Prognostications January to August
by One Salient Oversight
Things are progessing swimmingly
For me, that is… in terms of my economical prognostication.
So I’ll beat my own drum yet again – I know you’re all sick of someone saying “I told you so” but I still can’t understand why high priced financial analysts can make a living out of getting it wrong while little old me has to sit here and remember that I first heard the word “Schadenfreude” explained on The Simpsons.
So, anyway. Here’s what I said back in January 2008:
What I am therefore predicting in 2008 is a period of painful stagflation for America – a combination of economic contraction and inflation which will only be solved when the Fed raises rates and plunges the economy into a double-dip recession.
And here’s the latest:
U.S. consumer prices rose more than forecast in July, indicating Federal Reserve policy makers have reason to be concerned over a pickup in inflation.
The consumer price index climbed 0.8 percent, twice as much as anticipated, the Labor Department said today in Washington. The cost of living was up 5.6 percent in the year ended in July, the biggest jump in 17 years. So-called core prices, which exclude food and energy, also rose more than projected.
The report may intensify the debate between those Fed policy makers that forecast inflation will slow and those concerned that price pressures will accelerate. Increases beyond food and fuel, including gains in clothing, airline fares and education, make it less likely that central bankers will be able to keep interest rates unchanged for long.
According to the Misery Index, inflation of 5.6% plus unemployment of 5.7% equals a misery rate of 11.3. The last time it was this high was in June 1991 when it hit 11.60. The highest in 17 years. The Misery Index is a hard and fast index that is useful at measuring stagflation (but is not without its faults).
So anyway, I’ll just continue to sit here laughing maniacally and feeling good about all the emotional and economic suffering in the US while millionaire financial analysts continue to get it wrong.
The latest inflation release can be downloaded directly here. (pdf, 108.3kb)