Free Republic

The fear of deflation serves as the theoretical justification of every inflationary action taken by the Federal Reserve and central banks around the world. It is why the Federal Reserve targets a price inflation rate of 2 percent, and not 0 percent. It is in large part why the Federal Reserve has more than quadrupled the money supply since August 2008. And it is, remarkably, a great myth, for there is nothing inherently dangerous or damaging about deflation. Deflation is feared not only by the followers of Milton Friedman (those from the so-called Monetarist or Chicago School of economics), but...

Japanese Prepare For "Abenomics Failure", Scramble To Buy Physical Gold Tyler Durden 03/28/2014 10:42 -0400 As we reported yesterday, the world's most clueless prime minister, Japan's Shinzo Abe, has suddenly found himself in a "no way out" situation, with inflation for most items suddenly soaring (courtesy of exported deflation slamming Europe), without a matched increase in wages as reflected in the "surprising" tumble in household spending, which dropped 2.5% on expectations of a 0.1% increase in the month ahead of Japan's infamous sales tax hike. How does one explain this unwillingness by the public to buy worthless trinkets and non-durable...

The Census Bureau’s Philadelphia office wasn’t just corrupting the nation’s unemployment rate by fabricating data. It was also filing false information about inflation in this country. Just how large an effect this fraud was having on the Consumer Price Index (CPI) — and consequently the cost of living adjustments for Social Security recipients and others — is not yet known.

On March 17, a team of radio astronomers announced they discovered purportedly direct evidence for cosmic inflation—a critical component of the modern Big Bang model. To make this discovery, the researchers used a specialized telescope called BICEP2 located on the Antarctic plateau.1 Radiation that has its strongest intensity in the microwave portion of the electromagnetic spectrum comes to us from all directions in space. Secular researchers interpret this cosmic microwave background radiation (CMB) as "relic radiation" from a time about 400,000 years after the alleged cosmic explosion. Now, a team of astronomers led by John M. Kovac of the Harvard-Smithsonian...

The Real Inflation Fear - US Food Prices Are Up 19% In 2014 Tyler Durden 03/26/2014 10:20 -0400We are sure the weather is to blame but what happens when pent-up demand (from a frosty east coast emerging from its hibernation) bumps up against a drought-stricken west coast unable to plant to meet that demand? The spot price (not futures speculation-driven) of US Foodstuffs is the best performing asset in 2014 - up a staggering 19%...(snip)We're not allowed to post charts from Bloomberg so you'll have to click to the site to see the chart.

Why Food Prices Are Surging Matthew Boesler Mar. 25, 2014, 12:06 PM Since the beginning of the year, food prices have been on a tear. In a new report, Morgan Stanley commodities analysts led by Adam Longson attribute the surge in prices to a number of factors, "from weather (in the case of sugar, soybeans and coffee) to disease (in the case of hogs) to geopolitics (wheat and corn)." The Morgan Stanley analysts don't believe this will continue. "To date, weather concerns in South America have proven overstated, as evidenced in the recent declines in sugar prices," they say. "Tensions...

A common argument for dumping the Euro is that it is overvalued, and that the ECB (European Central Bank) is unwilling to correct this so-called “problem.” This overvaluation is regularly cited as being over 10 percent against the dollar. The Swiss central bank surrendered control of its money supply by fixing its currency at 1.2 against the Euro essentially on the notion that its currency was “overvalued.” Advocates of a Euro breakup consider that a country with its own currency can then follow an independent monetary policy ensuring a competitive exchange rate. Never mind that neither the USA nor Great...

Harry Dent predicts mild inflation, then massive deflation, then mild inflation.

Just a month ago we warned that food inflation was on its way. Today we got the first confirmation that problems are on their way. While headline data washes away the nuance of what eating, sleeping, energy-using human-beings are paying month-in and month-out, the fact, as WSJ reports, that beef prices surged by almost 5% in February - the biggest change since Nov 2003 - means pinching consumers and companies pocketbooks that are still grappling with a sluggish economic recovery. "Things are definitely more expensive," exclaimed on mother of three, "I can't believe how much milk is. Chicken is crazy...

She’s been derided in academia for decades: Panels disparaging her works are not unusual at the Modern Language Association’s annual confab. Yet and still, her virulent atheism has made her controversial on the right, where, it would seem, she would find a more sympathetic audience. Nevertheless, when it came to worldly matters, she was uncommonly prescient. For one thing, the Russian-born novelist had a keener understanding of the U. S. Constitution than many American Constitutional law professors do today. “The Bill of Rights was not directed against private citizens, but against the government—as an explicit declaration that individual rights supersede...

U.S. producer prices fell in February, dragged down by falling costs for services and offering little sign of a pickup in inflation pressures. The Labor Department said on Friday its seasonally adjusted producer price index for final demand dropped 0.1 percent last month. U.S. inflation has held at a very low level in recent years because of a persistently high unemployment rate. This is expected to push the Federal Reserve to keep its benchmark interest rate near zero for many more months even as the central bank dials back its monetary stimulus. Prices received by the nation's factories, retailers and...

A record 9.63 million households had a net worth of $1 million or more last year, a 58 percent increase from 2008. The number of affluent households worth between $100,000 and $1 million also went up in 2013 There was a record 9.63 million households in the U.S. with a net worth of $1 million or more last year, according to new market research. The number of millionaire households surged 58 percent from a dip in 2008, when there were 6.7 million households worth $1 million or more (not including primary residences). In 2007, there were 9.2 million households worth...

Stock markets around the world fell today, led by the 246 point dive, or 1.5%, for the U.S. Dow Jones Industrial Average and the 1.9% drop for German stock market index.  Analysts generally pointed to worries about a shrinking Chinese lending and the potential trade war between Russia and the West, but I am more concerned that since the beginning of 2014 food prices have skyrocketed.  The Federal Reserve must be concerned that their international support for “cheap money policies” to stimulate economic growth may be funding commodity speculation that is driving prices higher and creating wide spread misery. If...

The Federal Reserve’s seemingly endless program of quantitative easing (QE) begun under Ben Bernanke, and continuing at a slightly slower pace under Janet Yellen, has some of the punditry and much of the electorate up in arms. With good reason. Implicit in quantitative easing is the horribly obtuse notion that central banks can produce real economic growth through their monetary machinations. If only life were so simple. Back in the world of the reasonable, the sole purpose of money is as a stable measure of value that facilitates the exchange of goods and investment. Quantitative easing, by its very name,...

In 2008, California voters endorsed Proposition 2 which banned the confinement of animals. California egg producers had to ensure that chickens had enough room to move around which negated so-called “factory farming” and would end up raising the price of eggs by 20%.Obviously this was a problem for California agriculture which would have trouble competing on price with free agriculture. And there’s only so much of a market for fair-trade free-range organic chickens lovingly raised in a Quaker school by social justice experts on a strict diet of granola and NPR broadcasts.And so California’s reds decided to instead raise the...

It’s easy to get lost in the incremental gyrations of oil prices. “Oil rises on colder weather,” screams a headline one day, only to be followed the next by “Crude edges down on inventory report.” When not being driven by “fears over the Middle East,” crude is being hammered by “weak Chinese data.” You’d almost think energy analysts have a roulette wheel of explanations they spin each time prices move a notch: “Well, what will it be today? Oh ho! Emerging market turmoil it is.” Which is why it’s so refreshing—and to be frank, scary—to talk with Bob Hoye, the...

NEW YORK (Reuters) - The Federal Reserve should be willing to let inflation temporarily run above its target level so as to more quickly bring the economy back to health, a top Fed official said on Friday, even as a second policymaker signaled the very idea left him cold. The debate, between Chicago Fed President Charles Evans and Philadelphia Fed President Charles Plosser, underscored a fundamental disagreement over the central bank's optimal approach to policy under new Fed Chair Janet Yellen. To Evans, one of the Fed's most dovish policymakers, allowing inflation to run above the Fed's 2-percent target would...

Hamburg - Rising energy costs are becoming a problem for more and more citizens in Germany . Alone from 2008 to 2011 , the proportion of so-called energy- poor households in the Federal Republic rose from 13.8 to 17 percent. This is clear from a reply from the federal government to a request of the Green Parliamentary Group , which is present SPIEGEL ONLINE . This is true now more than every sixth household as low energy . Although there is still no generally accepted definition of the concept of energy poverty. However, the definition is widespread , according to...

When US money supply measured by M2 stood at $11 trillion in December 2013, I calculate that total broad money of the next largest 50 countries ranked by GDP amounted to the equivalent of a further US$67 trillion at current exchange rates. And that’s only on-balance sheet: we must add in global shadow banking, estimated by the Financial Stability Board to have been an extra $67 trillion in 2011, probably about $75 trillion today, given its recent rapid growth in China. So when we look at US broad money supply, we should be aware there is a further mountain of...

Beef: It’s what you can’t afford for dinner — for years to come. Retail beef prices are near record highs. During 2013, the price consumers paid for ground beef climbed roughly 5%, according to government data beef price data released Thursday finds that consumers paid an average of nearly $3.50 per pound for 100% ground beef. What’s more, experts say that climbing beef prices are here to stay. The USDA’s Economic Research Service projects that beef prices will rise faster than almost anything else this year. Don Close, a cattle economist with Rabo AgriFinance says he thinks prices this year...