One look at import and export prices should make you question the idea that there is no inflation. Through May, import prices (excluding petroleum) are up 3.7% in the past 12 months, the fastest rate since October 2008 as the Panic hit. Export prices are up 5.8% during the same period, a complete V-shaped recovery from the recession bottom in the spring of 2009. The Panic of 2008, and the resulting drop in the velocity of money knocked out the inflation that was building just before Lehman Brothers was forced to fail. With velocity and the money supply both increasing at rapid rates, inflation is on the rise once again.
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Posted on Wednesday, June 16, 2010 @ 11:25 AM
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