International Inflation Rates Had Ups and Downs Over Past 5 Years. The global economy has suffered some serious setbacks since late 2007, with some economists and experts going so far as to call it the "Great Recession," after the 1920s-era Great Depression. And that certainly is an apt term for it, as the spread of the crisis has not been limited to a few countries. Nearly every country in the world has been affected in some way, which is a telling sign of the modern international economy. Inflation is one of the key indicators as to the health of the economy, but it needs to be looked at in context in order to have any value. Economists often use stretches of five years of … [Read more...]
Deflation Not Over?
The majority of the inflation from 2012 occurred in the first quarter with extremely high monthly rates of inflation. Overall in 2012 there were 6 very inflationary months (on a monthly basis), 5 slightly deflationary months and 1 very deflationary month (November). The first month of 2013 started out pretty inflationary but the first quarter of the year generally shows the most inflation for the entire year. See Table … [Read more...]
The Secret Word: Deflation – And the Next Five Years of Financial Turmoil
The following is a sample from Elliott Wave International's new 40-page report, The State of the Global Markets - 2013 Edition: The Most Important Investment Report You'll Read This Year. This article was originally published in Robert Prechter's July 2012 Elliott Wave Theorist. In the first five months of 2012, there were 20 times as many Google searches on "inflation" as there were on "deflation." This is down from a ratio of 50 times in June 2008. If any theme has been overdone over the past six years, it is the theme of inevitable inflation if not hyperinflation. Inflation reigned for 75 years, from 1933 to 2008. People are so used to it that they cannot imagine the opposite … [Read more...]
Producer Price Index (PPI) and Consumer Sentiment Index Point to Deflation
Two Signs That Deflation is Far From Over Producer Price Index (PPI) turns south The federal government defines the Producer Price Index (PPI) as "the average change over time in the selling prices received by domestic producers for their output." With help from the Federal Reserve's massive inflationary policies, the PPI has climbed even as the economy began to fall in 2008-09. All the while, the financial media persisted with stories of an economic recovery. EWI analysts offer an independent perspective. The New York Times declares, "Economic Gloom Starting to Lift." Corporate America, however, is not so sure. This chart of producer prices [wave labels removed] probably … [Read more...]
In 1929, Deflation Started in Europe Before Overtaking the U.S.
Marcus Aurelius was the last of the "Five Good" Roman emperors and is also considered one of the most important members of the Stoic philosophers. He ruled Rome from 161 to 180 AD. He brilliantly said, "Look back over the past, with its changing empires that rose and fell, and you can foresee the future, too." Today we may be seeing the beginning of the end of the American Empire. As Americans we don't like to think of ourselves as having an empire but according to Daniel Larison, The U.S. treats several key regions of the world as privileged space where it is supposed to have military and political supremacy, and regional challengers to that supremacy are treated as potential … [Read more...]
How the Dollar Affects Gold Prices
Interview with Jim Puplava, by Jeff Clark, Casey Research Jim Puplava has robust convictions….The CEO of Financial Sense News Hour, Jim is a man you should listen to carefully if gold factors in your portfolio or if you are thinking about adding gold anytime soon. In this interview, Jim talks about how the dollar affects gold prices. He discusses whether we are moving into a phase of deflation or inflation and gives his views on what exactly that will mean to gold investors. He discusses the likely impact of inflationary or deflationary forces, which one he believes will win out, and the effect it will have on our economy. Finally, he makes a very interesting prediction. Of course, … [Read more...]
Deflation or Inflation? Yes.
Deflation or Inflation? By John Mauldin I am frequently asked in meetings or after a speech whether I think we will have inflation or deflation. "Yes," I readily reply, trying hard not to smirk, as the questioner tries to digest the answer. And while my answer is flippant, it's also the truth, as I do expect both outcomes. Following the obligatory chuckle from the rest of the group comes a follow-up request for a few more specifics. And they are that I expect we will first see deflation and then inflation, but the key is the timing. Recessions are Deflationary Recessions are by definition deflationary. Deleveraging events are also deflationary. A recession accompanied by deleveraging … [Read more...]
In the United States, The Belt-tightening Has Just Begun
The Day of American Austerity: What Will It Look Like? In the United States, the belt-tightening has just begun Since the start of the European sovereign debt debacle, the word "austerity" has been bandied about a lot. It wasn't an everyday word, and may send some people to the dictionary. Merriam-Webster defines "austerity" this way: enforced or extreme economy. But even knowing this definition might leave one wondering how "austerity measures" relate to Europe's debt crisis. The Associated Press (5/13) provided this overview: Austerity has been the main prescription across Europe for dealing with the continent's nearly 3-year-old debt crisis, brought on by too much government … [Read more...]
Why is the US Federal Government Afraid of Deflation?
Deflation: Harry Dent "Understanding Demographics Is Vital to Success" In this segment from one of his talks at the Casey Research Recovery Reality Check Summit, economics expert and author Harry Dent explains how shifting demographic trends lead to economic cycles and why the current US federal government is so afraid of deflation. https://youtu.be/d3EZlY-29Ss Harry's complete presentation – as well as the speeches of 30 other economic and investment luminaries from this Summit – is available to you in MP3 or CD format. Listen to experts like David Stockman, Harry Dent, Lacy Hunt, James Rickards, John Hathaway, Chuck Butler – their assessment of what investors should expect and … [Read more...]
Prepare for your financial future
Position Yourself for the Rest of "Conquer the Crash" The earlier you prepare, the better To this day, I wonder why Robert Prechter's book Conquer the Crash has not been more widely recognized. It described in advance much of what happened in the 2008 financial crisis. Published in 2002, the book provided detailed descriptions of then-future economic scenarios. They were detailed vs. general. Prechter was specific in a way that would prove right or wrong; there was no gray. This is from the book: There are five major conditions in place at many banks that pose a danger: (1) low liquidity levels, (2) dangerous exposure to leveraged derivatives, (3) the optimistic safety ratings of … [Read more...]
