When does asset price inflation lead to consumer price inflation?

With asset price inflation the unofficial policy of our Federal Reserve in driving economic growth over the past 11 years and particularly over the past two years, the question of late has been when does the easy money lead to consumer price inflation. Aug CPI is expected to rise .3% m/o/m but fall 1.7% y/o/y after dropping by the most since 1949 in July. With gold busting out again to a fresh all time record high, it is clear what that asset class is saying about currency and price stability and future inflation. The good US retail sales data yesterday is helping to lift most Asian stocks due to their export focused businesses. ABC confidence fell 1 point to -49, a 7 week low. The MBA said purchases fell 10.3% but follows last week’s 8 month high. The Nov 30th expiration and possible extension of the home buying tax credit looms large. Refi’s fell 7.4%. Aug IP is out today and should rise for a 2nd month after 8 months of declines.

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