Five Things: "Real" Economic Data and Market Separation

Kevin Depew  Jun 08, 2009 9:50 am

Five Things:
 
A look at "real" economic data, market separation, the week ahead, and much more.
 

1. A Look at the "Real" Economic Data

No matter which camp you're in, deflation or inflation, hyperinflation, it's useful to visit John Williams' site to get a quick & clean overview of where we are amid real economic datapoints.

The SGS alternate CPI shows a nearly identical drop in the rate of inflation to the government's CPI, while the government's CPI is right now showing outright deflation. Of course, as I've argued here, the critical thing to understand about this deflationary debt unwind is not nominal prices, but how the attempt to inflate the money supply has, for now, been unsuccessful.


So, while "real" inflation remains evident in nominal prices, even as the rate has plummeted...

(All charts below courtesy of John Williams' Shadow Government Statistics website.)
 

Money supply growth has not been up to the reflation challenge...
 

... as dollar demand has been greater than credit creation....



... which is running up against a pretty potent deflationary force in the unemployment rate.



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Comments (11) See All Comments »
06-08-2009, 2:26 pm
Thanks! Okay, so I was reading M1 that in a similar manner.

As far as inflation goes, I'm not sure we have a choice. Even if we remove the stupidity of the last decade, our Federal debt alone is completely unpayable. Add in stat
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06-08-2009, 4:27 pm
So they're not mailing out credit cards over the new rules or because they know that they are already facing a 25% default rate?

If the populace follows the government and business model of the past year, they'll max out the
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06-08-2009, 6:01 pm
should begin to pick up, once the Fed refuses to allow them to sit back & invest in treasuries. Given that accounting rules have been altered, so that the banks need not tremble about posting whopper losses, I think all that remains is for Fed t
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06-09-2009, 5:41 am
That's what could kick inflation into high gear. First the Fed tries everything under the sun to pyramid credit thru the banking system. If this system truly is broken, at some point they'll figure this out. Rather than just give up and t
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06-09-2009, 10:18 am
And that's the tough part: how likely is it that the Fed will hand out thousands of dollars directly into people's bank accounts? It's a possible scenario but it seems improbable currently.

And the implication of an a
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