Friday, March 13, 2015

PRICE INFLATION WARNING: MIT Price Index Has Exploded to the Upside

The Billion Prices Project, which scrapes the Internet daily to capture changing prices online and has often foreshadowed subsequent changes in official price indexes, shows a sharp turn upward in measures of inflation, albeit from a low starting point, reports WSJ.

This sharp up turn in prices does not surprise me, it is one of the major themes I have been emphasizing in the EPJ Daily Alert. The Federal Reserve along with most mainstream economists are pretty much just trend followers, they have no idea how quickly price acceleration can occur. They are all pretty much forecasting 2% annual price inflation for years out. There is a strong element of gasoline price influence to the recent BBP climb, but that also was the main driver of the lower inflation numbers earlier.

That said, I don't think we will get out of 2015 with inflation under 3% (as measured by government stats) with 5% the quick next stop, followed possibly by inflation over 10%.

(Note: The BPP index was originally built by MIT economists and is now updated by State Street PriceStats)


1 comment:

  1. Fed's Disregard For Working Class Americans

    The ugly reality is that the bottom 80% of Americans experienced none of that gain. That’s right a big ole goose egg. And so when the Fed via its ass pamper boy, Steve Liesman, start banging on about the fact that some sliver of society is being handed extraordinary wealth while the working class has lost 40% of their net worth since 2007, well a big fuck you right back at ya bub! The Fed is very aware that the bottom 80% of Americans own less than 5% of US equity markets. And so the Fed is very aware that its manipulation of stock prices such that it creates immense unearned wealth to those in the markets doesn’t reach the bottom 80%. So why celebrate the results of the stock market price manipulation??

    It is embarrassing that our policymakers are either that inconsiderate or that stupid to celebrate such a brutal dislocation between the haves and have nots. I don’t know what one can even say about the Fed making a celebratory statement like that today. It is somewhat beyond words. And really paints the picture as to how little thought goes into the lives and well being of the bottom 80%.