Tuesday, July 17, 2012

Is Stagflation Around the Corner? Core Inflation Climbs

Yikes, how are the Fed apologists going to deal with this. Their favorite price inflation measure, the core index, is climbing.

Core inflation rose at a 2.4% annual rate in June. The past year, apparel prices rose 3.9%, medical care +4.3% and the food index rose 2.7%.

The energy index fell 1.4%.

What's going on is that the latest slowdown in Bernanke money printing (M2 annualized money growth is around 4%)has pushed oil prices lower. It is also causing a slowdown in the overall economy and stock market. BUT, the previous money printing, which entered the capital goods sector is now moving into the consumer goods sector, that's why you are seeing apparel, medical care and food prices climbing.

If Bernanke keeps slowed money growth into the election, we will be facing stagflation, with a possible stock market crash.



3 comments:

  1. Theory: Bernanke and his puppet masters want Obama to lose so that they can get their man at Bain Capital in.

    Mittens is as close to one of them as is possible without having worked for Goldman so chances are that he'll do more for them.

    So perhaps he's doing it intentionally.... either that or he's seen the light and understands what he's done and is trying to undo it without causing a catastrophe (too late for that).

    ReplyDelete
  2. What data are you looking at to conclude that "the previous money printing...entered the capital goods sector"?

    ReplyDelete
    Replies
    1. Where do you think the money headed?

      Delete