Inflation down

so as the little ray of sunshine, the inflation indexes are down and actually shows a decrease overall for the year. The reason is that Oil is back down under $100, more like $92 right now, and there never was inflation to speak off, just a spike in prices that didn't trigger a wage-price spiral.

On the good side of things it means the FED can run the presses without putting too much pressure. This is the stagnation of the monetary mass. It will not go up, not spiral down, it will go down gently. Finally some room to wiggle.

Comments

Anonymous said…
While there has been inflation in things we must have like food and energy, there has been deflation in most other "luxury" items including homes, cars, etc... The destruction of asset value and credit is deflationary...the FED is pumping money into the system to prevent another 1930-33 deflation, or 1869-1896 deflationary period or Japan 1990s deflation. It's hard to say which will win!

Deflation is winning this week (except food and fuel).

Thing is...FED keeps the inflation pedal to the metal, the deflationary brakes give out...then we suddenly hit the hyperinflationary wall!
September 16, 2008 at 1:10:00 PM PDT
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