Econintersect: Anthony Mirhaydari of MSN Money says increased inflation is near at hand. He cites strengthening global economies, expansion of the money base, sustained higher energy prices, inventory rebuild is underway, interest rates are rising, housing prices are rising, shortage of skilled workers and industrial production is moving closer to full capacity. Mirhaydari says the potential is for inflation to move "much higher".
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Chris Cashman interviews Anthony Mirhaydari for MSN:
Not everyone agrees with Mirhaydari. For example, John O'Donnell (GEI Opinion) believes that low interest rates have many more years to run and recently reported on the long-term decline in real household incomes (GEI News).
Rick Davis, Consumer Metrics Institute, sees little inflationary pressure in durable goods prices and Steven hansen reported Friday on the sharp decline in durable goods sales in July. Davis has also reported on declining real per capita disposable incomes. See Hansen and Davis articles at GEI Analysis.
Lee Adler, Steven Hansen and John Lounsbury have all posted GEI Analysis articles in the past several days about recent negative trends in housing markets.
The August Econintersect Economic Forecast was reported with the headline "Economic Forecast August 2013: Economy Slowing To a Crawl" and the outlook for the September report due later this week is for little improvement.
Inflation concerns are nothing new. Some examples:
- Almost three years ago the Financial Times had an article about inflation concerns, which said:
"The possibility of rising inflation, and the way that could play out around the world is giving some investors a headache.."
- More than five years ago, economist Art Laffer, in the Wall Street Journal (in an article entitle "Get Ready for Inflation and Higher Interest Rates"):
"We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s."
- And almost five years ago exactly, economist and Euro-Pacific Capital President Peter Schiff predicted:
"Hyperinflation Risk High, Stocks Will Crater"
There are many different opinions and, obviously, some must be wrong.
- More inflation pain on the way (MSN News, 27 August 2013)
- There are Good Reasons Why Interest Rates Won't Rise (John O'Donnell, GEI Opinion, 21 August 2013)
- Household Income Collapse (John O'Donnell, GEI News, 14 August 2013)
- What Good Is GDP Anyway? (Rick Davis, GEI Analysis, 13 August 2013)
- Durable Goods New Orders Crashed in July 2013 (Steven Hansen, GEI Analysis, 26 August 2013)
- Real Per Capita Disposable Income at Two Year Lows (Rick Davis, GEI Analysis, 27 June 2013)
- Whither U.S. Housing? (Lee Adler, GEI Analysis, 26 August 2013)
- July 2013 New Home Sales Were Really Bad (John Lounsbury and Steven Hansen, GEI Analysis, 26 August 2013)
- Economic Forecast August 2013: Economy Slowing To a Crawl (GEI Monthly Forecast, 01 August 2013)
- Investors start to focus on inflation prospects (Richard Milne, Aline van Duyn and David Oakley, Financial Times, 13 December 2010)
- Get Ready for Inflation and Higher Interest Rates (Arthur B. Laffer, The Wall Street Journal, 09 June 2009)
- Peter Schiff: Hyperinflation Risk High, Stocks Will Crater (Julie Crawshaw, Money News, 18 August 2009)