Hyperinflation (50% per month inflation) is not in the
picture yet. But, in my view, if the Fed does
cut further while continuing its monetarization, chronic
inflation (defined as real inflation in excess of 10% per
year) will be. No, not according to BLS, which will continue
to spit out 2% numbers. The bond market is mostly derivatives
based, so the TIPS follow the expected BLS numbers. Those
determine the TIPS - its the fake statistics that
matters for payout on TIPS, not the reality (I was invested
in those). Strange indeed, there are no bond vigilantes.
The new breed are the carry traders, and this new breed are
the ones selling the dollar now, who will continue doing
so if foreign CBs move rates further up to contain rapidly
rising prices on food, fuel and other commodities.
Russia went through hyperinflation again as communist rule
fell in the early 90-s, yet nothing happened (well, who's
Putin? An Ex-KGB chief)
usagold.com
There is something about "accumulated fuel" in this
article.
"Prices were in fact rising much faster than the rate at
which money was being printed. Therefore, reasoned the
officials, the price inflation could hardly be blamed on the
government. Actually, as we shall see, the ebb and flow of
confidence can play a big role in the short-term trend of
prices. Confidence in the mark had weakened. At the same time,
and as a consequence, billions of hoarded marks came out of
hiding and entered the marketplace. The accumulated fuel was
burning."
Note: M3 is now growing 14% per year - the housing crisis should
be a thing of the past soon.
shadowstats.com
Inflation has moderated somewhat even according to
John Williams who has the worst inflation numbers out
there. But... I expect it to pick up some steam as the dollar
falls. |
