Category: Inflation
The analysis published under this category are as follows.
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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