As a follow up to ISM the other day, I wanted to pass along this chart, showing stagnant growth, but a big spike in prices paid:
via Jake
ISM Prices (May 2008)
As a follow up to ISM the other day, I wanted to pass along this chart, showing stagnant growth, but a big spike in prices paid:
via Jake
I like Steve Pearlstein of the Washington Post…he writes that the mirage economy is fading…this chart lends credence, along with the drill down on durable goods and just about every other trumped up number we get now.
Inflation-induced demand is the mirage.
When the BLS releases productivity numbers making it appear we are ever so much more productive, remember, they use the CPI to discount their dollars. It’s all a mirage.
In response to rising prices in Europe, ECB president Trichet raised the possibility that the ECB’s 4.00 percent policy rate may actually be hiked to 4.25% at the July meeting to squelch euzozone inflation.
As one would expect, European stocks sold off on the dismal news of a rate hike. But U.S. stocks are unruffled by the prospect.
Maybe they should be. Hiking rates during a global liquidity crunch which is not over yet, could prove to be a policy error of monumental proportions. Just as one example, every Federal Reserve attempt at hiking rates during the 1930s produced loud cracking noises, followed by avalanches of economic crumbling.