Investment

» permabear - Inflation is winning (as is stagflation)

http://www.clevelandfed.org/research/inf...

-- posted by permabear

» permabear - U.S. economy is sinking into stagflation trap

http://www.financialsense.com/Market/dai...

-- posted by permabear

» Jas_Jain - Re: U.S. economy is sinking into stagflation trap

In response to U.S. economy is sinking into stagflation trap posted by permabear:

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We hear you, Perma!

Burn-ass-ke is inflating the commodities and deflating the labor by having caused the housing bubble led recession. What % are commodities and what % is labor in CPI? But, why tax the brain when everyone knows we will have inflation and couldn't possibly have deflation.

Follow the herd!

Jas

-- posted by Jas_Jain

» permabear - Re: U.S. economy is sinking into stagflation trap

In response to Re: U.S. economy is sinking into stagflation trap posted by Jas_Jain:

Jas,

Norm (and you) probably had it right when he said that the coming economy will see waves of both inflation and deflation. I think the short-term trends definitely favor inflation. Bernanke is living up to his image as "Helicopter Ben". I kind of feel like it was fate to put this guy in charge of the Fed at a time in history when the U.S. may be facing the worst financial crisis since the last Great Depression. Bernanke is probably loving this whole crisis, because he will get to put his decades of academic study of the last Great Depression into practice. The problem is I think Bernanke has the whole thing wrong. I don't think you can just inflate your way out of a credit/deflationary bust. There are no easy cures to the excesses that have been occurring for decades. The U.S. and world are inevitably going to experience the pain, and it probably will come from both inflation and deflation.

-- posted by permabear

» Jas_Jain - Re: Re: U.S. economy is sinking into stagflation trap

In response to Re: U.S. economy is sinking into stagflation trap posted by permabear:

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We are in agreement once again.

Jas

-- posted by Jas_Jain

» Normxxx - Re: U.S. economy is sinking into stagflation trap

In response to Re: U.S. economy is sinking into stagflation trap posted by permabear:

Hey!?! Reread the old posts! JJ was/is all for deflation and straight down. I was the one saying this was going to be something altogether new- with waves of inflation/deflation, alternating, or together, as in deflating credit and inflating prices.

-- posted by Normxxx

» permabear - Re: U.S. economy is sinking into stagflation trap

In response to Re: U.S. economy is sinking into stagflation trap posted by Normxxx:

Like Allan does on various boards, I was doing a little peace making and smoothing over. You and Jas have been at each other for months about when this mess started and on whether it's inflation or deflation. The bottom line is that all three of us have been right about predicting this credit mess. Why nit pick the particulars. The bottom line is that all those who have given Jas, Norm and I grief all these years about being eternal pessimists can now eat their words. The reality is that all three of us have been right all along. We warned everyone that a huge mess was coming. And now events are proving all of our alarming predictions to be coming true.

-- posted by permabear

» Jas_Jain - FWC: U.S. inflation pressures at four year low - ECRI

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When the inflation rate in the US starts to fall it will fall like a rock once the economy has been in a recession for 4-6 months. Until then the inflationists will have a field day. It may well coincide with the bursting of the current Commodities Bubble. Bubbles always last longer than I thought based on my past record. -- Jas

-x-x-x-x-x-
U.S. inflation pressures at four year low - ECRI
Fri Mar 7, 2008 9:40am EST

NEW YORK, March 7 (Reuters) - U.S. inflation pressures ebbed to a four-year low in February due mostly to disinflationary moves in interest rates and in loans, a U.S. economic research institute said on Friday.

The Economic Cycle Research Institute's U.S. Future Inflation Gauge (USFIG), designed to anticipate cyclical swings in the rate of inflation, fell to 115.9 in February, its lowest
since January 2004 when it was 115.0, according to ECRI data.

"With the USFIG dropping to a four-year low, it is clear that the widespread worries about an uptrend in U.S. inflation pressures are not warranted," said Melinda Hubman, research
associate at ECRI.

The downward move in the gauge was moderated by inflationary moves in measures of commodity prices and of jobs, Hubman said.

The FIG's annualized growth rate, which smooths out monthly fluctuations, fell to minus 5.4 percent in February from minus 3.1 percent in January, revised from negative 3.0 percent.

ECRI also revised the January reading in the USFIG index to 117.7 from an initially reported 117.9. (Reporting by Rodrigo Campos; Editing by Walker Simon)

http://www.reuters.com/article/bondsNews...

-- posted by Jas_Jain

» permabear - Re: U.S. economy is sinking into stagflation trap

In response to Re: U.S. economy is sinking into stagflation trap posted by permabear:

LONDON (Thomson Financial) - European government bonds fell despite weak US jobs data as markets focused on the announced liquidity injection by the Federal Reserve.

The Fed said it will raise the total size of its March money auctions to 100 bln usd and begin 28-day term repurchase agreements that are expected to total 100 bln usd to 'address heightened liquidity pressures in term funding markets'.

On top of that, the Fed said it will expand the ways it delivers liquidity to banks, which includes using less liquid assets as collateral for term repurchase transactions.

'The Fed is now providing liquidity to the banking system in particular and the financial markets in general in effectively unlimited amounts to prevent further downward pressure on asset prices from forced liquidations into already softening markets,' said John Kemp at Sempra Metals.

-- posted by permabear

» pbradford6 - Why inflation will NOT trump deflation

In response to Why inflation will NOT trump deflation posted by permabear:

From Barron's today:

"NEVER ASK THE BARBER IF YOU NEED A HAIRCUT. Never ask the Realtor if the house you are considering buying is a bargain at the price offered. And never ask the government to calculate the rate of inflation when it can save millions of dollars in cost-of-living adjustments."

Those tidbits of wisdom come from Ray DeVoe, who authors the eponymous DeVoe Report. We've known Ray for a bunch of years and read with pleasure his weekly observations on the market, the economy and life in general. A shrewd and, even rarer, sane investment type, he does his business under the Jesup & Lamont flag.

What makes the quote above especially pertinent, obviously, is that even while recession's clammy hand makes itself felt, inflationary fires are starting to flare in earnest, stirring unfond memories of the 1970s and early 1980s, when the cost of virtually everything from diamonds to doughnuts vaulted into the wild blue yonder. Ray takes due note of the double whammy of recession and inflation back then and points out that the measures of both used at the time were a heap more accurate than those Uncle Sam relies on today. Especially notable, we think, was the calculation he cites of January's 4.3% rise in the consumer-price index (vs. January 2006) by John Williams of Shadow Government Statistics.

Using the degimmicked yardstick that was in use prior to 1980, Williams comes up with a reading of 11.8%, which, to these tired eyes, seems a quantum leap up from the official 4.3%. And, more to the point, it squares a lot more closely with $106-a-barrel crude, not to mention upward leaps just this year of commodities of every kind from 30% or more in aluminum, oats and silver and double-digit gains in coffee, corn, wheat and zinc, among others.

Before 1980 and before fiddling with the CPI became the fashion at the Bureau of Labor Statistics, the reckoning was, as Ray points out, based on "a market basket of goods and services bought and used by the average American family." A measure, in other words, of the cost of living and evidently a good deal closer to the truth than the finagled numbers now in favor

It feels like 11.8% for me.

-- posted by pbradford6