• 20 hours Markets Unfazed As Inflation Hits 13-Year High
  • 2 days How the Token Economy is Disrupting Financial Markets
  • 4 days FBI Investigating 100 Types Of Ransomware Attacks
  • 6 days Fed Ends Corporate Credit Emergency Lending Program
  • 8 days AMC Becomes the Latest Winning Meme Stock After GameStop
  • 9 days The Real Reason Your 401k Has Been Lagging
  • 10 days China Lifts Cap On Births, Allows Three Children Per Couple
  • 12 days The Market Is Ripe For Another GameStop Saga
  • 15 days Senate Grills Big Banks Over Pandemic Opportunism
  • 16 days Cannabis Has A Major Cash Problem
  • 17 days Ransomware Netted Criminals $350M In 2020 Alone
  • 18 days Russia Is Taking On Google
  • 19 days Chinese Regulators Deal Another Big Blow To Bitcoin
  • 20 days Ohio Residents Brave Vaccine for Chance To Win $1M
  • 22 days Inflation Is Coming. Are You Prepared?
  • 23 days 3 World-Shaking Trends Investors Need To Watch This Year
  • 23 days Travel Might Get Another Supersonic Disruption
  • 24 days The World Is Running Out Of 6 Key Resources
  • 25 days $15/Hour Minimum Wage Might Happen Naturally
  • 27 days Money-Laundering Binance Probe Report Adds To Bitcoin Woes
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Creepy

Fed Governor Ben Bernanke was at it again yesterday, the occasion being a luncheon gathering of the Investment Analysts Society of Chicago. Dr. Bernanke continued to tow the Fed's party line on inflation, to wit:

"In my view, there still is an output gap and I think that it will continue to create some downward inflation pressure ... I think that currently the output gap and productivity are both factors that are going to help keep inflation under control over the next couple of years."

His prepared speech dealt with the various vehicles -- many highly theoretical in nature, but Dr. B. was a Princeton eco professor -- the central bank uses to assess inflation and the threat thereof. Frankly, as I read through the speech, I kept having eery visions of the kind of things that fascinated John Merriweather and his Long-Term Capital Management associates. But don't take my word for it, have a look at Bernanke's prepared comments in their entirety at: http://www.federalreserve.gov/boarddocs/speeches/2004/20040415/default.htm

At any rate, while Ben Bernanke is reasonably sanguine about inflation "over the next couple years," the longer end of the Treasury yield curve has been less so recently. And as odd as it may seem, I suspect inflation concerns recently showing up in Treasury yields have at least partially been spawned by the same inflation data -- "official" inflation data generated by "official" US government agencies, no less -- from which Dr. Bernanke and his Fed colleagues continue to take comfort.

From Wednesday's missive (4/14, "Inflation Watch ..."):

"The latest CPI results reflect the inflation 'creep' also showing up in other measures."

In addition to the Consumer Price Index, the following table breaks out some of the "other measures" in which the "creep" is showing up. And while no numbers for them appear below, remember the piece I wrote not long ago about some of the disquieting price data coming from the Institute for Supply Management's indexes measuring the economy's manufacturing and non-manufacturing activity (4/6, "Where Is PPI Inflation Hiding?").

    % Change
Series As Of Y/Y 3-Month*
CRB Futures Index 3/2004 22.2 52.7  
Import Prices 3/2004 1.2 12.0  
Consumer Price Index 3/2004 1.7 5.1  
Producer Price Index 2/2004 2.1 3.6  
*Compound annual rate.
 
NOTE: "Inflation Watch" and the four measures shown above will make regular appearancesin the coming GRA website.

Back to homepage

Leave a comment

Leave a comment