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 [...]

Capital hoarding intensifies

I’ve previously written about what I’ve perceived as a modern day capital strike, something we saw last saw during The Great Depression. Back the President Roosevelt’s actions drove businesses to hoard profits , reportedly due to uncertainty caused by what was perceived as capricious government intervention into private enterprise (sound familiar?). In any case, [...]

The hoarding of money continues

I’ve previously written about the buildup of inflationary forces in the US economy, and in the light of stagnating income and a slowdown in consumer spending I thought I’d take another look at the topic. The chart above shows the US supply of money (BASE, black line) compared to the velocity of money (MZMV, [...]

Waiting for the money

Something I found fascinating last week was in this environment of poor economic news – Europe slowing overall with sharp contractions in some nations, the continent’s largest trading partner, The United Kingdom, slowing as well, growth in the United States disappearing and China getting ready to crash – absolutely NO central bank activity.

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How about that inflation?

I’ve previously posted about the sharp growth in the US Money supply, and its almost negligible, by comparison, increase in GDP. An interesting question came by email – “what about inflation?”.

Inflation (I) is the product of two components: the supply of money (S) and how quickly that money moves changes hands in the [...]