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This article by James Grant of Grant’s Interest Rate Observer is reprinted with his kind permission. I highly recommend it. “[As Chairman of the Fed under the Ron Paul Administration] I would commission, staff and ceremonially open the Fed’s first Office of Unintended Consequences.”— JH
Piece of My Mind [...] Despots and democratic majorities are drunk with power. They must reluctantly admit that they are subject to the laws of nature. But they reject the very notion of economic law … economic history is a long record of government policies that failed because they were designed with a bold disregard for the laws of [...] This article originally appeared in Bloomberg and is authored by Amity Shlaes, one of my favorite writers (see below). A little is all right. That’s the message Federal Reserve Chairman Ben S. Bernanke has been giving out recently when asked about the evidence of inflation in the U.S. recovery. Sometimes Bernanke doesn’t even go that far. [...] A “little” inflation will destroy capital, rob you of your savings, disrupt all of your long-term financial planning, create market instability, and leave you unprepared for retirement. You can protect yourself and you must. Price Inflation The Bureau of Labor Statistics released their official Consumer Price Index for February on Friday (up 0.4% MoM; up 2.9% [...] After all the hype about the great holiday season for retailers, the data just came in saying that personal consumption expenditures were actually flat for December, actually real PCE went down 0.1%. The other side of that is real disposable personal income went up 0.3%. This was being heralded by some MSM as being great because savings [...] Prudential came out with its annual survey on women and financial issues (“Financial Experience and Behaviors Among Women“) that tells us some interesting things about financial attitudes not just about women, but about the U.S. in general. One important change is what women are increasingly involved in making financial decisions in the family. Gone are [...] The CPI for September came out showing year over year price inflation at 3.9%, up from last month’s 3.8%. Prices increase 0.3% over August. Core price inflation (less energy and food costs) increased only 0.1% over August and is up 2.0% for the year. The BLS said: The Consumer Price Index for All Urban Consumers [...] Today is the Producer Price Index report release and tomorrow it will be the Consumer Price Index report. The PPI for September made a dramatic 0.8% MoM increase. On an annual basis prices rose 7.0%. If you strip out food and energy, the so-called Core price inflation, the Index rose 0.2% MoM and 2.5% YoY. [...] Price inflation is showing up worldwide +3.1% according to the latest OECD data for July: Consumer prices in the OECD area rose by 3.1% in the year to July 2011, compared with 3.0% in the year to June. The broad stability in the headline rate partly reflects offsetting movements in energy and food prices. Energy [...] Consumer spending took a dive in June, while personal income flattened out, and price inflation dropped slightly because energy costs moderated. Here is a snapshot of the report from the BEA (courtesy Econoday): In June, both income and spending were soft, reflecting slow job growth, a decline in motor vehicle sales, and a decrease in [...] |
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