In the long-going inflation discussion, I keep hearing the same junk about “currency debasement” and the continual “It’s just around the corner’. I can hardly wait until one of my friends…after being wrong for now five years says “see, I told you so” at the first inkling of a rising, however small, inflation index.
Like a Stu Glazer quote about playing the blues “if you hit a wrong note, just hold it till it gets right”. Fine idea when it’s fun and entertainment, not so at all when setting policy. Dangerous in fact, bad for economic growth, bad for jobs, and clearly we now have proved austerity policies have deepened and prolonged the recession.
Here is a piece from yesterday specifically on the future of inflation. Well done by EconoMonitors’ James Picerno.
“Let’s begin by recognizing the US dollar has strengthened over the last two years. The idea that the currency was headed for the ash heap of forex history looks foolish at the moment. The trade-weighted measure of the greenback against the major currencies has been trending higher since 2011 and is roughly unchanged from the months preceding the start of the Great Recession. So much for debasement.”