Patients’ hospital expenses have nearly doubled in the past decade. So, too, has the price of college textbooks. And gas prices have more than doubled, while prices of fuel oil and other fuels for home use have climbed a whopping 145%.
Is a spike in the monetary base – currency in circulation plus bank reserves at the Fed – the first sign of imminent inflation?
Art Cashin, the well-respected director of floor operations at the New York Stock Exchange for UBS, recently told King World News the increase in the monetary base may well be a sign of impending inflation.
Monetary base, sometimes called high-powered money, is the basis for the bank lending that drives our economy. When interest rates are normal, banks use their reserves for lending.
Unfortunately, these are not normal times. The U.S. Federal Reserve and other central banks around the world continue to hold interest rates at zero.
Zero interest rates mean zero returns. Investors don’t get paid for investing. Banks don’t get paid enough interest to compensate for the risk of lending money into the economy. Looking at it another way, there is no penalty for doing nothing with your money.
USA TODAYConsumer price inflation for April accelerates to 10.36% versus 9.47% in MarchEconomic TimesNEW DELHI: Consumer price inflation accelerated in April to 10.36 per cent, making life harder for the central bank as it looks to kickstart a flagging…
Wall Street JournalIndia Inflation AcceleratesWall Street JournalBy ANANT VIJAY KALA, NEW DELHI – India's inflation accelerated to 7.23% in April from a year earlier, and up from 6.89% in March, as prices of most commodities rose, adding to conce…
Richmond Fed Prez Jeffrey Lacker became the second Fed district bank president to predict that the Fed would need to raise rates next year, ahead…
Nightmare scenario: U.S. deflation risks rising
On Wednesday October 26, 2011, 4:19 pm EDT
By Jason Lange
WASHINGTON (Reuters) – Risks are rising that a moribund job market and potentially steep drop in inflation could push the United States into a d…
The I-word
Harvard economist Kenneth Rogoff has spent his career fighting inflation. Now he thinks it might just save the economy.
LIKE CORRUPTION, crime, and asbestos, “inflation” is a word that many Americans imagine in all-red capital letters…
Wednesday, June 15, 2011
Misc: Empire State Survey indicates contraction, Inflation rate lower, French Bank Rating Reviewed
by CalculatedRisk on 6/15/2011 08:30:00 AM
• From the NY Fed: Empire State Manufacturing Survey
The Empire State Manufact…
By guest contributor Ed Easterling
May 17, 2011
There is a skeptical gremlin perched on the left shoulder for many investors. He often sneers at notions of “cycles” and other presumably predictable periods. When the word “secular” accompanies t…
“Don’t worry about it,” says Bernanke, Geithner et al. The economy is recovering. But is it?
Nah…
It’s going to turn out very, very badly.
As predicted here, the feds’ easy money is making things much harder for most people. It’s p…
