Afforded the economic blogs their daily 30 minutes of attention, tea and crumpets in tow, and as per usual came out wanting. But first, some words of wisdom:
"There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know." –Donald H. Rumsfeld
Where Ivy League economists are concerned, you can safely bet on the the last.
If you think that there are two opinions on the topic of inflation/deflation: Keynesian and Austrian, uhm-uhm, there are as many views and terms to toy with as the eskimos have for snow, which is good, except it leaves one none the wiser.
There is one near fool proof way, however, to narrow the field of truths, and that is to instantly discount the official version, it ain’t worth the content of the spittoon, and is otherwise known as the contrarian position, or even method. Make it simple, stoopid.
Quoting The Chairman: "This fear of inflation is way overstated. We've looked at it very, very carefully. We've analyzed it every which way… We will not allow inflation to rise above 2% …."
There are two methods of inquiry with which to satisfy the question, one a priori, the other statistical, to which the dialectic method can likely, also be applied.
Statistically there’s something called the Jeffries global commodity index which since June has been steadily climbing toward 2 o’clock and currently stands at 50.85.
The other method involves two factors. First: have you had a nagging feeling that having spent the same amount of money for the exactly same items the bag feels lighter? Ok, this is one way producers control the consumers perception if inflation which they themselves experience. They reduce the content of the commodity while leaving the size of the packaging intact, or in the case of, say, a merino wool sweater, the percentage of merino is less than advertised. The second is that at the end of this month you seem to have spent more than the last. If either one feels true, that’s inflation.
Theories abound as to what causes inflation, but that’s just a theoretical pillow fight.
There is inflation, Bennies' jets may, or may not be the cause, but as per his usual, he’s full of shit; the contrarian method has worked, and in these troubling times is as good as gold, no pun intended – use it.