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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (11624)	2/11/2015 8:24:19 AM
From: Goose94	Read Replies (1) \| Respond to of 203329

Chart of the week: US experiencing deflation Soc Gen global strategist Albert Edwards argues US core CPI already negative Albert Edwards, Societe Generale’s famously bearish global strategist, has put out a note in which he argues that “the US recovery is stalling and outright deflation is as big a threat there as it is in the eurozone”. As proof he cited the fact that US Core Consumer Price Index (CPI) inflation if measured in a similar way to the eurozone, is already equivalent to that in the Eurozone (see graph) – an insight that he credited to two former colleagues, Marcel Alexandrovich and David Owen. Moreover, he commented: “But, perhaps more significantly, the 6m change in core US CPI inflation (using the Eurozone definition) is actually already negative, unlike the eurozone series.” Pointedly, he asked: “Who do you think has the bigger deflation problem – the US or the Eurozone?” Investment For his part Edwards remains invested in long-dated (10 year plus) government bonds, with a very big health warning: “…(Note that on a 5-10 year view I believe government bonds will be a disastrous investment and that further rounds of much more aggressive quantitative easing will ultimately result in much higher inflation starting with Japan). But on a 1-2 year view I think there is ample room for global yields to fall further led by the US.” Definitions Core CPI inflation excludes energy and food prices as the price of these goods can be very volatile. The eurozone measure of core CPI excludes owner-occupier equivalent rent, which is meant to measure the implied rent homeowners incur by living in their own home rather than renting it out. Therefore, to compare core US CPI to it core Eurozone CPI it should be stripped out.