Don't Look Now But The Great Satan Of Economics Is Rearing His Ugly Head

We've had one position on this blog as it pertains to inflation. While everyone else was squawking about the Federal Reserve printing money over this cycle (they weren't), we were writing that everyone should wish for inflation. A rather bizarre but very rational perspective for the Fed has been trying to re-ignite inflation. Mind you, we should all want them to be successful. To answer your next thought, food and energy price increases this cycle were signaling deflation not inflation, something else we talked about.

We even ventured into the greatest of blasphemes - the Federal Reserve could print a reasonable amount of money to deal with this crisis.

Our position is and always has been that we are in a deflationary world. Many point to the Federal Reserve's recent actions as inflationary. Or that we are in an asset liquidation and the disinflation associated with such an action should not be confused with deflation. I couldn't disagree more on both counts. Time will tell but the data was and continues to be deflationary. There is no data substantiating an inflationary future.

On that note, yesterday it was reported that consumer prices dropped the most on record. I believe we are witnessing the early stages of a confirmation on our position that high food and energy prices were indeed signaling deflation.