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Inflation Madness!

February 14, 2011

A few weeks back, I pointed out that inflation seemed to have spiked after January 1st. So I decided to do a bit more research.  Raw price data spikes every years after January 1st.

If the monthly inflation numbers continue to grow at a high rate over the next few months, I’ll be slightly concerned.  I am treating this as a Seasonal effect until then.

And there was a recent post over on Zerohedge that claimed we were having a huge price spike.  However, looking at the same data in a more traditional manner, we have a chart so boring that even I can barely stand to look at it.  Instead of showing a huge, huge spike, it shows the data in a form we’re really used to seeing. I know that 2.5% inflation really makes some people angry – they cannot stand thinking about any inflation, much less 2.5% inflation.  But overall, this rate of inflation is minor and is easily below the average inflation rate of the last 50 years.  Here is the boring chart in all of its glory:


That puts it all into a different perspective, eh?  One thing we need – more people worried about the wrong threat.

If you recall, Japan lost an entire generation of economic growth to inflation hawks.  It is one of the tragedies of the last 20 years of the 1900’s.  125 million people have had stagnant lives because of inflation that never happened.   Would Japan have flying cars already?  We’ll never know…


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