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 [...]

Central Banking Vodooo

Last month in a surprise move The Bank of Japan (BOJ) moved to negative interest rates, meaning deposits of regulatory capital for some banks will be charged. Theory says this will incentives financial institutions to lend, and by doing so stimulate the economy. Theory. However many are comparing BOJ’s move to a step through the [...]

Working to Live or Living to Work?

The US economy is starting to feel wage pressure, with American median incomes (finally) back to levels last seen before The Great Recession.

So a happy end to 2016, eh? Not really. Even as incomes are rising so are expenditures. The chart below shows how much Americans spend on Health Care and Housing, divided by [...]

Mixed picture on global inflation

Inflation in New Zealand, inflation in Dubai, low, inflation in Vietnam, low, inflation in India, low, little inflation in China, low inflation in Denmark, low inflation in Australia, low Indonesian inflation, and seemingly low inflation in The United States.

But what about American inflation – can we look deeper? The chart above shows [...]

Soft commodities are falling

So where’s the inflation?

As documented in this blog and elsewhere, as one of the policy responses to The Great Recession the United States sharply increased it’s money supply. Generally, as the the supply of money increases so does possibility of inflation. However official metrics of inflation show historically low measures, leading some [...]

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: [...]

Hey American consumer feeling any poorer?

You should be. Between shrinking wages and low but relentless inflation the wealth of the American consumer has been steadily eroded. From time to time I’ve looked at the consumer price index, or CPI and it’s effects on various investible assets. But some folks find rather abstract metrics such as CPI a tad difficult [...]

The cost of an education in America

The incessant stream of happy news most people pay attention to (instead of looking at data and crunching the numbers themselves) continues to reassure that [...]

The S&P 500 adjusted for inflation

Lots of happy news last week about The S&P 500 following the Dow Jones 30 Industrials and hitting record highs. Or did it?

The chart above shows two series, the S&P 500 in nominal terms and the S&P 500 in real terms. The difference? Nominal measures a “stated” rate, while real is “adjusted [...]

Is inflation making an appearance?

The most recent CPI numbers make for interesting reading. Curious, but in spite of all the money thats been pumped into the US economy over the past few years inflation to date seems very subdued. The chart above shows sector specific CPI as follows: first, the Consumer Price Index for Food and Beverages (CPIFABSL, [...]