Last Thurday, David Rosenberg wrote an article entitled, "Inflation, Where is Thy Sting?" (subscription required). He outlined his bull case for bonds by showing the chart below of core CPI and went on to comment that there are many disinflationary and deflationary forces at work in the economy.
The mistake that economists like Rosie and central bankers make, IMHO, is to look at core CPI, or the Consumer Price Index ex-food and energy. Inflation is happening in hard assets, i.e. commodity prices. QE2 is blowing a hard asset bubble and it is precisely this blinkered view of measuring inflation as inflation ex-inflation that created the conditions for the last financial crisis.
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Whitney Port Minka Kelly Carol Grow Erika Christensen Emilie de Ravin
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