Inflation Archive

Fed minutes

Bill McBride and I agree this is the key takeaway. That is, the Fed still sees the risks as asymmetrical and therefore prefers to err on the side of ease. So stocks soar on the belief that low rates from the Fed will support earnings and valuations, as interest rates stay low ...Read More

Japan’s ‘bad inflation’

The Next Stage of Abenomics Is Coming – Shinzo Abe (WSJ) My highest priority as Japan’s prime minister remains the economy… Make no mistake, Japan will emerge from economic contraction and advance into new fields and engage in fresh challenges…Some have said that Japan’s structural reforms—what I call the “third arrow” of ...Read More

Producer prices chart and other news

Remember all that ‘hyper inflation’ talk surrounding 0 rates and QE? No sign of it here. Or anywhere else I’ve looked: Nor do you hear any more talk about ‘credit acceleration’ since its post winter growth fizzled: And wage growth (NOT adjusted for inflation) remains next to nothing: And you only hear ...Read More

Housing and CPI

Reinforces the mainstream narrative of the moment: The Fed will keep rates low, getting ‘behind the curve’ and causing a run away economy. My narrative remains that the 0 rate policy is deflationary and also keeps a lid on growth. The ‘surge’ in total starts, which remain pretty much at the lows ...Read More

Abenomics= ‘bad’ inflation

Squeaking By on Abenomics By Joseph Sternberg July 2 (WSJ) — Preliminary data show cash earnings, including bonuses, rising by 0.8% year-on-year in May. Base pay increased 0.2%, its first rise in around two years. This looks like the “wage surprise” Japanese workers’ purchasing power fell another 3.6% year-on-year in May, after ...Read More

housing starts and other charts

Same pattern- down some for the winter, up some, then backing off some. If this is in fact what’s happening, Q2 GDP could be up less than 3%, and 2014 sub 2%, or even sub 0, if the demand leakages are allowed to keep the upper hand and a fiscal adjustment isn’t ...Read More

Abenomics Spurs Most Misery Since ’81 as Senior Scrimps

As previously discussed, it’s a case of ‘bad inflation’… Abenomics Spurs Most Misery Since ’81 as Senior Scrimps By Isabel Reynolds and Chikako Mogi June 6 (Bloomberg) — Mieko Tatsunami finds Prime Minister Shinzo Abe’s drive to reflate Japan’s economy hard to digest. “The price of everything we eat on a daily ...Read More

Wage inflation!

Time to tighten up on account of ‘wage inflation’… Full size image ...Read More

proactive fiscal tightening damages income growth

Full size image Full size image Mind the gap: Full size image This is below prior recession levels! Full size image This is year over year growth in consumption of domestic product, which is GDP less capex less exports. It shows how much ‘the consumer’ is spending on domestically produced goods and ...Read More

Factory orders- another Dec print revised down

Highlights Frigid weather in January didn’t help the factory sector where orders fell 0.7 percent following a downwardly revised 2.0 percent decline in December. Also revised lower is the ex-transportation reading for January, to a slim plus 0.2 percent vs an initial reading (in last week’s durable goods report) of plus 1.1 ...Read More