The low inflation myth

The media is full of reports these days about low inflation or no inflation, in fact some refer to this period as another installment of the great moderation, or a protracted period of low inflation amid moderate, but positive economic growth.

Is this really true?

Let’s leave growth out of this for the [...]

CPI or chained CPI what’s the difference?

Obama has proposed making fundamental changes to the way that various government benefits such as Social Security are adjusted for inflation. Specifically, its been proposed that the existing metric, the Consumer Price Index (CPI) be replaced with a different metric known as “Chained CPI”. What’s the difference?

The chart above shows two series: [...]

The SP500′s lost decade

SP500, CPI, monthly, March 2002 to March 2012

Are you a buy and hold index investor? This strategy was widely touted for many years as an alternative to active trading. Between capital gains taxes and transaction costs, the argument went, your money was much better of in a passively managed, low cost index fund. [...]