Deflation or Inflation?
Posted By Barry Ritholtz On August 19, 2009 @ 11:45 am In Inflation | Comments Disabled
The one question I seem to get more than any is on (Hyper) Inflation versus Deflation. As previously noted, we clearly are in a Deflationary party of the cycle now.
While inflation may occur ion the future, and the possibility exists for Hyper-Inflation, these are merely potential issues down the road.
As these two charts show, we now have Deflation, are likely to see it continue for some time into the future:
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Near Record Deflation Rates At All Levels
click for larger charts
[1]
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US capacity utilization leads core inflation by about a year
[2]
Chart source: Albert Edwards, Society General
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[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2009/08/cpi-ppi.png
[2] Image: http://www.ritholtz.com/blog/wp-content/uploads/2009/08/cap-util-leads-core-inf.png
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