prag cap inflation/deflation

[marvenger]

http://pragcap.com/are-the-inflationistas-right

[cjppjc]

Re: prag cap inflation/deflation

Thanks for the link. This is the age old question here eh?

[raja]

Re: prag cap inflation/deflation

Demand Destruction = Disinflation

Bernanke Faces This-Time-Different Disinflation as CPI Slows

By Joshua Zumbrun

May 6 (Bloomberg) -- The phones started ringing about the time JPMorgan Chase & Co. economists Bruce Kasman and Michael Feroli moved into Bear Stearns’ former Manhattan headquarters in 2008.
“I wish I’d kept a log” of how many people “were just freaking out, calling us nonstop” with questions about the next wave of inflation, said Feroli, the chief U.S. economist. Now the calls have “dried up to a trickle,” he said, even though the Federal Reserve’s balance sheet is close to a record $2.34 trillion and the central bank has left its benchmark interest rate near zero since December 2008.
High unemployment and low inflation -- a combination unprecedented since at least World War II -- will keep Fed Chairman Ben S. Bernanke from raising rates until the second quarter of 2011, Kasman and Feroli say. Their prediction is far later than the November increase forecast by 47 economists in an April 1-8 Bloomberg survey. With the jobless rate above 9 percent since May 2009, workers’ ability to bargain for higher wages has been sapped, along with consumer demand that would allow companies to raise prices.
“The inflation process is going to move slowly,” said Kasman, chief economist and a managing director at JPMorgan Chase, which purchased the failing Bear Stearns two years ago. “The job is to reflate the economy in an environment where there are powerful disinflationary forces. You need a reasonably long period of growth for that.”
Slowest Pace
The Fed’s preferred inflation gauge -- the core personal consumption expenditures price index, which strips out food and energy -- rose at an annual rate of 0.6 percent in the first quarter, the slowest pace since records began in 1959, according to an April 30 Commerce Department report.
Bentonville, Arkansas-based Wal-Mart Stores Inc. cut prices on more than 10,000 items after sales at U.S. stores opened at least a year fell 1.6 percent in the quarter ended Jan. 31, the world’s largest retailer said April 9, adding it plans more reductions.
Home Depot Inc., the largest U.S. home-improvement retailer, lowered prices in March on flowers, fertilizers, lawn equipment and outdoor furniture to help meet its goal of increasing annual sales for the first time in five years.
“We are looking to continue to drive our traffic in the stores,” Craig Menear, executive vice president of merchandising for the Atlanta-based company, said in a March 17 telephone interview. “Things are still difficult out there for customers.”
.
.
.
http://www.bloomberg.com/apps/news?p...d=abP62oREMK.Q

[marvenger]

Re: prag cap inflation/deflation

doesn't seem to go away. The world is drowning in debt and a monster amount of printing hasn't created any inflation. All its done is keep banks solvent but there's nota hell of a lot willingness to take on more debt or dish it out. All the liquidity and and now what seems like casino trading is rapidly destroying trust in markets too. gold still has to do well i guess.