Inflation Clarification

By far the most negative feedback I get is when I write something about inflation or specifically, about how inflation is nowhere to be found outside of the stock market on this cycle.  A quote from this morning’s article disturbed one reader thusly…

“So too have many notable and respected asset managers and economists been thrown for a loop during the current inflation operation that does not even show any signs of inflation’s effects other than in the stock market.”

“So this massive expansion of currency and credit (inflation) hasn’t caused other prices to rise? It’s all been quarantined in the stock market? Hmmm…so higher prices for milk, beef, eggs, various restaurant and fast food, dog food, lumber, grass seed, etc. that I have personally experienced are actually just my imagination?

Ya know, I really enjoy your website most of the time but then you throw me for a loop by writing this ridiculous stuff. I don’t understand.”

To which I responded (and respond generally to anybody on the topic)…

“Well, that’s the problem with public writing. I’ll write something, you’ll focus on it and you won’t weight it against billions of other words I’ve written.

Got to love the internet. But just realize we are talking time frames here. I have often called the rises in the things you mention the embedded effects of previous inflation operations. There’s no give back on that stuff.”

Just thought I’d clarify for the others out there who get irked when I write things like that.  They are inflating, they have been inflating and they will probably continue to inflate.  But it is the large speculative interests who control where the inflation flows.

The bottom line though is that inflation is always damaging and the other bottom line is that there is a deflationary force out there always seeking to liquidate an inflation cycle.  But the reader’s point is a strong one too; these effects get embedded in certain vital areas over the decades.

[edit] The previous post to this one shows an ‘inflation expectations’ gauge (TIP-TLT) and two potential beneficiaries in the event the USD does become subject to increasing US inflation fears.  But as a simple chart twittler in real time, I have to call what I see right here and right now.  Not what happened on previous cycles.

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