Was just reading an article on Bernanke’s testimony to the Senate banking committee. Bernanke said: ``Inflation seems likely to move temporarily higher in the near term’’. and that the pass-through of commodity price to core inflation so far has been ‘limite’. Theres two factors working towards higher infatlion right now 1) High commodity prices 2) Increase in Money supply However, as the economy slows, I would think that commodity prices would reduce due to reduced global demand. Which leaves us with one cause of higher inflation, the increase in money supply. Do you think that one factor is enough to cause inflation that is outside of the Fed’s target range or will they be able to bring it under control when commodity prices drop?
"2) Increase in Money supply " — Sorry, this is incorrect. Money supply is shrinking rapidly.
cfa_gremlin Wrote: ------------------------------------------------------- > "2) Increase in Money supply " — Sorry, this is > incorrect. Money supply is shrinking rapidly. I thought the Fed was printing money like there was no tomorrow…
cfa_gremlin Wrote: ------------------------------------------------------- > "2) Increase in Money supply " — Sorry, this is > incorrect. Money supply is shrinking rapidly. lol, not according to the Fed. http://www.federalreserve.gov/releases/h6/current/
cfa_gremlin Wrote: ------------------------------------------------------- > "2) Increase in Money supply " — Sorry, this is > incorrect. Money supply is shrinking rapidly. hmm…what do you base your statement on? http://www.federalreserve.gov/releases/h6/current/ M1 has been flat, but M2 has been rising
joey beat me to it
The government is robbing us of our savings by printing money.
they arent reporting M3 anymore. are they?. cheats
http://en.wikipedia.org/wiki/Money_supply M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements. Does that mean all the liquidity that the fed injects through Repos does not get counted in the Money Supply? Also, alternate data source for US M3 http://www.shadowstats.com/alternate_data
Sorry but M3 doesn’t include any shadow credit that was created by shadow banks aka SIVs, conduits etc. That’s one of the main reasons many believe the Fed stopped publishing M3. These shadow banks, are, to a large extent, no longer in existence due to the credit crunch. All that credit is disappearing and not being captured in official figures.
Syd_RE Wrote: ------------------------------------------------------- > Was just reading an article on Bernanke’s > testimony to the Senate banking committee. > > Bernanke said: ``Inflation seems likely to move > temporarily higher in the near term’’. > and that the pass-through of commodity price to > core inflation so far has been ‘limite’. > > Theres two factors working towards higher > infatlion right now > 1) High commodity prices > 2) Increase in Money supply > > However, as the economy slows, I would think that > commodity prices would reduce due to reduced > global demand. > > Which leaves us with one cause of higher > inflation, the increase in money supply. > > Do you think that one factor is enough to cause > inflation that is outside of the Fed’s target > range or will they be able to bring it under > control when commodity prices drop? *Bump* The inflation vs. deflation debate continues! Clearly…declines in commodity prices have still not come through into the inflation number… U.S. Economy: Prices Erode Buying Power, Tax Rebates (Update1) http://www.bloomberg.com/apps/news?pid=20601087&sid=a_cgUH7hzJTA&refer=home I expect that would change over the coming months…especially when the Fed raises interest rates and puts a massive break on the economy… However, the infaltion contribution of increased money supply is still around and will probably stay around till some segree of normalcy returns to the markets. This seems to be an interesting situation… any thoughts/predictions?
Nah… the econo-statisticians are blowing it again. You can’t raise the minimum wage, send checks to every citizen, borrow like crazy, and bailout crappy banks… without having massive inflation. Yes, the miracle of productivity can offset some higher commodity prices but it cannot offset a zillion pounds of congressional stupidity. Inflation will go higher. IF we’re really lucky it and the gov’t pulls the right strings it will just come in flat. The problem with my thesis is the way CPi-u was developed is it is really not a true “life quality” capturing cost of living framework. I believe that if everybody universally cuts back and chooses a lower quality of life (because no one loans them money to perpetuate their existing lifestyle) then we would statistically have deflation. That is a possibility. The other crazy possibility to offset that is, just as the EPA slacks enforcement of environmental laws when the republicans are in office, maybe the BLS will do a better job of honestly measuring CPI when the republicans are gone. Measuring inflation accurately is a populist kind’o thing to do.
Brasiiiiil! Circa 1980. Except we don’t have samba.
I think higher oil price and weak US dollar caused this global inflation