Why falling food prices are not a boon for Europe's economy By Elliott Wave International In the early 1990s, two simple words from a genius ad campaign radically transformed the way the U.S. consumer saw it: "Got Milk?" Suddenly, the narrative changed from an obligatory drink you had to finish as a kid, along with eating your vegetables -- into a sexy, funny, and above all desirable treat for all ages. Until now. In Europe, in 2015, famous celebrities donning milk mustaches no longer light the public's passion for lactose -- as prices for milk have spoiled. Here, a September 8, 2015 CNN Money article captures the curdled state of affairs: "So much milk is sloshing around the … [Read more...]
Is Global Depression and Deflation Underway?
In an article we published on August 16th, called Markets Crashing, Gold Rising the author said, "The probability of U.S. interest rate hikes this fall is now falling a rock. We are once again hearing the familiar call from Keynesian economists, including Paul Krugman, for more stimulus and debt. They acknowledge the trillions already printed and borrowed haven’t worked – but say it is only because it wasn’t nearly enough." As a matter of fact, Krugman has been beating the same drum since 1998 when he said, "The clear and present danger is, instead, that Europe will turn Japanese: that it will slip inexorably into deflation, that by the time the central bankers finally decide to loosen up … [Read more...]
Deflation Returns in September
The Bureau of Labor Statistics (BLS) released their inflation numbers for the year ending September 30th on October 15, 2015. Monthly inflation was negative (disinflationary) for the second month in a row resulting in annual deflation of -0.04%. Although at this level the deflation is so slight that the BLS rounds it to Zero. So basically prices are on par with those of a year ago. However, that doesn't mean that all prices are identical to those of a year ago. In the report issued by the BLS yesterday we note that food prices are up 1.4% over a year ago while energy prices are down -18.4%. and all other items excluding food and energy are up 1.9% so we see that the primary cause of the … [Read more...]
Hyperinflation and Government Debt
By Doug Casey The over-leveraging of the U.S. federal, state, and local governments, some corporations, and consumers is well known. This has long been the case, and most people are bored by the topic. If debt is a problem, it has been manageable for so long that it no longer seems like a problem. U.S. government debt has become an abstraction; it has no more meaning to the average investor than the prospect of a comet smacking into the earth in the next hundred millennia. Many financial commentators believe that debt doesn’t matter. We still hear ridiculous sound bites, like “We owe it to ourselves,” that trivialize the topic. Actually, some people owe it to other people. There … [Read more...]
CPI Index Down but Annual Inflation Flat
The Bureau of Labor Statistics (BLS) released their monthly Consumer Price Index (CPI-U) and Inflation report for the year ending in August on September 16th. The CPI index fell slightly from 238.654 in July to 238.316 in August resulting in monthly deflation but Annual Inflation for the year ending in August was 0.20% up from 0.17% for the year ending in July. That means that something that cost $100 a year ago would cost $100.20 today. That is compared to the typical inflation of around 3% which would mean that something that cost $100 last year would cost $103 this year. The CPI-U index a year ago was 237.852 and is currently 238.316. On an Annual basis Energy fell 15.0% over the … [Read more...]
US Consumer Spending vs. FED Inflation Decision
The Fed will meet on the 16th and 17th of September to decide whether it’s time to normalize its accommodative monetary policy. But despite vice-chairman Stanley Fischer’s hints at an inflation increase in September, analysts still think that several factors complicate the FED’s decision. Recent turbulence in equities markets across the globe as well as uncertainties about China’s market are only some of the factors putting a damper on the economy. During an Economic Policy Symposium held in Wyoming this August, central bankers discussed how inflation would finally rise despite these issues. After all, the factors that had been holding it down (including fading oil prices, downward … [Read more...]
July Inflation Numbers Minimal
The Bureau of Labor Statistics (BLS) released their monthly Consumer Price Index (CPI-U) and Inflation report for the year ending in July on August 19th . Annual Inflation came in at 0.17%. That means that something that cost $100 a year ago would cost $100.17 today. That is compared to the typical inflation of around 3% which would mean that something that cost $100 last year would cost $103 this year. The BLS rounds this to .2% which of course is so small that almost any one of the deflationary months last year would cancel out all the inflation we've seen over the previous 12 months. The CPI-U index a year ago was 238.250 and is currently 238.654. We have seen significant … [Read more...]
June- First Annual Inflation for 2015
The Bureau of Labor Statistics (BLS) released their monthly Consumer Price Index (CPI-U) and Inflation report for the year ending in June on July 17th. This resulted in 0.12% Annual Inflation. The BLS rounded this to .1% which of course is so small that almost any one of the deflationary months last year would cancel out all the inflation we've seen over the previous 12 months. The CPI-U index a year ago was 238.343 and is currently an almost identical 238.638. January through May 2015 saw deflation on an annual basis although each month was inflationary in and of itself. But due to the massive deflation of the fourth quarter of 2014, all the monthly inflation was cancelled out. However, … [Read more...]
Bank Closures “Could Never Happen Here”
By Jared Dillian I was watching the 6 o’clock news and saw images of closed banks in Greece and people lined up at ATMs. I’m sure you did, too.This must seem surreal to most people because it seems so remote. But put yourself in these people’s shoes for a second. You have money in the bank. Suddenly you can’t get to it. After standing in long lines, you can only get 60 euros at a time, which isn’t going to last you very long. What if you didn’t plan adequately and haven’t stashed away any cash? The banks will be closed for a while. What happens? How do you pay for rent? Or food? How does your employer pay you? Do you go homeless? Or hungry? Do you get really angry, take … [Read more...]
BLS Releases May Inflation Stats
May's monthly prices increase 0.51% but the annual inflation rate was still -0.04%. The Bureau of Labor Statistics (BLS) released their monthly Consumer Price Index (CPI-U) and Inflation report for the year ending in May on June 18th. This resulted in the 5th deflationary month in a row. We have seen a steady decline in inflation rates over the last year. May 2014 started with an annual inflation rate of 2.13%. June saw annual inflation fall to 2.07% then July declined to 1.99%, August was 1.70%, then September and October were both 1.66%, November was 1.32%, and December was 0.76%. When January rolled around it was … [Read more...]
