BlackRock: It's Way Too Early To Worry About Inflation

TBI ^ | 2-10-2012 | Sam Ro

[blam]

BlackRock: It's Way Too Early To Worry About Inflation

Sam Ro
February 10, 2013, 8:20 AM

There's no shortage of people who are freaking out about inflation, thanks to the Fed's ultra-easy monetary policy.

However, convincing evidence of inflation has yet to appear in the economic data.

Russ Koesterich, Chief Investment Strategist at BlackRock, has a new post on the iShares blog titled When to Worry About Inflation.

He says concerns of inflation are premature for at least two reasons (verbatim):

1.There is no wage inflation. Overall wage growth in the United States remains sluggish. The reason: The labor market is healing at an agonizingly slow pace. U-6, a broad measure of unemployment that also includes part-time workers looking for full-time work, is still indicating that about one in six American workers are unemployed or underemployed. Until this changes, raises will be hard to come by, and without wage inflation, overall inflation is likely to remain muted.

2.Bank lending is only starting to pick up. While the Fed has been busy in recent years with the modern equivalent of a printing press, the newly created money has been mostly sitting on bank balance sheets. Without much bank lending, growth in the money supply has been modest, lowering the risk of inflation. Though bank lending is starting to rise again, at least to businesses, it will take time before credit creation leads to any meaningful pickup in inflation.

Koesterich, however, says that inflation is something we may have to worry about in 2014 and beyond.

[Jonty30]

Until it starts to happen, then it will be something to worry about.

It’s better to worry about it, in its absence, and prepare for the possibility.

[Ouchthatonehurt]

I have to learn not to trust my own damn lying eyes.

[stevem]

No doubt the thing keeping the lid on is that 1/6 un-underemployment. When that changes the lid will explode.

Anyone who thinks current inflation isn't a problem hasn't been to a grocery store recently.

[Iron Munro]

No inflation?

What country are they talking about.
It can’t be the USA.

Of course the government inflation data doesn’t show it - the measurements are structured and manipulated to do just that.

They are just about as distorted and untruthful as the government employment/unemployment figures.

But one trip around the supermarket tells the true story.

[jimpick]

So I guess stagflation is a term of no meaning then.

Dumb ass.

[hinckley buzzard]

I have to learn not to trust my own damn lying eyes.

Gas at an all time high for February. Natural gas rising, food prices rising fast. Health insurance premiums rising. Taxes rising. Yeah, better to just keep one's eyes closed and trust the experts.

[volunbeer]

My wages are the same, but the cost of most necessities like food and fuel are going up.

In that sense, if my wages were inflated I would be better off - my purchasing power has declined in this administration. It will be worse if wages stay the same and commodity prices continue to rise.

[KarlInOhio]

And the one thing they claim neutralizes all the other inflation, dropping housing prices, they have recently started bragging is reversing. It's like building a house of hyperinflation cards and then getting excited that the bottom cards are wiggling.

[Secret Agent Man]

not a crisis they can exploit yet.

[SumProVita]

But one trip around the supermarket tells the true story.

______________________

Yep. And it’s not just prices. It’s the quantity being packaged now as well. It seems to be shrinking with several items. Anyone else notice this?

[blam]

You'll like this one. Everything is okay.

Stock Market Recovery Continues To Topple ‘Big-Picture’ Theories!

"There’s never a shortage of ‘big picture’ theories, usually of the gloom and doom variety. They certainly sell books; often cause anxiety, sometimes even fear. But they almost never come to pass."

[RedMDer]

Freepers, your Contributions make every difference!
Please keep ‘em coming! Thank you all very much!

[LostInBayport]

I bought some Triscuits because I had a decent coupon and they had a new flavor that interested me. The size of the box is dramatically reduced from what it used to be, and then you open it up and half of the plastic bag inside is empty. Regular price is just under $4. I paid half that and was still ripped off. The escalations in price and reductions in quantity will lead to brand extinctions someday. Someday being when the EBT crowd can’t buy them with our money anymore.

[headstamp 2]

“I bought some Triscuits because I had a decent coupon and they had a new flavor that interested me. The size of the box is dramatically reduced from what it used to be, and then you open it up and half of the plastic bag inside is empty.”

My favorite is the Chips Ahoy cookies. They are virtually the size of jacket buttons now.

[cherry]

its folly at any time not to have extra food supplies stored....folly not to have some cash on hand....

[cherry]

just follow the price of a small can of tuna over the last 3 yrs....you could buy it on sale for 3 cans/$1..name brand...now, if one can is $.79 its a “sale”....

[mylife]

Yup, Tuna, Beans, Spaghettio’s....

There is no inflation according to the Gov, but the “Chef Boyardee Index” shows that there is.

[samadams2000]

My California inflation index-

Gas- $4.10
Mayonnaise- $5
Milk $5.99 Gallon
Bread $4 a loaf
New Lighbulbs $5 each
Toilet paper- $18
Paper towels $15 for 12
Lunch Sandwich/Drink $12
Electricity Bill- Up 33%
.22LR ammo-.20cents a round up from .05

[arthurus]

Wages are the last price to rise in an inflation. We haven't got to "last" yet. Average prices are rising at somewhere between 6% and 10%. That is somewhat masked at first by substitution of cheaper products for the customary purchases and delaying large expenditures and such. It is officially masked by periodic tinkering with the CPI, the official measure of inflation to remove the items that are rising the fastest and add in those items that might actually be stagnant (due, in part, to substitution and abjuration)or even falling in price- there are such things in an inflation as some goods go out of favor and thus fall in price because people see that they can actually do without them and concentrate their buying on other more necessary things.