Bureau of Labor Statistics: Inflation Down

Annual Inflation Chart

The U.S. Bureau of Labor Statistics released their monthly Consumer Price Index (CPI) data on Wednesday December 17th for November and reported lower inflation. The CPI for November was 236.151 down from 237.433 for October. This resulted in a monthly decrease in prices of -0.54% and an annual inflation rate of 1.32% down from 1.66% in October. View the chart and read the full commentary on the current annual inflation rate. Although the FED has been targeting a 2% annual inflation rate, rates are currently … [Read more...]

Crude Oil and Gold

Oil Priced in Gold

Because inflation decreases the value of of money, in order to have a "yard stick" of constant value it is necessary to use the inflation adjusted price when we consider the price of a commodity like Oil. Here at InflationData we have provided a variety of charts of the inflation adjusted price of commodities like Oil, Gasoline, Electricity, Natural Gas, Stock Market, Housing Prices, Education Costs and much more. But each of these requires you to rely on potentially flawed inflation statistics generated by some outside agency or government. If that agency has an agenda other than accuracy your cost estimates could be flawed. But there is an alternative and that is to compare your … [Read more...]

Could a Strong Dollar Actually Cause Problems?

Dollars in Non_Banks

It seems that there is the possibility for danger no matter which way the economy goes. You would think that a strong dollar would be a good thing... after-all it allows us to buy things more cheaply on the global market. If our money goes further we are richer, oil is cheaper, imports cost less, etc. But the flip side is that our products are more expensive on the world market and so we export less. In today's article we look at the inherent risks of a strong dollar. ~Tim McMahon, editor. Outside the Box: How the Rising Dollar Could Trigger the Next Global Financial Crisis By John Mauldin This week’s Outside the Box continues with a theme that I and my colleague Worth Wray have been … [Read more...]

Japanese Superman Meets Economic Kryptonite

SuperAbe

Abenomics: From Faith to Failure Why the biggest monetary stimulus effort in the world did NOT stop deflation in its tracks By Elliott Wave International When Shinzo Abe became the Prime Minister of Japan in December 2012, he was regarded with the kind of reverence that politicians dream about. He was featured in a hit pop song ("Abeno Mix"), hailed as a "samurai warrior," and featured on the May 2013 The Economist cover as none other than Superman. But in the two short years since, Abe as Superman has been struck down by the superpower-zapping force of economic kryptonite. On November 17, government reports confirmed that Japan's brief respite from a 20-year long entrenched … [Read more...]

Inflation Flat for October

Annual_Inflation_chart_sm

The Bureau of Labor Statistics released the Inflation rate for the month of October today. Annual inflation remained steady at 1.66% even though prices fell from the month previous (i.e. monthly inflation was -0.25%). However, since monthly inflation was -0.26% in October 2013 annual inflation rates remained virtually identical as October 2013 was replaced by October 2014 in the calculations. The FED has stated that it's goal is to maintain inflation at a steady 2%. But as we can see from the chart they have rarely achieved that  goal. If the goal was to remain below 2% we could say they have done very well since 2012 however during that time-period the FED has been fearing deflation … [Read more...]

Deflation: The Last Argument of Central Banks

Shadowstats

In today's article John Mauldin looks at "good" deflation vs. "bad" deflation, Austrian vs Monetarist vs Keynesian economics, causes of falling agricultural and manufactured goods prices, ShadowStats, hedonics, Asset Inflation Versus Price Inflation and more. ~Tim McMahon, editor Thoughts from the Frontline: The Last Argument of Central Banks By John Mauldin For a central banker, deflation is one of the Four Horsemen of the Apocalypse: Death, Famine, Disease, and Deflation. (We will address later in this letter why War, in the form of a currency war, is not in a central banker’s Apocalypse mix.) It is helpful to understand that, before a person is allowed to join the staff or board of a … [Read more...]

Inflation Down Again

Mip-reality-Dec-2013a

The Bureau of Labor Statistics (BLS) released the September inflation numbers on October 22nd and inflation is lower for the fourth  month in a row. Annual inflation in May was 2.13% in June it was down to 2.07% (although the BLS rounded both to 2.1%). In July inflation fell to 1.99% and in August it was down to 1.70% and in September it was 1.66%. Once again the BLS rounded both August and September to 1.7%. The last few months are a perfect  reason why it is important to use our two decimal place inflation calculations. So although we have seen a steady decline, using the BLS numbers you would see 2.1%, 2.1%, 2.0%, 1.7%, 1.7% and so the decline is not so obvious.   As the inflation rate … [Read more...]

Inflation or Deflation? – Yes

Velocity of Money Trap

Over the years we've published a variety of articles on the inherent "tug-of-war" between inflationary and deflationary forces in the world including How can we have Inflation and Deflation at the same time? and Battle of the 'Flations both from back in 2008 and Deflation or Inflation - Which is it? in 2009 and Which is Stronger- Inflation or Deflation? in 2010. Another recurring theme has been Velocity of Money and Money Multiplier- Why Deflation is Possible and today John Mauldin will take a stab at each these critical topics once again. Understanding their interrelationships will greatly help you understand the monetary forces at work.~ Tim McMahon, editor The Flat Debt Society By … [Read more...]

More Quantitative Easing in the Cards?

James Bullard. St. Louis FED President

For some time we've been saying that the FED is addicted to Quantitative Easing (QE) and that it wouldn't be so easy to kick the  habit. Then last week we told you that there are signs that the Deflationary roots go deep and the only thing keeping the economy on a steady keel is all the money being created by the FED.  But all that funny money is eroding the foundations and the FED can't keep it up forever. Up until now every crisis required a bigger and bigger entity to step up to the plate and assume the debt.  At this point the only entity bigger than the FED left to step up is the World Bank. So when the FED runs out of bullets it will be the last round of musical chairs. But at this … [Read more...]

Europe is Teetering on the Edge of “Japan-Style” Deflation

Disinflation

Europe: The ONE Economic Comparison That Must Not Be Named... Was Just Named The Continent is now teetering on the edge of a "Japan-style" deflation. Here's our take on it. By Elliott Wave International It's happened. The one economic comparison Europe has dreaded more than any other; the name that's akin to Lord Voldemort for investors has been uttered: "deflation." And it's not just "deflation." You can still spin that term in a positive light if you get creative enough. Say, for example, "Falling prices during deflation actually encourage consumers to spend." But once you add the following two very distinct words, there's no way to turn that frown upside down. And those words … [Read more...]