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Inflation Expectations Suggest 5% Inflation Is In The Cards

Tyler Durden's picture


Color us stunned. While the world and their pet cat Roger are not worrying about inflation because Bernanke says CPI/PPI are still well-anchored and everything else is "transitory"; it turns out the market has a 'different' opinion. We have discussed inflation expectations before (whether 5Y5Y forward views or 10Y inflation swap breakevens) as a trigger for Fed action (or inaction) but this time, the market front-ran Bernanke's Bazooka and in the last two days of QEternity has exploded higher with 5Y forward expectations now near 6 year highs. CPI remains below 2% but there is a clear lag between the rise in market-implied inflation and it showing up in the unicorn-laden CPI prints - what this means is that given the hubris of the Fed yesterday, market expectations of inflation are inferring CPI could rise to over 5% within the next 3 to 6 months. It will surely be difficult for Ben to keep-on-buying ('Finding Nemo'-like) in the face of that kind of 'transitory' rise in real data - though for now, real money remains bid as risk comes off a little (even as the long-bond yield blows 26bps higher this week) - oh and CPI and PPI jump their most in 3 years.

CPI vs inflation break-evens and forward expectations...


and longer-term - this has not ended well as once it runs, it is hard to stop...


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Fri, 09/14/2012 - 14:42 | 2796275 Michael
Michael's picture

It looks like on TV, that's always muted while listening to AJ, their finally showing dead troops coming home in coffins and body bags who were killed in Afghanistan and Iraq.

It's about time our dead solders are being honored by being shown on Jewtube MSM TV.

Fri, 09/14/2012 - 14:54 | 2796364 redpill
redpill's picture

You're really on a single track with the Jew thing, aren't you.  There are plenty of non-Jewish evil fuckfaces in this world, how come you never carry on about them?

Fri, 09/14/2012 - 14:59 | 2796398 Fake Jim Quinn
Fake Jim Quinn's picture

He sits home and masterbates while typing on chatboard because no one else listens to his squeaky voice. A pathetic little hateful loser. Ignore him and let him ultimately commit suicide, and do the world a favor

Fri, 09/14/2012 - 19:13 | 2797429 economics9698
economics9698's picture

If you want a better picture of the inflation rate when you go to FRED[1][id]=CPIAUCSL

Change the reading from indexed 1982-84 to % change from a year ago.

Last reading was 3% which was a lot more realistic than 1.4%.

It seems to work.

Fri, 09/14/2012 - 15:53 | 2796708 aerojet
aerojet's picture

True, but I'm as tolerant as can be and even I have to admit that Jewish people seem to occupy a disproportionate number of influential leadership positiosn within the US Government and the media.  Whether they are working in concert is an open question, but they certainly have biases towards their culture that are being played out within policy circles and in boardrooms around the US and the world.

Fri, 09/14/2012 - 17:00 | 2796957 KK Tipton
KK Tipton's picture

I just wish they would admit they are the spawn of Egyptians and Babylonians.

Then everything would make sense to the rest of the world.

PS - The Maasai from Kenya are the ex Egyptian soldiers. Kicked out at the same time as the "hebrews".They were sent to the south instead.


Know somebody else who has Kenyan (Egyptian) warrior DNA?
What is he doing these days?


Fri, 09/14/2012 - 19:20 | 2797436 economics9698
economics9698's picture

aerojet, when you own the printing press your guys get to win all the time.  Since 1965 this shit has gotten out of hand and there will be a backlash, sever, when all the good white upper middleclass people realize their money is not worth shit.

Look for a lot of bankers to be on the end of a rope and you can bet a lot of them will be Jews.

Sat, 09/15/2012 - 00:10 | 2798023 Non Passaran
Non Passaran's picture

If you are tolerant that does not mean you are capable of superior insight.
I believe dickheads like some folks on this site give them hard time when they try to integrate elsewhere so frequently they go to sectors where they are more people of the same group. That's a no-brainer for any group of people - any ethnic group, sexual orientation, etc.

Fri, 09/14/2012 - 15:55 | 2796727 WhiteNight123129
WhiteNight123129's picture

The problem is that all non-jew bankers  got Scott Free in Nazi Germany and innocent regular jewish people, jewish musicians and artists got atrociously murdered in Nazi Germany. Don t get played into the blame the minority shit, blame the government and politicians first. THe politicians always want a scape goat, then you can have an equal opportunity sentencing of bankers next, but get the politicians first.


Fri, 09/14/2012 - 16:09 | 2796798 Fake Jim Quinn
Fake Jim Quinn's picture

We just had four patriotic Americans killed over hate. Can we give the racial prejudice a rest for a while?

Fri, 09/14/2012 - 16:59 | 2796979 KK Tipton
KK Tipton's picture

If all people knew about history, and about the deceptions foisted on them, then those Americans would not be dead.

Some "races" are following scripts handed down to them from *way* back.
They need to understand the lies...and rip the scripts up themselves. Then we can all live peacefully.

Problem could be worse though.
Genetics and genetic memory can't be overcome?

If so, then the scripts might not matter as much.
Pull back the troops and let the world do what it wants then. Screw interventionism.

Fri, 09/14/2012 - 17:20 | 2797049 Michael
Michael's picture

Great insight Tipton.

I just see it as a character flaw they need to overcome, and they should diversify their skill set learning to be mechanics and laborers.

Fri, 09/14/2012 - 17:15 | 2797038 Michael
Michael's picture

I just mentioned  the Irish POS O'Reilly yesterday on the TV, everyone knows is owned by Jews. I also bash the CIA, FBI, Mossad, and MI5.

Fri, 09/14/2012 - 18:28 | 2797281 JPM Hater001
JPM Hater001's picture

"It's about time our dead solders are being honored by being shown on Jewtube MSM TV."

Please dont paint an entire group.  I know a number of very good Jews.  Some even like Bacon.

Kosher Bacon of course.

Fri, 09/14/2012 - 14:41 | 2796276 LawsofPhysics
LawsofPhysics's picture

Multiply that by how leveraged a given country's banking balance sheet is and you will get the real number.  hedge accordingly.

Fri, 09/14/2012 - 15:04 | 2796425 Oh regional Indian
Oh regional Indian's picture

India has real inflation somewhere in the late teens or early twenties.

Someone is exporting inflation and someone seems to be importing it.

Hmmmm.... wonder which is who...



Fri, 09/14/2012 - 15:13 | 2796484 LawsofPhysics
LawsofPhysics's picture

indeed, seems like there has to be a silver lining somewhere.

Fri, 09/14/2012 - 15:23 | 2796518 Oh regional Indian
Oh regional Indian's picture

Interestingly enough LOP, there is. Silver in Rupees is waaaay up in the past week or so. Rupee is weakening too.

All very interesting.


Fri, 09/14/2012 - 18:29 | 2797287 JPM Hater001
JPM Hater001's picture

So 5% inflation....are we still talking about 1999?

Fri, 09/14/2012 - 19:22 | 2797455 economics9698
economics9698's picture

On the subject of Fed leverage, it is one thing to purchase long-dated bonds when yields are high. It is another to purchase them when yields are at record lows and very small yield changes are capable of wiping out all interest income and leaving the Fed in a loss position when it is already levered 53-to-1 (2.9 trillion of assets on 54.6 billion of capital, according to the Fed’s consolidated balance sheet). At a 10-year Treasury yield of just 1.6% and a portfolio duration of about 8 years (meaning that a 100 basis point move causes a change of about 8% in the value of the securities held by the Fed), it takes an interest rate increase of only about 20 basis points (1.6/8) to wipe out a year of interest on the portfolio held by the Fed and push it into capital losses. It would then take another 24 basis points to wipe out all of the capital on the Fed’s balance sheet. Of course, they don’t mark the balance sheet to market. So the public might not be aware of those losses, but that would only mean that we would have an insolvent Fed printing money on an extra-Constitutional basis to fund its own balance sheet losses instead of public spending.

Fri, 09/14/2012 - 15:08 | 2796448 LongSoupLine
LongSoupLine's picture

Hence forth...

Silver bitchez.

Fri, 09/14/2012 - 14:42 | 2796283 SwimmininNawlins
SwimmininNawlins's picture

Inflation, that's good for everyone right?

Fri, 09/14/2012 - 14:59 | 2796396 redpill
Fri, 09/14/2012 - 15:10 | 2796459 SwimmininNawlins
SwimmininNawlins's picture

Someone get Scott Sumner a Nobel Prize

Fri, 09/14/2012 - 15:01 | 2796407 cynicalskeptic
cynicalskeptic's picture

Zimbabwe had the world's best performing stock market in the world for a while - and some of the busiest printing presses.....

But who cares if you're a millionaire... billionaire... trillionaire if you can't buy a loaf of bread?


And fiat makes lousy toilet paper - clogs the pipes.

Fri, 09/14/2012 - 15:10 | 2796466 SwimmininNawlins
SwimmininNawlins's picture

However, toliet paper makes great fiat

Fri, 09/14/2012 - 16:33 | 2796897 Nobody For President
Nobody For President's picture

It ain't called 'mountain money' fer nothin'

Fri, 09/14/2012 - 15:44 | 2796663 ziggy59
ziggy59's picture

Does do a job on the cling-ons tho

Fri, 09/14/2012 - 14:44 | 2796288 Yen Cross
Yen Cross's picture

 "Bond Vigilante alert"

Fri, 09/14/2012 - 15:23 | 2796522 you enjoy myself
you enjoy myself's picture

except the Fed snapping up every single bond is QE4.  Ben has painted himself into one hell of an epic corner.

Fri, 09/14/2012 - 14:44 | 2796292 DavidPierre
DavidPierre's picture
John Williams - Sell-Off in Dollar Will Evolve into Hyperinflation

Fri, 09/14/2012 - 14:52 | 2796353 JohnKozac
JohnKozac's picture

I heard Williams on a radio interview last Fall opining silver might run up to $200.


Ya never know, eh.

Fri, 09/14/2012 - 15:00 | 2796404 redpill
redpill's picture

Well shit, and I thought he just composed soundtracks.

Fri, 09/14/2012 - 14:54 | 2796375 uno
uno's picture

that's what the Bernake wants, dollar gapping down vs everything fiat 

Fri, 09/14/2012 - 15:23 | 2796524 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Except the Yen.

The BoJ knows how to print with the best of them.

Fri, 09/14/2012 - 14:45 | 2796296 Cognitive Dissonance
Cognitive Dissonance's picture

"Inflation Expectations Suggest 5% Inflation Is In The Cards"

Sure. But after backing out inflated inflation, core inflation will be well under control at less than 1%.


Fri, 09/14/2012 - 23:39 | 2797988 akak
akak's picture


"Inflation Expectations Suggest 5% Inflation Is In The Cards"


So, in other words, we are being led to believe that the real rate of inflation is going to fall to only 5%?

I'll believe it when I see it (and I am not going to hold my breath waiting).

Fri, 09/14/2012 - 14:46 | 2796317 Jason T
Jason T's picture

Inflation will come becaues we have failed miserably to invest in our fixed assets... shit is going to start breaking down and all that'll be left to pay to fix anything will be stamps with the word food on them.

Fri, 09/14/2012 - 14:48 | 2796319 e-man
e-man's picture

Does 5% inflation take into account the repatriation of foreign-held US dollars?  Assuming that other nations also understand the meaning of QE infinity?

Fri, 09/14/2012 - 15:35 | 2796611 ejmoosa
ejmoosa's picture

Other nations understand?  Who do you think is funding all of those "We Buy Gold" locations?

And where do you think all that metal is going?

Fri, 09/14/2012 - 14:49 | 2796338 Vegamma
Vegamma's picture

'Finding Nemo'-like. Well played. I will now hear Ellen Degeneres's voice whenever I hear the Bernank talk about QEX.

Fri, 09/14/2012 - 14:49 | 2796340 JohnKozac
JohnKozac's picture

Looks like the COLA for old folks (like my Grandpa) or anyone hitched to that CPI will be about 1.7%. Luckily he is  a barbarian and hol;ds substantial PMs in his banj safety depost box. In fact, he is the one who turned me on to Ron Paul and Peter Shiff years ago.


Bless him ::))


Fri, 09/14/2012 - 14:49 | 2796343 Dr. Engali
Dr. Engali's picture

I'd say that 5% inflation is generous and an improvement over where we are now.

Fri, 09/14/2012 - 15:48 | 2796686 Overfed
Overfed's picture

I wish we could go BACK to 5%.

Fri, 09/14/2012 - 14:50 | 2796346 fourchan
fourchan's picture

world wide race to the bottom continues.

Fri, 09/14/2012 - 14:51 | 2796350 q99x2
q99x2's picture

Poor people aren't affected by inflation because their complaints don't matter. Until they go fucking beserk of course. Then its like dude have you tried to get a job. I tried now I'm trying this M'fer. Aaagghhh I eat banker. Show me banker.

Fri, 09/14/2012 - 17:11 | 2797027 KK Tipton
KK Tipton's picture


And the people at the top don't use money. So, like, they don't care what "inflation" is.
Paris Hilton just hands a plastic card across a counter and people give her stuff.
Or, they just give her stuff...flat out.

The poor have to take chances to get all their stuff.

Fri, 09/14/2012 - 14:52 | 2796352 tawse57
tawse57's picture


It would be really good if you can put together a short article about the implications of QE3 re PMs, stocks, cash, etc, is now for all the numpty Joe Public retail investors who read ZH.

I suspect there are thousands of people who read this site with money in cash and wondering whether they go buy PMs or they go buy stocks or whether the stock market is just suckering in retail investors now through QE - something that goes beyond the usual comments of "got gold" or "silver bitchee".

I bet many of your readers would appreciate something that weighs up the pros and cons of where we are now after QE3's arrival.

Cash is obviously being eroded but are PMs and stocks just bull traps to fleece retail investors panicked into investing in either or both?

Are we going to see, just like after QE1 and QE2, a big spike up in PMs and stocks before a crash down... and then a gradual build up in both again?

I suspect most readers here are Joe Public retail types and not Wall Street Traders or survivalists living out in the woods burying silver in plastic tubing.


Thank you.


Fri, 09/14/2012 - 14:57 | 2796380 SwimmininNawlins
SwimmininNawlins's picture

Buy FaceBook stock. Remember buy low & sell high

Sat, 09/15/2012 - 22:09 | 2799709 CharlieSDT
CharlieSDT's picture

It seems like QE3 was already priced in the markets.  Money printing is like heroin, the more you do it the more you need to do to get that same high.

Fri, 09/14/2012 - 14:57 | 2796384 sdmjake
sdmjake's picture

Do you own research.This is Fight Club, it ain't a charity ward.


Fri, 09/14/2012 - 15:08 | 2796450 FuzzyDunlop21
FuzzyDunlop21's picture

You wont see an article like this because these markets make no fucking sense. No one knows what will happen and if something does happen no one knows why because the market just does whatever the fuck it wants. If youre not going to buy a real asset you may as well just go to the roulette table and bet it all on 21 black because trying to guess what the market will do is pointless

Fri, 09/14/2012 - 15:25 | 2796537 semperfi
semperfi's picture

I know what is going to happen exactly - its a no-brainer.  Benny Boy will print until the hyperinflationary blow-out endgame.  Buy gold, silver, platinum.  Easy win. Real easy. 

Fri, 09/14/2012 - 17:07 | 2797010 Overflow-admin
Overflow-admin's picture

Buried silver in plastic tubing: check

Fri, 09/14/2012 - 14:52 | 2796356 Atlantis Consigliore
Atlantis Consigliore's picture

Last 5 minutes of 'FARCEFACE FED Meets QE Infinity"  Wiemar $ US Bond Mkt Crash last scene;

Fri, 09/14/2012 - 14:53 | 2796361 gboos
gboos's picture

I would buy this chart  .... ;)

Fri, 09/14/2012 - 14:55 | 2796373 Yen Cross
Yen Cross's picture

O/T Obumma looks like a "skeleton" in a suit!  That boy needs to put some meat on those "cinnamon sticks" if he is going to make any headroom with "Foreign Leaders" ! 

Fri, 09/14/2012 - 14:58 | 2796389 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

"CPI remains below 2%"


Ha, ha, ha, ha, ha, ha!!!!!!!



Fri, 09/14/2012 - 15:06 | 2796443 Yen Cross
Yen Cross's picture

 Your point being? Most of South America is cutting rates, faster than " Hugo Chavez" can appropriate his malignant growths!

Fri, 09/14/2012 - 15:17 | 2796496 hannah
hannah's picture

the scuttlebut is that obama has the 'slim'.....

Fri, 09/14/2012 - 15:25 | 2796536 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

His always ashen face tells me he is still chain smoking, too.

Fri, 09/14/2012 - 14:58 | 2796388 cynicalskeptic
cynicalskeptic's picture  has inflation at 5% NOW using previous methodology.  

Government has been playing with all stats for some time now to underplay how screwed up things are - since the oil crisis in the 70's.  Better to lie to the public and stay in office than tell the truth and get thrown out.

Easier to tweak the numbers than solve the problems.

Sat, 09/15/2012 - 02:08 | 2798137 hedgehog9999
hedgehog9999's picture

EXACTLY!!!, we are already at 5% minimum if you eat and drive.....

 this QE will increase inflation gradually but on an exponential curve, to 6,8,11,14,19,26 , perhaps even 100% or more if they don't stop....within a few years maybe even less, ask any Mexican over 55 years old, who witnessed their currency devalue many many times over 20 years from 1975 to a result of inflation, the US prints its own currency and maybe won't devalue as the fuckers in Europe will be debasing at the same rate so the US/Euro rate is likely to stay beween $1 and $1.60 where it has been over the last 10 years. 

But the standard of living for every American except the top 5% will decline quite significantly.

Fri, 09/14/2012 - 15:01 | 2796402 geewhiz190
geewhiz190's picture

market seems to agree, material stocks stong, manufacturing weak, bonds getting crushed, consumer staples struggling. TIPS up big. my guess is 401ks are skewed to the fixed income side so the september statements will probably be flat to down, the average investor doesn't own much Cliffs Resources or Joy Global, he's in Con Ed or Verizon

Fri, 09/14/2012 - 15:03 | 2796415 Yen Cross
Yen Cross's picture

The "ALGOS" even trade "Funerals"? Pathetic!

Fri, 09/14/2012 - 15:20 | 2796417 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Since inflation will direct oil prices higher (never mind any supply constraints created by peak oil production and a falling EROEI or unrest in the ME) and since higher oil prices will have a direct impact on not only the transportation of the populace but of all goods and assets (namely food due to petro-ferts and transportation), buying silver will act as the best hedge as the Oil/Silver ratio has held consistent at 3:1 for the last 100 years.

Fri, 09/14/2012 - 15:05 | 2796429 icanhasbailout
icanhasbailout's picture

5% inflation? That would be WONDERFUL news!



... but how are they going to get inflation to drop that low with all this money printing going on?

Fri, 09/14/2012 - 15:06 | 2796440 Racer
Racer's picture

"well anchored" and "transitory"

More idiotic statements for the history books to be filed under the section containing such lies as

"sub-prime is well contained"

Fri, 09/14/2012 - 15:16 | 2796453 khakuda
khakuda's picture

The Fed and Congress are setting the perfect conditions for long term Stagflation.  They actually couldn't create a better environment if they tried.

Let's face it, this latest round of infinite money printing is designed to take bad mortgages off the balance sheet of the banks and put them on the U.S. taxpayer.  The mortgages will not be saleable ever, but held to maturity.  All the while earning "interest" which Bernanke says reduces the deficit!  What a joke.  They won't be able to reduce the balance sheet and are basically setting us up for that by telling us now that they are going to stay accomodative long past the time the economy recovers.

They think we are all idiots.  Sadly, many are not financially not astute and can't grasp the point that paper money has no value with an irresponsible money printer in charge.

Fri, 09/14/2012 - 15:10 | 2796464 bugs_
bugs_'s picture

Here in the Deflationists Lounge there is a lot of upset over the size of the soap bars - they seem to be half the size for the same price.  Better take two rolls of TP with you since a roll isn't what it used to be.

Fri, 09/14/2012 - 15:21 | 2796512 Dumpster Fire
Dumpster Fire's picture

Just remember no sex in the champagne room.

Fri, 09/14/2012 - 15:11 | 2796467 Al Huxley
Al Huxley's picture

Wait a second - how the fuck can this be!?  How is printing trillions of dollars to fund uncontainable govt debts and deficits (and to cover investment bank losses and make them whole) in any way inflationary?  There must be some kind of mistake or miscommunication here...

Fri, 09/14/2012 - 15:12 | 2796470 semperfi
semperfi's picture

"It will surely be difficult for Ben to keep-on-buying ('Finding Nemo'-like) in the face of that kind of 'transitory' rise in real data"

And it will be IMPOSSIBLE for him to stop buying (right Graham? if you are out there).

I'm ALL-IN on Benny Boy Buyin !  Easy win.

Fri, 09/14/2012 - 15:14 | 2796485 hampsterwheel
hampsterwheel's picture

First comes inflation - then the sheeple notice the inflation - then there is civil unrest - then come the captial controls, (Italy= no transaction in cash over 50 euros; Argentina = no buying of gold)... then come the legislators saying such people are "financial terrorists" whereas we get a financial TSA department to catch those rich evil doers... then we get money velocity because there isn't anything else to do with your cash but to buy things now before the price goes up - payday shopping binges - then the run on the dollar - then financial collapse - then the politicians blame capitialism and have a well drafted plan of action to lead us out of the mess (of their creation) --- then its rinse wash repeat for the next 100 years - there is nothing new under the sun....

Fri, 09/14/2012 - 15:17 | 2796498 Auburn
Fri, 09/14/2012 - 15:18 | 2796504 Yen Cross
Yen Cross's picture

Covert Affairs?  TGIF!

Fri, 09/14/2012 - 15:26 | 2796546 NotApplicable
NotApplicable's picture

I'm thinking that the thing to do here is to help Benron sterilize his MBS purchases by stopping our mortgage payments.


Fri, 09/14/2012 - 15:29 | 2796569 Yen Cross
Yen Cross's picture

I like 99.99999 % of what you say ( N/A).  You do your homework, and I respect that! :-}

Fri, 09/14/2012 - 15:30 | 2796575 surf0766
surf0766's picture

food inflation is getting out of control. How freakin small can they make the packages? 

I used to feel sorry for the idiots who didn't understand what is coming. I no longer feel that way. Screw them for being idiots.

Fri, 09/14/2012 - 15:36 | 2796617 Yen Cross
Yen Cross's picture

Would you like some extra sauce on that " Cheerio"?

Fri, 09/14/2012 - 15:35 | 2796612 Pejorative Requiem
Pejorative Requiem's picture

Inflation is already over 5% 3 to 6 months, but, in spite of that, uncertainty.... which is to markets what a pain in the left arm is to a heart attack, is still keeping a lot of entities folks heavy in cash. But to quote a certain congressman, "Is gold money?" In the coming times, folks may want to consider not only inflation, but what is spendable, and what is retrievable.

Fri, 09/14/2012 - 15:47 | 2796677 t0mmyBerg
t0mmyBerg's picture

implying, not inferring ffs.  you infer from, imply to.  therefore:

"market expectations of inflation are implying CPI could rise to over 5% within the next 3 to 6 months"


"market expectations of inflation are inferring CPI could rise to over 5% within the next 3 to 6 months"


its the little thingsand clearly 5% is but a pipe dream.  if only it were going to be that little.  sigh

Fri, 09/14/2012 - 15:51 | 2796700 WhiteNight123129
WhiteNight123129's picture

Fed has succeeded in scaring the rich and corporations into spending their cash instead of hoarding it which would not increase wages and circulation. The problem with 1933 is that you could never scare Gold hoarders into inflation and spend it.

People will get a job and repay their creditcard debts and mortgage debts with confettis, corporations will see shitty profit margins. Fed is stimulating the demand from the people who have cash (rich people and corporations.) The demand always come from the ones who has money when there is attack on the currency (real or imaginary, it is the same actually--- reflexivity--)

Fed is done in 9 months buying stuff. Gold gets wacked first in 9 months, Equity rally first, but then stagflation sets in and Gold comes right back and equities sag.. Sell your Gold when inflation makes the headlines but beware of the fake sell-off because this decrease in unemployment will be stagflationary./


Fri, 09/14/2012 - 15:58 | 2796746 Lukacko
Lukacko's picture

And I just got a 5% raise at work.  Fuck me, right?

Fri, 09/14/2012 - 16:12 | 2796806 Pejorative Requiem
Pejorative Requiem's picture

5 percent? Keep up the good work, you're in the 90th percentile.

Fri, 09/14/2012 - 15:59 | 2796747 Shizzmoney
Shizzmoney's picture

"If you print it, they will consume (we think)"

- Ben Bernanke's Head

Fri, 09/14/2012 - 16:54 | 2796908 WhiteNight123129
WhiteNight123129's picture

No no no, if the Fed is pointing a fire thrower on AAPL s cash pile, Tim Cook will waste his cash. If the Fed is pointing a firethrower on the Bond trader nice account of fiat accumulated in front running the Fed he will think what the heck, let us throw a party and bring a bunch of hookers. If the Fed points a firethrower on the account of the stockbrokers who thought a beautiful deleveraging = higher stocks and higher bonds (bonds are understanding it right now, equities not yet, they are the last idiot always.) Your coke snorting stockbroker who bought Jeff Koons will panic and his cash he will spend! In the end the Fed will not need to burn the cash of those people, THEY WILL BURN IT ON THEIR OWN, CHUCKLES....And that will help the consumer deep in debt.. Inflation = increase in circulation = increase in wages, for now we have dollar devaluation in terms of hard assets, with little increase in wages. The Steepening yield curve is bringing stagflation slowly. The poor IRR project the corporations will be forced to do will generate little output, throwing money for little output is a second definition of stagflation.

Fri, 09/14/2012 - 16:24 | 2796855 mademesmile
mademesmile's picture

Found out I'm getting laid off end of month. I bought  a gross of Kerr jars, and will be spending my now available free time canning my surplus garden veggies, making homemade sauce and whatever the hell I feel like to make myself feel richer. Forget house equity, there is NOTHING like a well stocked pantry to make one feel wealthy.

Fri, 09/14/2012 - 18:13 | 2797236 edifice
edifice's picture

The real rate of inflation is pretty easy to figure out: Take what the Fed says it is and multiply by 3. So, if Fed says it's 3%, it's really around 9%.

Fri, 09/14/2012 - 23:17 | 2797954 neutrinoman
neutrinoman's picture

The Saint Louis Fed is a bit of a "dissident" outpost in the Fed universe. After Greenspan decided in the mid-90s that we no longer know what "money" is and refused to use M2 or whatever growth rate (as Volcker did in the 80s), the St Louis Fed kept keeping and publishing the numbers anyway, showing the manic expansion of M2 since 1995. It is a decentralized system, although under Greenspan it became far more centralized and much more dominated by the NYFed--Fed-Governors-in-DC axis.

Real numbers are available; you just have to dig a bit and do some work. The media, of course, are lazy and just scream headlines in your face -- except for occasional moments of lucidity on Bloomberg or CNBC.

(A site like ZH is going to attract more than its fair share of obsessives and people with twisted minds. Let's just keep on the topic.)

Sat, 09/15/2012 - 09:34 | 2798370 ElZorillo
ElZorillo's picture

Wheat and corn prices have increased rapidly in the past weeks (by as much as 50%)


Inflationary maybe?

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