It takes time even for a powerful eruption of deflationary money to get sorted into the real economy. Nothing goes in a straight line and even big changes don't just happen right away. The last time, Euro$ #4, it began early in 2018 triggering all kinds of financial disruptions and monetary fireworks. The same familiar indications, rising dollar, flattening and [...]
While the world fixated on the US CPI, it was other “inflation” data from across the Pacific that is telling the real economic story. Having conflated the former with a red-hot economy, the fact American consumer prices aren’t tied to the actual economic situation has been lost in the shuffle of the FOMC’s hawkishness, with markets obliged to price wrong-way [...]
It isn’t just the vast difference between Chinese consumer prices and those in the US or Europe, China’s CPI has been categorically distinct from China’s PPI, too. That distance hints at the real problem which the whole is just now beginning to confront, having been lulled into an inflationary illusion made up from all these things.To start with, yesterday China’s [...]
German optimism was predictably, inevitably sent crashing in March and April 2022. According to that country’s ZEW survey, an uptick in general optimism from November 2021 to February 2022 collided with the reality of Russian armored vehicles trying to snake their way down to Kiev. Whereas sentiment had rebounded from an October low of 22.3, blamed on whichever of the [...]
If only the rest of the world could have such problems. Chinese consumer prices were flat from February 2022 to March, even though gasoline and energy costs predictably skyrocketed. According to China’s NBS, gas was up 7.2% month-over-month while diesel costs on average gained 7.8%. Balancing those were the prices for main food staples, especially pork, the latter having declined [...]
This is a truly weird shape for the US Treasury curve to find for itself. Really steep up front, seriously upward sloping consistent with the Fed’s stated rate hike intentions (which influence short-term rates most directly up to around the 2-year note). From there on down, though, it’s flat. As in pancake, almost. I can’t recall a time when the [...]
Most Americans understandably have tunnel vision when it comes to the American CPI and what it might portend for their personal circumstances. Gasoline prices and those for anyone trying to buy a car or now rent some kind of shelter, the threat is immediate. From this palpable sense, the word “transitory” today might just seem offensive.Yet, it may prove itself [...]
How is that US Treasury rates out in the independent longer end of the yield curve have now “suffered” a seven percent CPI to go along with double taper and triple maybe quadruple (if the whispers are to be believed) rate hikes this year, yet have weathered all of that allegedly bond-busting brutality with barely a market fluctuation? The short [...]
Basic intuition says this is a no-brainer. Producer prices rise, businesses then pass along these higher input costs to their customers in the form of consumer price “inflation” so as to preserve profits. This is the supply chain hypothesis. Statistically, we’d therefore expect the PPI to lead the CPI.And this was expected for much of Economics’ history, taken for granted [...]
More inflation numbers around the world, more of the same. Producer prices, this time. Beginning in the US, the annual rates remain high and reached a little higher in September 2021. Commodities have been the highest of all, up 20.47% year-over-year for another greatest increase since the mid-seventies. The PPI for final demand goods was up 11.68%, that the most [...]
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