Tuesday, December 27, 2011

Another Blow to Krugman: Consumer Confidence at 8 Month High

The Conference Board reports that its Consumer Confidence Index rose almost 10 points to 64.5, up from a revised 55.2 in November.

The surge builds on another big increase in November, when the index rose almost 15 points from the month before.

Krugman-like Keynesian analysts were scorched again. They had expected the index would come in at 59.

Consumer confidence isn't my favorite indicator because it will be slow in detecting tops in the business cycle. But strong confidence at the beginning of an upturn in the Fed created boom-bust cycle suggests that individuals will be lowering their desire to hold cash balances, which points to accelerating price inflation.

Thus this is a double-whammy to NYT Keynesian economist Paul Krugman, who only weeks ago said we remain under depression coniditions and who believes that inflation is under control.


  1. Crack up boom.....how bad will the inflation get? Let's start a betting pool.

    Put me down for 50%/year real inflation by the start 2013 if the "recovery" stays on track for 2012.

    What's your guess Wenzel?

  2. I'm a bit perplexed by your posts in relation to Krugman. Are you positing that the economy is improving?

  3. @JohnT

    Pretty sure he's just saying we're having another manipulated boom and then the inflation will begin. So you can call that improvement if you want, but it's not real improvement. It's only temporary and will cease whenever the printing presses are turned off, which they ultimately will be. As stupid as Bernanke is, he too will have his tipping point for the amount of inflation he can take before he decides to contract.

  4. And yet case-shiller is down, and 100 k-marts and sears are shutting down due to poor holiday sales.

    Still too many houses and strip malls left over from the last boom.