Cents and Sensibility: the Inflation Guy Podcast

This month's CPI was a good number - happy news! But if the Inflation Guy was going to design a 'good number' from scratch, he wouldn't make it look like this. He would start at the other end. What does that mean? Take a listen, and find out why this is a good report and a 'goods' report, but maybe not a great report.   NOTES Blog for this month’s CPI: Inflation Guy’s CPI Summary (May 2024) Important article: “The Inflation Management Opportunities In The Insurance Industry Today” To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/ To Subscribe for free to the blog: https://inflationguy.blog/ Check out the website! https://www.EnduringInvestments.com/

At the 2023 Fed conference at Jackson Hole, Chairman Powell promised that the Fed would keep fighting inflation "until the job is done." Is the job done? The Inflation Guy thinks the signs suggest inflation is converging on a higher level than the Fed desires. Will the Fed really keep after it? Listen and find out what the Inflation Guy thinks. NOTES Pod Callback: Ep. 109: Famous Last Words Powell snippet: Source Bloomberg TV Odd reference: Wikipedia on Mummenschanz Blog for this month’s CPI: Inflation Guy’s CPI Summary (April 2024) Important article: “The Inflation Management Opportunities In The Insurance Industry Today” To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/ To Subscribe for free to the blog: https://inflationguy.blog/ Check out the website! https://www.EnduringInvestments.com/

The economists were mostly on-target with today's CPI report, at least with the headline and core figures. But that doesn't mean that there was nothing going on underneath the surface. Below the big headlines, some things are getting better and some things...aren't. What does it all mean, and does the Fed have some cover to cut rates? Listen to this episode to hear the Inflation Guy's take on those questions!   NOTES Blog for this month’s CPI: Inflation Guy’s CPI Summary (April 2024) Important article: “The Inflation Management Opportunities In The Insurance Industry Today” To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/ To Subscribe for free to the blog: https://inflationguy.blog/ Check out the website! https://www.EnduringInvestments.com/

Explore the history of 'famous last words' in finance, from the Civil War to recent Fed chairs. Analyze the errors of past Fed predictions on inflation and tightening policies. Discuss the misconceptions of using inflation to address national debt and the challenges faced by the Fed in fragile economic growth.

There are several pernicious myths about the velocity of money that seem to never die. "Friedman said velocity is stable." "Velocity is just a plug number, so it is random." "Velocity is permanently impaired and only declines over time." These drive the Inflation Guy bananas, and from time to time he feels the need to talk about velocity. In this episode, the IG describes the main inputs into his model of velocity, and what the model currently implies about the future path of velocity from here. And, to be fair, he also kvetches some, and that's unseemly. We apologize for him. NOTES Blog Callback: “Enough With Interest Rates Already” Podcast Callback: “Ep. 50: What the Money Velocity Comeback Means for Inflation, and Investors” Important article: “The Inflation Management Opportunities In The Insurance Industry Today” Blog for this month’s CPI: Inflation Guy’s CPI Summary (March 2024) To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/ To Subscribe for free to the blog: https://inflationguy.blog/ Check out the website! https://www.EnduringInvestments.com/

We don't know if the origin of the 'ten most dangerous words in the English language' was Ronald Reagan, or if the story predates him. But those words, "I'm from the government, and I'm here to help you," are the theme to today's podcast. The Inflation Guy interprets some recent news stories, but ties it all together with a crucial observation about what happens if the 'scarce resource' in a particular economy turns out to not be 'labor.' NOTES Dan Bongino Show from April 18 (https://megaphone.link/WWO9433765103 ). Listen from the 47 minute mark. Forbes “Medical Analysis by Milton Friedman” (2009) Washington Post “Biden administration to cap rent increases for some affordable housing units” Blog Callback: “Inflation and Insurance Companies, with Bill Poutsiaka” Important article: “The Inflation Management Opportunities In The Insurance Industry Today” Blog for this month’s CPI: Inflation Guy’s CPI Summary (March 2024) To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/ To Subscribe for free to the blog: https://inflationguy.blog/ Check out the website! https://www.EnduringInvestments.com/

On this month's CPI report, the Inflation Guy addresses yet another high-side surprise and discusses the details, along with how this fits into the continuing narrative. Curious about how this concerns ponies? You'll have to listen to the episode!   NOTES Blog for this month’s CPI: Inflation Guy’s CPI Summary (March 2024) To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/ To Subscribe for free to the blog: https://inflationguy.blog/ Check out the website! https://www.EnduringInvestments.com/

Okay, buckle up because the Inflation Guy here is going to cover some big-time concepts. Wayyyy back in 2003, some guys named Jarrow and Yildirim explained how inflation acts just like foreign exchange, except not foreign and not on an exchange. No, no, stay with me here. Turns out they were right, and a lot of what is happening today - and the mistakes in interpretation that are being made - can be understood if you understand that the 'inflation FX market' has just changed in important ways. This is an important episode!   NOTES Jarrow R, Yildirim Y (2003) Pricing treasury inflation protected securities and related derivatives using an HJM model. Journal of Financial and Quantitative Analysis 38(2):337–359. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=585828 Unidad de Fomento (Wikipedia entry): https://en.wikipedia.org/wiki/Unidad_de_Fomento Chart: Nominal and inflation-adjusted Case-Shiller 10-City index, normalized to end of 2019 Chart: Nominal and Real S&P 500 Earnings, normalized to end of 2019 To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/ To Subscribe for free to the blog: https://inflationguy.blog/ Check out the website! https://www.EnduringInvestments.com/

Every once in a while, it is a good rigor to take all of those sticky notes that festoon your desk and put them into one, organized, document. At least, that's what the Inflation Guy tells himself. On the other hand, they say 'a clean desk means someone else is in charge.' Still, it was getting to be a fire hazard. In this episode, the Inflation Guy tackles a few disparate stories and recent trends that seem to have an overarching theme: the general disinflationary trend we have been enjoying for the last year is starting to have some defectors. NOTES To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/ To Subscribe for free to the blog: https://inflationguy.blog/ Check out the website! https://www.EnduringInvestments.com/

Another month, another above-consensus CPI print. The Inflation Guy tears into the data like a feral cat, ripping away the fatty bits to get at the meaty part. Okay, maybe that was too graphic. Anyway, this cat points to several signs in this month's inflation report that inflation is starting to get 'sticky' at a higher level than we'd like it to, and the recent inflation deceleration is going to get more difficult going forward. What is the implication for Fed policy? NOTES To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/ To Subscribe for free to the blog: https://inflationguy.blog/ Check out the website! https://www.EnduringInvestments.com/