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Five Things: "Real" Economic Data and Market Separation


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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