Stealth Inflation

[Cold Highway]

In the popular mentality, however, inflation is simply defined as prices rising. After decades of steadily rising prices, people seem to have forgotten that prices sometimes fall. In light of the bursting of a number of record-breaking, government-fueled asset bubbles, prices should be declining across the board (as they did in the Great Depression). The fact that prices are stable, or have even rallied in some sectors, indicates that inflation is already spreading across the economy.

Got to wonder where the first riots will start when hyperinflation occurs.

Campaign For Liberty — Stealth Inflation   | by John Browne

 

[Ockham]

Until manufacturing either in the US or China ramps up, the inflaction won't make itself known. The other thought is that demand will increase, but production will not because they'll be gun shy to jump in again, and therefore it will be a slow increase. I used to think inflation was imminent - I'm not so sure any more as the government is able to manipulate it's impact and growth. If it happens, it may not occur for years.

 

[Kushinator]

John Browne is one of my favorite financial/economic analysts. And what he says is true. Once banks begin to lend, we will start to see some price activity. One question is when? The other is whether the Fed will begin to pull out excess liquidity in the appropriate fashion all while continuing to make interest payments on excess reserves (to both encourage lending and raise interest rates).