UK Inflation as measured by the CPI Index rose to 2.5% for February, however the rise was wholly due to a change in the way the index is calculated without which the CPI would probably have remained unchanged. The more accepted RPI inflation index remained unchanged at 4.1%. Therefore the artificial boost to the CPI suggests the intention for the creation of a spike in UK CPI inflation now which will leave the indices in 12 months time, thus resulting in a drop in CPI inflation and hence have the prospects for interest rate cuts in the lead up to the summer of 2009, which could present Gordon Brown with an ideal opportunity to go to the polls.Read full article... Read full article...
Friday, March 14, 2008
US CPI Inflation Falls to 4%- Flashes Deflation Warning to Commodity Bulls Towards 2008 End / Economics / Inflation
By: Nadeem_Walayat
US CPI Inflation came in flat for February, confounding consensus forecasts that called for a rise of 0.2%. Annualised CPI falls to 4% from 4.3% and is inline with my overall expectations as highlighted in the extensive article of 2nd March 08 - Credit Crisis Morphs Into Stagflation- Protect Your Wealth! Which concluded that deflationary forces would take hold towards the end of 2008 as illustrated by the graph below -Read full article... Read full article...
Thursday, March 06, 2008
Devaluation of Your Savings - When Cash is Trash, Part II / Personal_Finance / Inflation
By: Money_and_Markets
When I wrote Part I of "When Cash is Trash" just three months ago — colleagues, investors, even friends and family told me I was nuts. "How can you go wrong with keeping most of your money safe in cash?" they asked.
"Safe?" I replied. "Give me a break!" Cash is like any other investment — its value goes up and down relative to other assets. Back then I said the current environment made cash just about the worst investment to hold on to. And, today, I still believe that.
Read full article... Read full article...
Friday, February 29, 2008
Loss of Confidence in the US Fed / Interest-Rates / Inflation
By: Peter_Schiff
Hear Me Now - Believe Me Later - Having neither the will nor the means to confront our major economic challenges, Washington is instead hanging its hopes on words alone. This week, despite the clearest signs yet that the dollar is in critical condition, President Bush and Treasury Secretary Paulson tried to provide reassurance by once again invoking the name of the mythical “strong dollar policy”. Meanwhile across town, with the latest crop of inflation figures pointing to the greatest price surges in a generation, Fed Chairman Ben Bernanke tried to do the Administration one better by insisting that inflation expectations remained “well anchored”, and that stagflation was nowhere in sight. Read full article... Read full article...
Tuesday, February 26, 2008
How to Grow Your Investments in an Inflationary Environment / Economics / Inflation
By: Money_and_Markets
Tony Sagami writes: I got my first taste of inflation in 1973, shortly after I got my driver's license.
Gasoline was 25 cents a gallon when I first started driving, and I was busy enjoying the freedom and independence that an automobile gives a teenage boy.
Read full article... Read full article...
Friday, February 22, 2008
Fed Interest Rate Cuts have Resulted in Surging Commodity Price Inflation / Interest-Rates / Inflation
By: Adrian_Ash
Six Months of Fun, Fun, Fun from the Fed - "...If Bernanke was expecting a 13% rise on Wall Street, he's got a 45% rise in gold instead – plus a real disaster in US Treasury bond yields..."
THIS WEEK marked the six-month anniversary of the Fed's first cut to US interest rates during the current world banking crisis.
Read full article... Read full article...
Friday, February 22, 2008
Inflation- The Elephant in the Room / Economics / Inflation
By: Money_and_Markets
"The elephant in the room" ... I love that expression. After all, my two little girls enjoy watching the elephants at Lion Country Safari, and they'd love to see 'em show up in the living room.
But right now, the real five-ton elephant in the room is inflation. And no one at the Federal Reserve really seems to want to confront it!
Read full article... Read full article...
Thursday, February 21, 2008
US Imports Inflation From China - Use Agri-Foods to Protect Your Wealth! / Economics / Inflation
By: Ned_W_Schmidt
Waving a magic wand and making speeches does not prevent reality from creeping into statistics. Per the FRB-Cleveland, the U.S. inflation trend is as shown in the following table.Read full article... Read full article...
Saturday, February 09, 2008
US Recession WIll Kill Inflation - Lies to Destroy the Value of Your Money / Economics / Inflation
By: Adrian_Ash
"...The US recession is sure to send inflation to zero – just like it didn't in four of the last five recessions..."
WORRIED ABOUT INFLATION...? Oh stop your carping and set an extra place at dinner for the fast-looming recession instead.
Read full article... Read full article...
Wednesday, February 06, 2008
Reasons Why the US Bond Market is Wrong on Inflation / Interest-Rates / Inflation
By: Michael_Pento
There is no shortage of market gurus on Wall St. who will tell you that inflation is low. The main evidence for their argument stems from the relatively low rates on Treasury bond yields and the narrow spreads on inflation protection securities know as TIPS. Whereas I believe the currently low yields on Treasury debt to be explainable, it is very dangerous to draw the wrong conclusion about inflation from bonds' elevated prices. Read full article... Read full article...
Thursday, January 31, 2008
US Housing Market's a Mess, But Don't Fight the Fed's Determination to Re-flate Asset Prices / Housing-Market / Inflation
By: Michael_Pento
It has been two years since the bursting of the housing bubble began, but we can still hear a plethora of lunacy spewed from market pundits regarding the future of this key part of the economy. After hearing that home prices would never decline, we now hear that real estate is a very small part of our economy. Last week, Mike Norman, of the Economic Contrarian Update, was part of a panel debating the future of the economy and housing and he said that inventory of unsold homes would soon fall dramatically.Read full article... Read full article...
Tuesday, January 15, 2008
The Bush $100 Billion Hyper-Inflationary Stimulus Package / Economics / Inflation
By: Mike_Whitney
In the next couple of weeks, George Bush will prove that the last 30 years of supply side, free market economics was nothing more than a overripe pile of horse manure. In fact, right now, the B-52s are being loaded with pallets-full of freshly-minted hundred dollar bills which will be air-dropped “from sea to shining sea” as soon as King George gives the nod.Read full article... Read full article...
Thursday, January 10, 2008
Central Banks Facing Stagflation - Bullish Gold, Currencies and Crude Oil / Economics / Inflation
By: Christopher_Laird
One of the main reasons gold is rising so much now is because central banks are facing stagflationary forces. Stagflation is a combination of economic stagnation with inflation. Central banks find it hard to lower interest rates because of inflation, and economic stagnation causes them to want to lower interest rates. This is very gold and oil bullish.
Many of the causes of gold's rise in the late 70's and 1980 are with us today. But let's first define stagflation:
Read full article... Read full article...
Saturday, January 05, 2008
BIG BEN - US Fed Inflation Slight of Hand / Economics / Inflation
By: David_Petch
Big Ben is the largest standing four faced chiming clock in the world and is known for its remarkable accuracy due in part to Edmond Beckett Denison who invented the double three-legged gravity escapement added to the original mechanism. The mechanism was created in advance of completing the masonry and final tower assembly, which is where Edmond found spare time for his improvement. Read full article... Read full article...
Thursday, December 20, 2007
Global Inflation Surge Fueled by Explosive Money Supply Growth / Economics / Inflation
By: Gary_Dorsch
The worst is yet to come for the global banking system, which faces potential losses of more than half-trillion dollars from investments in toxic sub-prime US mortgage debt. “The problems in the financial sector remain with us,” said Bank of England chief Mervyn King on Nov 19 th . “A painful adjustment faces the global banking sector over the next few months as losses are revealed and new capital is raised to repair bank balance sheets,” he said.
To defuse the crisis, the Fed, the European Central Bank, and the Bank of England are pumping enormous sums of money into the banking system, at below market interest rates, to prevent a “credit crunch” from triggering a global stock market meltdown. “Central banks are working together to forestall any sharp tightening in credit conditions that might lead to a downturn around the world,” King declared.
Read full article... Read full article...
Thursday, December 20, 2007
Public Losing Confidence in Official Inflation Statistics - Inflation Brainwashing Starting to Backfire / Economics / Inflation
By: Money_and_Markets
Larry Edelson writes:On at least three occasions over the last couple of years I warned you that inflation was already running at about 7%-10%.
It was a no-brainer. Like you, I experienced rising prices every time I went to the gas pump ... to the grocery store ... paid an insurance bill ... wrote a check for my kids' college tuition ... or bought new clothes.
Read full article... Read full article...
Wednesday, December 19, 2007
US CPI Inflation Statistics Manipulation and Deception? / Economics / Inflation
By: Ronald_R_Cooke
CPI: Sophisticated Economic Theory, Terrible Ethics
Is Institutional Deception Embedded In Public Policy?
Introduction
In late November, 2007, the Commerce Department’s Bureau of Economic Analysis (BEA) announced the United States had achieved a third quarter real Gross Domestic Product (GDP) gain of 4.9 percent. The price index for gross domestic purchases, which (theoretically) measures prices paid by U.S. residents, increased 1.6 percent in the third quarter.
Tuesday, December 18, 2007
UK November Inflation Drifts Higher - CPI 2.1%, RPI 4.3% / Economics / Inflation
By: Nadeem_Walayat
Figures for November show that inflation remained steady in terms of the CPI at 2.1%, whilst the more widely recognised RPI measure rose to 4.3% from 4.2% last month. The ONS sited rising food prices offset by falling gas and electricity prices.The movements are inline with the Market Oracle forecast for inflation to drift higher into a January 2008 peak.Read full article... Read full article...
Tuesday, December 18, 2007
US Inflation Soars - Largest Rise in Producer Prices Since 1973! / Economics / Inflation
By: Money_and_Markets
Martin Weiss writes: Suddenly and without warning, price inflation — long ignored and forever understated — has burst onto the American scene with the force of a cat-5 hurricane.
The November jump in the U.S. Producer Price Index has exceeded the largest single-month rises of the Bush 2000s ... the Clinton '90s ... the Reagan '80s ... and even the Carter '70s. It's the worst bout of wholesale price inflation since the aftermath of the 1973 Arab oil embargo.
Read full article... Read full article...
Monday, December 17, 2007
Hyper-inflationary Paper Promises Poised On Precarious Perch / Stock-Markets / Inflation
By: Captain_Hook
Whether it be due to a global currency crisis , it's effects , or because worse is yet to come , no matter, the ever-growing hyperinflationary mountain of paper promises is precariously perched on the edge of a precipice ready to fall, and in doing so; such an event would accelerate the end of the US Dollar ($) empire, along with its dominance in world affairs and trade . And no amount of fairy tales or interventions will be able to halt the $'s slide from prominence – nothing. This is becoming more evident in the fact the credit crisis is now spreading to Asia , where the stock markets have become destabilized. Read full article... Read full article...
Saturday, December 15, 2007
Sharp Rise in US CPI Inflation as Energy Prices Surged during November / Economics / Inflation
By: Tim_Iacono
The Labor Department reported sharply higher inflation in November as consumer prices rose 0.8 percent, the steepest increase in 26 months. From year-ago levels, inflation was a full 4.3 percent higher, the worst year-over-year reading since Hurricane Katrina.Read full article... Read full article...
Wednesday, November 28, 2007
Western Economies Hit by Dual Shocks of Rising Commodity Prices and Financial Market Credit Crisis / Interest-Rates / Inflation
By: Adrian_Ash
"...You can either bail out the big banks with a flood of cheap money, or you can keep a lid on inflation. You can't do both, not according to history. And sometimes – like now – you'll be hard put to achieve either..."
"THE ECONOMY has been hit by two shocks," said Andrew Sentance, a Bank of England policymaker, in a speech on Tuesday night.
Read full article... Read full article...
Monday, November 26, 2007
UK Inflation Forecast 2008 (RPI and CPI) / Economics / Inflation
By: Nadeem_Walayat
The recent up tick in UK inflation has sparked inflation concerns to continue going into 2008. However the Market Oracle anticipated the recent up tick as a consequence of money supply growth earlier in the year as an indicator of future inflation and that the up tick would prove temporary as many factors converge towards deflationary pressures during 2008 that will allow the Bank of England to start cutting UK interest rates towards a target of 5% before the decline in UK inflation starts and for UK inflation to subsequently fall towards the Market Oracle targets of 3% RPI and 1.8% CPI towards the end of 2008.
The following analysis presents some of the key factors that will result in the fall in UK Inflation during 2008.
Read full article... Read full article...
Saturday, November 17, 2007
Real US Inflation is 6% Not 2% Implying Stagflation / Economics / Inflation
By: John_Mauldin
In this issue:
- How do You Spell Stagflation?
- Cooking the Inflation Books
- Gaming the Producer Price Index
- Consumer Spending is Up, but then Again, It May Be Down
- A Two Dimensional Problem
- Saudi Justice
- New York, Toronto, Europe and Thanksgiving
This week we look at inflation. Is it just over 2%, giving the Fed room to cut rates, or will it be closer to 4% by the next FOMC meeting, making a rate cut problematic? How do they get those numbers? When and how can two opposite things be true at the same time? The answer depends on how many dimensions you are living in when you are asking the question. The Fed is going to be faced with a very difficult decision at its next meeting, and there results of there deliberations will be felt by you.
Read full article... Read full article...
Wednesday, November 14, 2007
Inflation Expectations Are Expected To Soar During 2008 / Economics / Inflation
By: Jordan_Roy_Byrne
It has been over month since my last editorial, “2008-2009: Rising Inflation Expectations Amidst an Inflationary Storm.” Since then commodities have continued to soar while the stock market has struggled in the wake of the ongoing credit crisis. It now appears that a decoupling between commodities and stocks is starting to take place. Such a decoupling is a catalyst for rising inflation expectations. Read full article... Read full article...
Tuesday, November 13, 2007
NOLTE NOTES A Volatile Period As Stock Markets Nosedive in the face of Stagflation / Stock-Markets / Inflation
By: Paul_J_Nolte
Ok, so the stock slump we have been looking for was more along the lines of a cliff dive. Worries over the dollar, oil, sub-prime write-offs and the housing markets all conspired last week to push markets down over 4% for the week. Global warming hurt the retail industry, as consumers stayed away from buying their winter garb just yet. We're still confused as to what constitutes “good” weather for shopping. The government's official stats will be released this week and should show retail sales slowed significantly from September's pace.Read full article... Read full article...
Monday, November 12, 2007
US Dollar Devaluation Signals Risk Of Accelerating Global Hyperinflation / Economics / Inflation
By: Captain_Hook
Soon, the falling US Dollar ($) will reach a point of maximum pain, where trading partners will be forced to print enough currency to absorb accelerating quantities of $'s or have their currencies soar further against American fiat. Known by many as the ‘race to zero' all fiat currency systems undergo in their latter stages, and based on the observation the $ has now signaled it's in crash mode, one should expect this process to accelerate as essentially what is occurring is US debt holders are being bailed out. What's happening is the market knows they can't pay, and therefore the need to inflate debts away has now gripped macro-conditions. So, Americans are being pampered right now because they are still viewed as ‘key' in global consumption trends, but make no mistake about it, with the exception of newfound wealth in emerging markets, US trading partners are also seeing the consequences of unmanageable debt burdens, which will foster the need for competitive currency devaluations as process unfolds in coming months and years. This is what a parabolic gold price is signaling, the need for speed in currency debasement protocol on a global basis, or as is commonly referred to, ‘competitive devaluations'. Read full article... Read full article...
Thursday, November 08, 2007
Ben Bernanke Gets a Lesson on Inflation From Ron Paul / Politics / Inflation
By: Mario_Innecco
Representative and Republican Presidential candidate Ron Paul questioning Federal Reserve Board chairman Ben Bernanke about the debasement of the dollar at the JEC in Congress on November 8th, 2007 Read full article... Read full article...
Sunday, November 04, 2007
US Fed Ignoring the Real World Inflation Data - Bernanke Should Take a Hike! / Economics / Inflation
By: Money_and_Markets
Jack Crooks writes: The slumping housing market and the ongoing credit crunch have been a major thorn-in-the-side for the U.S. economy for many months, and conditions are likely to get worse before they get better.
However, does the big picture for the rest of the economy really look as bad as analysts and economists have made it appear?
Read full article... Read full article...
Sunday, November 04, 2007
Only Central Banks Can Create Inflation / Economics / Inflation
By: Mario_Innecco
We think the way inflation is presently defined goes a long way to helping central banks and governments perpetuate the debasement of currencies via the over issuance thereof. Prior to the 1980's The Merriam-Webster Dictionary defined inflation as: “an abnormal increase in the volume of money and credit resulting in a substantial and continuing rise in the general price level”.Read full article... Read full article...
Friday, November 02, 2007
America's Greatest Export - Inflation in Spades / Economics / Inflation
By: Greg_Silberman
Oh the absurdity of it all! The last round of Fed rate hikes began early 2004 and ended in the middle of 2006. One of the primary justifications for a number of mini-rate hikes was the ominous threat of an outbreak in price inflation.
Read full article... Read full article...
Thursday, November 01, 2007
US Manipulation of Inflation Economic Statistics to Produce Strong GDP Growth Figures / Economics / Inflation
By: Peter_Schiff
Yesterday, as the dollar fell to new record lows and oil and gold prices surged to new highs, Wall Street remained fixated on wholly meaningless government data that managed to report the lowest inflation in the last half century. These bizarre numbers were integral in allowing the Commerce Department to report 3.9% annualized GDP growth in the third quarter, which was heralded by the bulls as evidence that a resilient U.S. economy had shrugged off the problems in the housing and mortgage markets. However, the government's ability to make “economic growth” magically appear is based purely on statistical finesse. Read full article... Read full article...
Friday, October 26, 2007
Market Barotrauma - Disconnect From the Reality of the Business Cycle / Economics / Inflation
By: Brian_Bloom
There has been a disconnect in logic which has been seriously bothering me in recent weeks. Everything in my training has taught me that ‘the market' ultimately exerts a discipline on speculative excess, and ‘the market', being the sum of all players, is more powerful than any one player or set of players. Conceptually, therefore, whilst the Central Banks might ‘manage' the markets, the very idea of their being able to eliminate the business cycle has always struck me as being a nonsense. The longer the contraction phase of a business cycle is postponed, the worse will be the excesses that build up, and the more painful will be the rectifying contraction phase. Read full article... Read full article...
Thursday, October 25, 2007
Major Turning Point Occurring Now! / Stock-Markets / Inflation
By: Money_and_Markets
Larry Edelson writes: Years from now, we'll look back at this current period in time as a major turning point … when the fires of global inflation were ignited anew … when the world began to realize the dollar was worth no more than the paper it was printed on … and when central bankers became truly known as emperors with no clothes.
You're already seeing it begin, with the U.S. dollar plunging to all-time record lows against nearly all the world's major currencies, and even against dozens of third-world currencies.
Read full article... Read full article...
Saturday, October 20, 2007
Historic and Current Hyperinflation From Across the Globe / Economics / Inflation
By: Mike_Hewitt
Angola (1991-1999) Angola went through the worst inflation from 1991 to 1995. In early 1991, the highest denomination was 50,000 kwanzas . By 1994, it was 500,000 kwanzas . In the 1995 currency reform, 1 kwanza reajustado was exchanged for 1,000 kwanzas . The highest denomination in 1995 was 5,000,000 kwanzas reajustados . In the 1999 currency reform, 1 new kwanza was exchanged for 1,000,000 kwanzas reajustados . The overall impact of hyperinflation: 1 new kwanza = 1,000,000,000 pre-1991 kwanzas .
Read full article... Read full article...
Friday, October 19, 2007
US Inflation Understated in Official Statistics - Prices are the Cart, Money Supply is the Horse / Economics / Inflation
By: Peter_Schiff
The sad truth is that despite the best efforts of monetary economists everywhere, fundamental misconceptions about inflation remain entrenched in government, business, and the media.
In an exchange earlier this week on CNBC, a guest explained that rising oil prices can not cause inflation because prices for other goods must fall as spending is diverted to pay for more expensive oil. That explanation prompted host Becky Quick to ask: “If rising oil prices do not cause inflation, then what does?” Since that question was left unanswered on the air, I thought I would take the time to answer it here.
Read full article... Read full article...
Tuesday, October 16, 2007
UK Inflation CPI Remains Steady at 1.8% / Economics / Inflation
By: Nadeem_Walayat
UK inflation for September as measured by the governments preferred measure the Consumer Price Index remained steady at 1.8%. The more widely recognised measure of inflation RPI, fell to 3.9%.Read full article... Read full article...
Friday, October 12, 2007
Red Hot Inflation Now Baked in the Crust As Investors Pile Into Commodities / Commodities / Inflation
By: Adrian_Ash
"...Wall Street and the City are suddenly piling into the commodity markets. Expect a side-order of '70s style inflation to hit your dinner table as a result..."
DIG OUT YOUR BELL-BOTTOMS and dust off your Doobie Brothers albums! This is where inflation stops hiding behind the official CPI data...and starts eating your cash savings and income alive.
Read full article... Read full article...
Friday, October 12, 2007
Consumer Price Inflation Has Finally Arrived and Gold Will Have Its Day In the Sun Yet / Commodities / Inflation
By: Greg_Silberman
Not a day goes by without another financial institution getting bailed out.Let's see, we have Countrywide Financial, German IKB and now the UK based Northern Rock.
Read full article... Read full article...
Friday, October 05, 2007
Inflation and the Federal Reserve / Economics / Inflation
By: Richard_C_Cook
No term in the “dismal science” of economics is more misunderstood than “inflation.” The word means “rising prices,” but is used at different times by different people to describe totally different phenomena.
The most predominant type of inflation is natural and occurs as raw materials are used up and must be replenished. It's akin to the law of diminishing returns, or entropy, and is overcome by technological innovation. Another type of inflation is expressed through constantly changing conditions of supply and demand, including the fluctuating cost of labor. Yet another type results from the predatory pricing practices of monopolies such as the worldwide oil cartel which has jacked up the cost of petroleum to over $80 a barrel.
Read full article... Read full article...
Thursday, October 04, 2007
Central Banks Inflation Quandary As Gold Prices in More US Interest Rate Cuts / Interest-Rates / Inflation
By: Christopher_Laird
When the Fed cut the discount and target rates by .5% they tied the hands of some other central banks who have been wanting to raise rates. From China, to the Middle East, to the EU and then Japan, each has reacted in its own way as they find they have to take into serious consideration what the Fed does. Read full article... Read full article...
Wednesday, October 03, 2007
Rising Inflation Expectations Amidst An Inflationary Storm :2008-2009 / Economics / Inflation
By: Jordan_Roy_Byrne
The average person isn't concerned yet about inflation. They have witnessed and experienced rising costs in food, energy, healthcare and tuition while the government and media consistently proclaim inflation to be low and well contained. Do these people have an ounce of decency? The roots of their corrupt and deceitful behavior can be traced back to a fiat monetary system that operates on debt and inflation, which is a form of counterfeiting. Joe Sixpack knows all this isn't right. But he doesn't know the true cause of rising prices in everyday living expenses, nor does he believe things are unmanageable. At least not yet. To date the Fed has succeeded in obfuscating inflation to the public. They have kept inflation expectations low enough. Though once the public wises up, their confidence game is lost. Read full article... Read full article...
Friday, September 28, 2007
Stagflation Revisited - Economic Contraction and High Inflation / Economics / Inflation
By: Peter_Schiff
Currently, Wall Street is divided into two camps: those who feel the Fed should fight recession, and those who feel it should fight inflation. The former feel that a recession can only be avoided if the Fed rescues the economy from the imploding housing market. To these analysts, inflation is not a problem as it will be contained by slower growth. The other camp maintains that the housing slowdown is not significant enough to derail the otherwise healthy U.S. economy, and should therefore not distract the Fed from its primary mission of fighting inflation. As usual on Wall Street, both camps have it wrong. Read full article... Read full article...
Friday, September 21, 2007
Feds Interest Rate Cut to Ignite Inflation As Dollar Collapses - The Worst Fed Move in History! / Interest-Rates / Inflation
By: Peter_Schiff
Helicopter Ben Earns His Wings: Coming at a time when rate increases were needed to combat the sinking dollar and surging gold, oil and other commodity prices, Ben Bernanke’s 50 basis point cuts in the Fed funds and discount rates this week may go down as the most irresponsible move in Fed history.Read full article... Read full article...
Friday, September 21, 2007
Hyperinflation or Recession? / Economics / Inflation
By: Brian_Bloom
Zimbabwe is a country where hyperinflation is a reality as opposed to a theoretical possibility. The photograph below shows what it looks like to pay for lunch for eight people in that country. It was sent to me in an email dated September 18 th , 2007 . The meal – consisting of fillet steaks and beers – cost six million Zimbabwean dollars. What you are looking at is that amount of money in $1,000 notes being collected by the restaurant manager. I don't know if it included a Z$600,000 tip or not. The restaurant has no menu. Patrons wanting to eat are not offered a choice. They ask “what's left?” Still, they are able to smile. Such is the indomitability of the human spirit. Read full article... Read full article...
Thursday, September 20, 2007
Inflate, Inflate, Inflate, Stagflation! / Economics / Inflation
By: Money_and_Markets
Larry Edelson writes : What concerns me most today is not the mortgage meltdown in the U.S. That's because it's not the cause of our country's economic problems. Rather, the mortgage meltdown and credit market panic are just symptoms of a much deeper, underlying disease.
That disease is the fiscal and monetary fiasco I have been warning you about for the last several years. Specifically, I'm talking about Washington's reckless spending. The government is racking up public debts like there's no tomorrow!
Read full article... Read full article...
Thursday, September 20, 2007
Beware - The Bernanke Fed Could Ignite Hyper-Inflation! Money Supply Surging, Dollar Plunging / Economics / Inflation
By: Gary_Dorsch
“You unlock this door with the key of imagination. Beyond it is another dimension, a dimension of sound, a dimension of sight, a dimension of mind. You're moving into a land of both shadow and substance, of things and ideas. It's a journey into a wondrous land, whose boundaries are that of imagination. That's a signpost up ahead, your next stop, the “Twilight Zone!” Rod Serling was a multi-talented man and a prolific writer. His television series “The Twilight Zone” ran for five seasons in the early 1960's and was extraordinary, winning three Emmy Awards. As the host and narrator, and writer of more than half of 151 episodes, he became an American household name and his voice always sounded a creepy reminder of a world beyond our control.
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Monday, September 10, 2007
Inflation Surge Expected As Food Costs Continue to Soar / Economics / Inflation
By: Adrian_Ash
"...The average weekly shopping bill is set to rise by 30% between now and Christmas in the United Kingdom ..."
ADAM LEYLAND, editor of The Grocer – the food & drink industry's favorite weekly reading here in the United Kingdom – says the cost of the average Briton's weekly shopping bill could rise 30% by December.
Thirty per cent? By Christmas?
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Thursday, September 06, 2007
Your Wealth Is Being Confiscated Through Inflation / Economics / Inflation
By: Money_and_Markets
Larry Edelson writes: I'd like to start this issue by quoting three great authors. Although they were from very different walks of life, they shared an understanding of exactly what the global economy is going through today, especially the events here in the U.S. …Read full article... Read full article...
Monday, August 27, 2007
US Dollar RIP / Economics / Inflation
By: Adrian_Ash
"...The call for more money to fix the financial markets comes just as global inflation is beginning to cause real mischief..."
EVEN IN DEATH, it seems, you're no longer safe from the iniquities of inflation.
Read full article... Read full article...
Wednesday, August 15, 2007
GOLD THOUGHTS - Federal Reserves Flawed Monetary Policy / Interest-Rates / Inflation
By: Ned_W_Schmidt
Complete and total intellectual bankruptcy of Federal Reserve was confirmed this past week. Creation and collapse of two financial bubbles in eight years would seem to suggest monetary philosophy of Federal Reserve is fatally flawed. Core rate of inflation as a tool for managing monetary policy should be declared dead, and buried in history books of foolish thinking.Read full article... Read full article...
Tuesday, August 14, 2007
Can China's Central Bank Wait Until August 25, 2008 to Rein In Inflation? / Economics / Inflation
By: Paul_L_Kasriel
The Chinese government reported today that Chinese consumer inflation in July reached 5.6% on a year-over-year basis - its highest rate since February 1997. As the chart below shows, Chinese consumer inflation has been trending higher throughout 2007. The People's Bank of China (PBOC) and the Chinese central government has implemented a series of measures this year in an attempt to rein in consumer price as well as asset price inflation.
Read full article... Read full article...
Friday, July 20, 2007
Central Bankers - Stop! Or the Economy Gets It / Economics / Inflation
By: Adrian_Ash
"...If only consumers hadn't taken the world's central bankers at their word..."
WE ONLY have ourselves to blame. Consumers in the West, rich in credit ratings if not cash, shouldn't have borrowed and spent so much money when interest rates hit a half-a-century low in 2003.
Nor should we have continued to borrow and spend when the rate of interest slipped below the inflation rate – making debt pay as cash savings lost value – over the next two years.
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Tuesday, July 10, 2007
Explaining the US Consumer Price Index / Economics / Inflation
By: John_Mauldin
This week in Outside the Box we look at a Congressional Budget Office publication that dives us the details on how the consumer price index for all urban consumers (CPI-U) is created. This is, as the CBO posits, the best-known official measure of inflation.The brief that follows will venture to explain the methods used to construct the CPI-U, and how and why the index's estimates of inflation might differ from a consumer's perceptions of price changes. Though I think this article may be somewhat akin to discovering what components comprise the makeup of sausages (knowledge that is usually best left undiscovered), it is useful to understand just how the inflation data is constructed. Some of the points they make are controversial, especially when it comes to "hedonic" pricing, which they refer to as "shifts in the quality of goods and services over time." This does allow for some quite subjective influence in the inflation numbers. While I will visit this topic in a later letter, it is good to know what is and is not being measured.
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Wednesday, July 04, 2007
UK Government is Still Underestimating Inflation According to Fool.co.uk's Inflation Index / Personal_Finance / Inflation
By: Fool.co.uk
Despite two interest rate hikes this year to curb the cost of living, Fool.co.uk readers say official inflation figures are still wide of the mark (1).
- Consumers say the true rate of inflation is 7.3% not 2.5%
- Inflation is lower for men than women
- Older people are worst affected by inflation
- Scotland experiences the lowest rate of inflation
- Northern Ireland experiences the highest rate of inflation
Monday, July 02, 2007
ECB Educational Inflation Video is Propaganda with a Capital ‘P' / InvestorEducation / Inflation
By: Mike_Hewitt
The European Central Bank (ECB) has a “educational” video on Price Stability. The video is intended to be a teachers' aid. It, and associated teacher aid materials, can be downloaded from the ECB website here . For quicker viewing, the video can also be seen on YouTube.Read full article... Read full article...
Thursday, June 21, 2007
Inflation Statistics - The Biggest Hoax of All Time! / Economics / Inflation
By: Money_and_Markets
Larry Edelson writes: I am thoroughly convinced that they're smoking something in Washington. After all, the pundits by the Potomac keep dishing out these absurdly low inflation figures, thinking you're too dumb to realize they're full of it!
Case in point: Last Friday's Consumer Price Index (CPI) data. The so-called "core" inflation rate rose a modest 0.1%. So every politician on the Hill plus all the idiot Wall Street analysts grabbed onto that figure and proclaimed inflation "dead."
Inflation? "Not a problem" … "tame" … "easy to deal with" — those were some of the comments and headlines that came out after the figure was released.
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Saturday, June 16, 2007
Interest Rates and Global Growth / Interest-Rates / Inflation
By: Hans_Wagner
If investors want to beat the market, they need to understand how global growth is affecting interest rates and inflation. Bill Gross of Pimco Bonds, the world's largest bond management firm, stated in his most recent investment outlook that “With the possibility of creeping inflationary tendencies, especially in weak currency countries including the U.S., combined with the potential reduction of financial flow subsidies which to this point have favored fixed income vs. equity and real commodity investments, we come to the following range forecasts for the secular timeframe from 2007 to 2011.”Read full article... Read full article...
Saturday, June 16, 2007
May CPI: Still Scant Evidence of Food/Energy Price Surge Pass-Through / Economics / Inflation
By: Paul_L_Kasriel
If this headline looks familiar, it is because yesterday's commentary had almost the same headline, save for "PPI" instead of "CPI." (Speaking of yesterday's commentary, I inadvertently omitted a chart, which no one called to my attention. Hmm, perhaps no one other than me read it!) As the table below indicates, headline CPI inflation has accelerated, primarily because of spiking energy prices. But excluding energy and food prices, the so-called core rate of CPI inflation is moderating (see Chart 1). On a year-over-year basis, the previous peak in all-items CPI inflation occurred way back in September 2005 at 4.7% -- a full 200 basis point over its current rate.Read full article... Read full article...
Friday, June 15, 2007
Inflation Invasion / Economics / Inflation
By: Andy_Sutton
Imagine this for a scene: It is that fateful night and you are on the Titanic. You have just witnessed a collision with a massive iceberg and can hear the water rushing into the 'waterproof' compartments. The Captain comes to the railing and begins telling the passengers in a very monotonous, soothing, familiar pentameter that everything is fine. You look up and there stands...Ben Bernanke??Read full article... Read full article...
Friday, June 15, 2007
May PPI: Still Scant Evidence of Food/Energy Price Surge Pass-Through / Economics / Inflation
By: Paul_L_Kasriel
Just like every headline economic statistic of late, the Finished-Goods All-Items PPI increased a greater-than-expected 0.9% in May after a 0.7% rise in April. As the table below shows, another sharp rise in energy prices dominated the increase in finished-goods prices. After six consecutive monthly increases, finished-food prices declined marginally.Read full article... Read full article...
Tuesday, June 12, 2007
UK CPI Inflation rate falls but RPI will ensure further rise in UK Interest Rates / Economics / Inflation
By: Nadeem_Walayat
UK inflation as measured by the Bank of England's preferred measure, the Consumer Price Index (CPI) fell to 2.5% for May 07, from 2.8% for April 07. The rate of 2.5% is still above the banks target rate of 2%. The more widely recognised measure of UK inflation, the RPI fell to 4.3% from 4.5%, and is significantly above its original target of 3% which was abandoned in favour of the CPI measure, as clearly the CPI is more easily managed or manipulated than the RPI which shows a more significant continuing failure of the Bank to control UK Inflation.Read full article... Read full article...
Tuesday, June 12, 2007
Boo! Spot the Shocker in UK Inflation / Economics / Inflation
By: Adrian_Ash
"...When this bull market in 'luck' runs out, shorting the Pound might prove a wise course instead of buying fixed-income gilts..."
GOOD NEWS for lucky cash-savers in Britain . The Pound in their pocket lost only one-third of a penny in purchasing power during May 2007.
Okay, so it dropped 2.5p from a year earlier – and £1 spent on the High Street will buy 15% less than it commanded in spring 1997.
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Thursday, June 07, 2007
Inflation, Inflation, Inflation! / Economics / Inflation
By: David_Vaughn
Are you feeling sorry for gold lately? Fraid it doesn't need your sorrow with its present price action. As I have said before and will say again gold will do what gold wishes to do.
Thursday, May 31, 2007
Confiscation of Wealth Through Inflation / Economics / Inflation
By: Mike_Hewitt
“ By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens .” (John Maynard Keynes, chief architect of our present-day fiat money system)
The Mission Statement of the Federal Reserve as stated on their website is to “… to provide the nation with a safer, more flexible, and more stable monetary and financial system.”
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Tuesday, May 29, 2007
Nolte Notes - Inflationary Growth / Economics / Inflation
By: Paul_J_Nolte
Let's be perfectly honest – economists are a geeky bunch. In what may be their own super Friday, economic reports galore will assist them in determining the overall direction of the economy. Mind you, many of these reports are monthly, they get revised regularly and an economy as large as ours rarely is going to turn on a couple of reports. However, the financial markets are likely to get all worked up about inflation (which we will see with the employment report), consumer spending (in the income/spending report) and job creation (in the employment report).Read full article... Read full article...
Tuesday, May 15, 2007
U.S. Consumer Prices Rising at 5.6% Y/Y in Last Three Months! / Economics / Inflation
By: Mario_Innecco
The U.S. Department of Labor reported today that the Consumer Price Index or the C.P.I. rose 0.4% on a monthly basis in the month of April. Wall Street was expecting a rise of 0.5% so Bloomberg news reported that the C.P.I. came out lower than expected and that this was a sign that inflation is abating as the economy cools!Read full article... Read full article...
Tuesday, May 15, 2007
UK Inflation falls back below 3% to 2.8%, Interest Rates still to rise to 5.75% / Economics / Inflation
By: Nadeem_Walayat
Inflation for April, as measured by the Consumer Price Index (CPI) has as anticipated fallen back below 3% to 2.8%. This follows last months shock rise to 3.1% CPI, which prompted the governor of the Bank of England to write a letter to the Chancellor explaining why inflation had exceeded the upper boundary of 3%, and guaranteed a rise in interest rates to 5.50% at last Thursdays MPC Meeting (May 10th).Read full article... Read full article...
Thursday, May 03, 2007
Will The Dow Jones Crash? / Stock-Markets / Inflation
By: Investmentscore.com
The following short video is designed to explain a complex investing subject to the average person. Learn how inflation is affecting your investments. The video starts very slowly, builds on basic concepts and then pulls it all together for a clear perspective at the end. From the intermediate investor to the average person, we believe anyone watching can relate to the important message within.Read full article... Read full article...
Thursday, May 03, 2007
Vote, vote, vote for central banking! / Politics / Inflation
By: Adrian_Ash
"...What if the 'first win' of globalization didn't go to China ? What if it went to central bank policy wonks instead – free to keep real interest rates low despite oil prices trebling...?"
TAX PAYERS in Britain were invited to vote early and often in today's local council elections. The French will get to choose between one bone-head and another this weekend, too.
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Sunday, April 22, 2007
U.K. Inflation – Government and Bank of England "Misleading Public" Says Gold-Market Analyst / Economics / Inflation
By: PRWeb
The British public is being misled about what's driving the current surge in the cost of living, said a leading gold-market analyst today. "Blaming energy prices is little better than a lie," according to Adrian Ash, head of research at BullionVault.com."First Tony Blair tried it, now Mervyn King at the Bank of England is trying it."
"But oil and gas prices are not to blame for the latest jump in the inflation rate. The problem instead is runaway growth in the money supply, caused by record low interest rates."
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Friday, April 20, 2007
Its Inflation Stupid as Wall Street celebrates benign CPI Report / Economics / Inflation
By: Peter_Schiff
Ding Dong the Witch isn't Dead - With this week's release of an apparently benign CPI report, Wall Street resembled Munchkin Land celebrating the death of the Wicked Witch of Inflation. Amidst the revelry few spared much concern that the Index actually registered a monthly gain of .6%. Since such a rise equates to an annualized inflation rate of 7.5%, how could the Wall Street Lollipop Guild be so euphoric? Simple; to pronounce the Witch sincerely dead, one needs only to consistently strip out marginally needed items such as food and energy. Without these "distractions" the core CPI increase can be shown to be only .1%: “way” below the .2% that had been forecast.Read full article... Read full article...
Sunday, April 08, 2007
Commodity Markets Analysis, Meat, Gold, Corn and Peak Oil / Commodities / Inflation
By: David_Petch
Where's the Beef?? It Better be in Your Freezer - Several different things I want to address first before getting to analysis of the HUI. The first one has to do with meat. The governments do not include the price of food or energy in the core rate of inflation (soon they will be including those that lie in graveyards into their index to further “average” the price down I am sure of it) so everything that you or I have to buy in the grocery store no matter how much costs rise is not “their definition of inflation”. This is the government's way of hiding the volumes of money being created out of thin air.
The coming of Peak Oil is causing a movement in the US to produce ethanol in order to provide an alternate fuel source. The big corporations are pushing for corn because it is big money. Use of straw grass, sugar beets etc. is far more efficient in the energy balance of the production equation.
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Friday, March 30, 2007
February Personal Consumption Expenditures (PCE) Increases Inflation Risks / Economics / Inflation
By: Paul_L_Kasriel
In real terms, February Personal Consumption Expenditures (PCE) increased by 0.2% after January's 0.3% rise. It was a 0.5% increase in real service sector spending that yielded a positive change on overall real PCE. Real durable goods expenditures fell 0.1% and real nondurable goods expenditures fell 0.4%.
Real PCE services increased 0.5%, fueled by a 9.5% rise in expenditures for household utilities (electricity and gas). As you may recall, February was considerably colder than usual. In fact, in terms of heating degree days, February 2007 was the coldest February since that of 1979. March warmed up.
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Friday, March 30, 2007
US Economy, Bernanke's Big Battle with Stagflation / Economics / Inflation
By: Money_and_Markets
Mike Larson writes : Last week, I told you that our Federal Reserve Board Chairman was reaching for his “Bernanke put.” But today I want to talk about the major forces opposing his efforts.
In a nutshell, the Fed played too fast and too loose with monetary policy for too long. That allowed inflation to seep into virtually every corner of the U.S. economy and its capital and commodity markets.
At the same time, economic growth is slowing sharply due to the spreading impact of the housing and mortgage meltdown. I'll share some figures with you in a minute. Suffice it to say, they don't look good.
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Thursday, September 28, 2006
ONS Makes inflation calculation blunder ! / Interest-Rates / Inflation
By: Phillipa_Green
The Office for National Statistics has made a serious error in its inflation data, which will impact on expectations for further interest rate hikes and pushed the pound sharply lower. Read full article... Read full article...
Wednesday, June 21, 2006
Central Bankers declare War on Global Inflation / Economics / Inflation
By: Gary_Dorsch
By Gary Dorsch :Editor, Global Money Trends magazine
For the past four years, the big-3 central banks were the world's “serial bubble blowers,” flooding the world with cheap money via historically low interest rates, in order to pump up stock markets and real estate values. However, with global economic growth running at 5% in the first half of 2006, the most robust multi-year expansion since the 1970's, there were serious side effects of surging energy and commodity prices, that are now feeding into consumer inflation.
Bank of England chief Mervyn King admitted on June 12 th , “During the fastest 3-year period of world economic growth for a generation, monetary policy around the world may simply have been too accommodative.” However, in order to correct the imbalance, a tighter global liquidity environment is required. “After a period of robust world economic growth, we approach a bumpier stretch of the road. A rebalancing of global demand is desirable, but the way ahead may not be smooth,” King said.
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Wednesday, January 12, 2005
Commodities Bull Market - Trading the CRB Index / Commodities / Inflation
By: Nadeem_Walayat
The current correction in the CRB index presents an potential opportunity to buy into the Commodities Bull Market, as the CRB comes off new highs of 292, now down to 282.
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