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This is the annualized rate of inflation taken over the previous three months. The trend appears to be down.
This is the annualized rate of inflation taken over the previous six months. The trend appears to be down.
This is the rate of inflation over the previous year. The trend appears to be down. However, last year at about this time we saw a rather substantial commodity selloff. This year we're looking at the record price of oil. October (as seen in November's CPI report) is looking to be a VERY nasty month for headline inflation if we don't see a similarly substantial commodity selloff VERY soon.
This is the annualized rate of inflation taken over the previous two years. The trend appears to be down. Note how it appears to have peaked at about the same time housing appears to have peaked.
This is the annualized rate of inflation taken over the previous five years. The trend still appears to be up. Oil is well past $80 a barrel now. If not for a very weakened housing market where would we be? It is enough to make me cringe.
Our dollar in the toilet certainly isn't helping matters. In the last two weeks we've lost another 2% to the Canadian dollar. In 2002, we could buy 1.6 Canadian dollars for one of our dollars. Now we get just 0.98 of them.
Prosperity baby, that's what I'm talking about. Keep dropping those dollars from the helicopters Bernanke. We're sure to spend them, well, at least before the next guy gets a chance anyway (as is the case in any ponzi scheme).
This represents my thoughts and opinions. In the short-term I see deflationary pressures even with oil at $80+. In the long-term, I am VERY concerned. Since I invest for the long-term and want relative safety in this overleveraged society, I have embraced TIPS and I-Bonds. However, this is not investment advice. As Alan Greenspan once said, "There is no safe store of value." Now that he's predicting an "Age of Turbulence" I think we'll all come to understand what he meant. He should know. He helped get us here. *sigh*
See Also:
Trend Line Disclaimer
Source Data:
Consumer Price Indexes (CPI)
Canadian Exchange Rate
4 comments:
Use the shadow stats or even just the pre-Clinton measure of inflation and become very concerned.
I'm reasonably comfortable with how the government is tracking inflation personally (I do track every penny I spend and am not seeing shadow stats level inflation), but I am still very concerned with where even government reported inflation will someday be heading (especially if the government thinks we can't actually survive any more recessions).
It has been a bit surprising to me that this high price of oil hasn't spilled all that much into the price of goods. I'm amazed at China's seeming ability to absorb the pain. I say "seeming" because I neither trust the numbers out of China nor do I think they can absorb our inflationary pain indefinitely.
Then again, I do recall a saying, "Never fight a land war in Asia." I'm fairly certain that's exactly what we are doing in this global economy these days. Based on the decline in our manufacturing base and our nearly overwhelming trade deficit, I'm not optimistic this "land war" is working out all that well.
The ex-Fed chairman said inflation was a far bigger concern for the United States than the dollar, which was trading at a tolerable level, the newspaper said.
http://www.reuters.com/article/businessNews/idUSN1736299820071017?feedType=RSS&feedName=businessNews&rpc=23&sp=true
So much for cause and effect. I laugh at that.
Kevin
Kevin,
I'm beating my head against my desk while reading it.
Greenspan said it was impossible to foresee an end to the U.S. economic troubles...
I'm tempted to paraphrase Steve McCroskey from the movie "Airplane!"
Looks like I picked the wrong week to worry about the dollar.
Or perhaps I should just stick with a direct quote.
There's no reason to become alarmed, and we hope you'll enjoy the rest of your flight. By the way, is there anyone on board who knows how to fly a plane? - Elaine Dickinson, Airplane!
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