A New Year May Merit New Investments: A Quick Look at Spain

On this change of year, on the last day  of the twelfth month of the twelfth year of the third millenium of the Christian Era, the lyrics of another Jew with a bent to preaching (and a convert to Christianity), Robert Zimmerman, (better known as Bob Dylan), come to mind  (LINK):

The line it is [...]


The Dreaded “D” Word

Prices are falling. The Fed will interpret this as “deflation” whereas it is more related to lack of demand. They will interpret falling prices as “deflation” and view this as dangerous to the economy. Here is a summary of the PPI and Ex-Im prices indices. Tomorrow (Thursday) the CPI will come [...]


Is This Deflation?

The official “inflation” numbers came in last week and they show declining prices, something that the Fed calls “deflation”. The Fed and most policy makers will panic if deflation continues and prices steadily drop. It’s a tricky thing to evaluate because much of the decline in prices has to do with [...]


More Deflation Pressures Seen

On June 28 last year, I wrote a post titled Important Battle at Four Dollar Copper.  Shortly thereafter, copper surged half a buck but then dropped by one-third to $3.  With global money-printing picking up  and hopes that only a minor European recession and mild Chinese growth slowdown would let the party resume, copper rebounded- [...]


KeithGram: What’s So Bad About Falling Consumer Prices?

Bloomberg had a piece today, “Japan Consumer Prices Fall for Fourth Month, Adding to Case for BOJ Easing“, noting that consumer prices are falling in Japan which (somehow) adds to the “case” for printing money by the Bank of Japan.

 Why?  Let’s set aside the principle that there is never a case for printing money, as [...]


Past Present as Layaway Plans Return: The Public Runs Short of Dollars

In line with my theme that for over half a year has emphasized the price-deflationary aspects of biflation, The New Yorker has provided a nice, brief update of the return of yet another post-Great Crash phenomenon in Delayed Gratification:

…As early as the fall of 2008, with the recession in full swing, Kmart started a [...]


Of Dollars and Euros

Two articles caught my eye this morning to discuss.  I will trash one and praise the other.

First, Bloomberg.com is out with the journalistic equivalent of “taunting” in (American-style) football with a title that says it all:  S&P Cut Proves Absurd as Investors Prefer U.S.

Basically the e-paper owned by the mayor of Wall Street [...]


A Relationship Between European Austerity and Municipal Bonds

The European economic and financial situation is beginning to resemble the “Asian contagion” of the late 1990′s:  a deflationary disaster for the countries involved, which in turn helps allow the (relatively) good times to continue in the “core” and to some degree even the U.S.  News from Spain today is ugly:

Markit’s Purchasing Manager’s Survey [...]


Inflation or Deflation: A Mish Mash

The September Personal Income and Outlays report from the BEA came out last Friday, and according to Mish, I should be howling. More on this in a moment. But, personal income declined slightly MoM, spending was up slightly, and PCE is low. To Mish this signals deflation.

Here’s the data summary:

PCE [...]


Inflationistas vs. Deflationistas: What Does CPI and PPI Tell Us?

Inflationistas are probably confounded by Friday’s Consumer Price Index report that showed a decline of 0.2% in June. The report pins the decline, the first since June 2010, on falling energy costs. As a large component of CPI it:

declined 4.4 percent in June, the largest decline since December 2008. The gasoline index, which fell [...]


Is Mish Correct in Predicting Intermittent Deflationary Periods?

The well-known blogger Mike Shedlock aka Mish predicted that the U.S. will go in and out of deflation in a post yesterday. He writes that “the U.S. will go in and out of deflation for a number of years”.

Is this correct? If so, what are the investment implications?

We can think of deflation two [...]