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Main Website >>Investment Management / Alternative Investment >>Blog >> Tag: Inflation
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James Picerno, Editor, CAPITALSPECTATOR.COM

Measuring Inflation
Thursday, April 07 2011 | 04:26 PM
James Picerno
Editor, CAPITALSPECTATOR.COM

Economist Mehmet Pasaogullari at the Cleveland Fed reviews inflation from several angles. If nothing else, he offers a timely reminder that there's more than one way to skin this statistical cat. Inflation comes in a variety of flavors. But while the numbers vary, there's a common trend afoot, he reports, noting that "all measures of short-term inflation expectations we have looked at show an upward trend since last summer."

Pasaogullari continues:

"Some measures showed higher increases, and others were much more limited. Measures of longer-term inflation expectations have also risen in the last six months... However, most of the increase in the market-based measures happened in September and October 2010. The recent increases in food and energy prices have had limited, if any, effect on the long-term expectations. They seem to be well-anchored and are in line with their averages of the previous decade."

The question (as always) is whether the past is prologue? Looking for answers in real time is forever problematic. That said, the inflation forecast based on the yield spread between the nominal and inflation-indexed 10-year Treasuries has inched higher since Pasaogullari's essay was published on April 1. In fact, the Treasury market's inflation outlook is 2.57%, as of yesterday. That matches the previous peak, set back in early July 2008, when oil was near an all-time high.



The last time we hit 2.57%, the peak was short lived. Inflation expectations started falling, and crashed soon after. That's not likely to happen this time, of course. Why? The catalyst isn't likely to make a repeat performance. Massive financial crises of the type that hit the world in late-2008, fortunately, are rare. So what does that mean for the inflation trend this time? Stay tuned...

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0 Comment | Add Comment(s) | Inflation, Oil, Commodities, US_Economy,


Bill Carrigan, Founder, GETTINGTECHNICAL.COM

The 'Echo' Tech Boom
Friday, February 18 2011 | 10:54 AM
Bill Carrigan
Founder, GETTINGTECHNICAL.COM

As noted before our anticipated A-B-C correction is postponed as the U.S. FED continues to throw dollars at the capital markets with QE causing the U.S. to export food inflation which will likely end with a bubble. The hot commodity space has pushed the Reuters/Jefferies CRB Commodity index above the pre-crisis 2008 peak. Don’t let the hot commodity space distract you from other opportunities out there

Did you know that the Nasdaq 100 index is also trading above the pre-crisis 2008 peak?

This recovery beats the Dow Industrials, the Dow Transports, the S&P500, the TSX Composite and the Russell 2000 and the red hot TSX Small Cap Index. Our monthly chart of the Nasdaq 100 displays the first technology boom & bust of the late 1990’s and now the second or “echo” boom. Note the break up from that huge 2008-2010 inverse Head & Shoulders bottom.

The recovery price target of 2860 is 61.8% retracement of the first boom and bust. That gives us about 20% upside from here – have fun but be nimble



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0 Comment | Add Comment(s) | Commodities, Indexing, Inflation,


Bill Carrigan, Founder, GETTINGTECHNICAL.COM

Me see bond, Me run away
Wednesday, February 09 2011 | 09:37 AM
Bill Carrigan
Founder, GETTINGTECHNICAL.COM

Our anticipated A-B-C correction is postponed as the U.S. FED continues to throw dollars at the capital markets with QE causing the U.S. to export food inflation which will likely end with a commodity bubble. The Double Dip Recession Issue is dead and the recovery is on thanks to the US Fed and QE2. A strong recovery may be pending as U.S. private payrolls increased 50,000 but in spite the smaller-than-expected increases, the headline unemployment rate fell sharply to 9.0% from 9.4% in December. Fed Chairman Bernanke just stated that the economic recovery hasn't been strong enough to significantly reduce unemployment

Not strong enough? Be careful what you wish for - the Fed won’t let up until the recovery gets out of control – inflation is the next big problem. Keep an eye on the US 10-yr T-Note which is now breaking up to the 4% level almost back to pre-financial crisis peaks – yes interest rates are rising in spite of QE2! Our weekly 10-yr T-Bond yield chart displays a bullish higher 18-month low (bullish for yields – bearish for bond prices) positive departure analysis and early positive relative outperform vs. the S&P500.



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0 Comment | Add Comment(s) | Inflation, Recession, US_Unemployment, Bonds,


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