Posted on 05/19/2013 6:56:44 AM PDT by blam
MORGAN STANLEY: And Now It's Time To Worry About Deflation Again
Joe Weisenthal
May 19, 2013, 7:04 AM
We were just talking about how the wrongest prediction of the past 5 years was the call for "inflation" or "hyperinflation" due to aggressive monetary easing.
In his latest US Macro Dashboard note, Morgan Stanley economist Vincent Reinhart points out that the real story now is the return of deflation risk.
With evidence building that the Q2 soft patch is upon us, worrisome chatter about deflation is taking center stage. Our outlook for some time has been that mounting fiscal drag would show through in Q2 most strongly as sequester effects take hold and a slowdown in global trade hits US shores. Indeed, another run of poor data this week has shown Spring growth may be dampened by weakness in manufacturing, increasing jobless claims, and a stalling housing recovery. The slowdown in activity is not helping the Fed with their consistently significant misses on the employment side of their mandate, but it now appears they may have to turn their attention to supporting inflation from the bottom.
While it's well known that the Fed is far away on its employment target, it's also now seeing its inflation target look increasingly perilous.
(Excerpt) Read more at businessinsider.com ...
If only my grocery bill would deflate.
And my gas bill.
And my property taxes.
And my medical insurance bill.
etc.
I still see a ton of inflation that they don’t seem to have ever captured in their statistics.
Wages certainly have deflated, but everything else but housing has gone up.
Obama 51% approval.
You just need to look at the Big Picture.
Good charts
These people who write about the economy are like the people that write about health issue. One day more children then ever are malnourished, the next day you read about rampant childhood obesity that is sweeping the nation.
On the 16th we had this from Weisenthal:
http://www.freerepublic.com/focus/f-news/3020502/posts
On the 15th we saw this:
Cisco’s John Chambers Says US Economy Is Slowly And Steadily Improving
Read more: http://www.businessinsider.com/ciscos-john-chambers-economy-improving-2013-5#ixzz2Tkg2fxIU >
On May 7th this: The US Economy Is The Envy Of The World Again, And Just Like That The Bears Have Been Annihilated Read more: http://www.businessinsider.com/us-jobs-report-crushes-bears-2013-5#ixzz2TkexACQF
Now a few days later they’re talking deflation & contraction.I do know that people are hurting especially the working poor. Wages are stagnant but the price on everyday goods are going up.
Chilling charts; absolutely chilling. Certainly explains a lot. The velocity of money is the one that really worries me.
Hey, at least wages are deflating.
—The velocity of money is the one that really worries me.
Velocity of Money is the
single best Indicator of the Health of an Economy
Any One who believes this Economy is Healthy is Deluded
Tell me about it. But hey, the same $1000 I don’t have this year buys a better quality HDTV than the $1000 I didn’t have last year.
The site needs a /sarc tag
The site needs a /sarc tag
+++++++++
Guilty as charged. I’m just stuck with the sarcasm gene. It’s built into my system.
But on the subject of deflation and the CPI, color me skepical. The Government is lying to us. Everyone’s costs are going up and pretending they’re not using a phony CPI is not going to fool anybody with half a brain.
The only thing that is deflating is discretionary income.
and Government credibility on inflation statistics...
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