Friday, December 24, 2010


Home ? Most Recent Stories

23 December 2010 by TPC 34 Comments

Well, I think it’s becoming pretty clear where the commodity price inflation is coming from – China and genuine economic strength.? The entire inflationist argument in the United States has been pretty much dead wrong for over two years running – whether you believed in hyperinflation, high inflation or default due to “money printing” you have been well off the mark.? This morning’s PCE prices data was just one more sign that disinflation rules the day and deflation remains the greater risk in the United States (via the Cleveland Fed):

“The Personal Consumption Expenditure (PCE) price index rose at an annualized rate of 1.1 percent in November, compared to a 2.0 percent increase in October. Excluding food and energy prices (core PCE), the index rose 1.0 percent during the month and is up just 0.8 percent on a year-over-year basis. After excluding non-market-based items—such as financial services furnished without payment—the core PCE price index rose 1.1 percent in November, offsetting a 1.1 percent decline in October, and is up 0.8 percent over the past year.”

N.B. – Three’s still little to no sign that inflation is working its way into the system via QE2 (although I do believe inflation fears have contributed somewhat to the surge in commodity prices). Despite all of the incessant shrieking over “money printing” and other inaccurate descriptions of QE and its impact on the economy there is still almost no signs thus far that inflation is making any sort of sustained pick-up.? And that’s not surprising to anyone who actually understands that QE is a non-event.


The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author(s). The opinions of all guest authors or contributors can and will differ from those of Mr. Roche. These opinions do not necessarily represent the opinions or investment decisions of Mr. Roche. The author(s) may or may not have a position in any security referenced herein and may or may not seek to do business with one another or companies mentioned via this website. Any action that you take as a result of information or analysis on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

A brief note on comments – The increase in users in recent months has resulted in an increase in unproductive comments. Any user who engages in the use of racial epithets or uses the comment section as a place to insult other users will be banned from the site. The comment section is welcome to all readers who are interested in asking pertinent questions and/or engaging in thoughtful, intelligent, and productive debate. In short, just be nice. Thanks.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at
Five Filters featured site: So, Why is Wikileaks a Good Thing Again?.

View the original article here

No comments:

Post a Comment