I agree with your post and applaud you for how well thought your position is.
However, it seems to me that there is sometimes another "macro" event that occurs....for lack of a better word, I think of it as a "current" as in river current....from 1997 and until a few months ago, the "current" was taking events toward disinflationary shores, no matter what the new event, it was toward lower prices, more overcapacity, etc.....now the "current" seems to be toward "inflationary" shores....higher commodities (even gold!), less capacity (earthquake), tobacco, etc.
The reason I bring this up is this: the interpretation of the numbers is going to be in the direction of the "current", and that interpretation will be the correct one....so, even though the "core" PPI ex volatiles and apparently one time events, seems to be good news, in light of the shift in "current", I don't know that we can ex all of those items from the number and be accurate in our read of inflation. |
