Grace there are many here who think we are in a high inflation environment. I would guess at least 10. If one looks at prices over the last 5 years, and ignores the last year, it is hard to say there has not been massive inflation.
houses, gasoline, heating oil, medical expenses, and education have all soared.
If you believe the CPI, you are probably a minority of one.
If we forget about prices and look at the explosion of credit and the lowering of credit standards on top of it, once again it is hard to state a case for low inflation.
My gripe here is the disingenuous way that every price rise here is labeled inflation while ignoring huge price cuts by builders over the last 9 months, gasoline prices now dropping, restaurant prices dropping, natural gas prices dropping, etc while posting "inflation du jour" comments on orange juice when it rises in the midst of another hurricane.
When it comes to inflation expectations, nearly everyone here thinks home prices will crash but somehow inflation will still be high. Not me, I expect home prices will crash, jobs will too, foreclosures and bankruptcies sill soar, and people will be forced to cut back spending whether they want to or not. I expect the US$ to hold its own.
By my definition those are deflationary forces, whether or not prices other than asset prices drop very much at all.
Mish |
