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