For the last year and a half my assessment has been that the near-term pressures on the U.S. economy were deflationary, while long-term fundamentals involve significant inflation risks. It’s time for a look at the data that have come in over the last 6 months, and time to say that I still see things exactly the same way.
Category Archives: inflation
Gold and inflation
Federal Reserve Chair Ben Bernanke last week dismissed the suggestion that the recent surge in gold prices signals some kind of inflationary pressures:
So gold is out there, doing something different from the rest of the commodity group. I don’t fully understand the movements in the gold price, but I do think that there is a great deal of uncertainty and anxiety in financial markets right now and some people believe that holding gold will be a hedge against the fact that they view many other investments as being risky and hard to predict at this point.
I think Bernanke has this exactly right.
Inflation, taxation, and the underground economy
University of Maryland Professor Boragan Aruoba (of the Aruoba-Diebold-Scotti Business Conditions Index fame) has an interesting new paper that offers another perspective on the challenges facing Europe.
Reactions to last week’s economic data
Here I offer some thoughts on last week’s numbers for employment, auto sales, and commodity prices.
Commodity inflation update
The view I have been forming of near-term inflationary pressures is that we’re seeing two very different dynamics in play, with the dollar prices of things the Chinese can stockpile and import going up and the dollar prices of everything else (like U.S. wages and rents) under significant downward pressure. The last week seemed to bring some reprieve on the first front.
Inflation fears
Is it reasonable to worry about inflation in the current environment?
Inflation in China
Why hasn’t inflation caught up with a monetary-induced boom in China?
Should the Fed be the nation’s bubble fighter?
That’s a question recently taken up by
the Wall Street Journal. Here are my thoughts.
Commodity prices and the Fed
I’ve been discussing possible explanations for the recent tendency of the dollar prices of commodities to move together. On Friday we received a very useful data point for distinguishing between the different hypotheses.
Commodity inflation
Why are the prices of so many commodities rising in an economy that seems to remain quite weak?