Consumer Price Index Since 2008

The following chart shows what the consumer price index has done since hitting the bottom in December of 2008. I have added a 2nd order polynomial trend line in red (excluding the temporary deflationary deviation from February 2010 to April 2011).


Click to enlarge.

It's an awesome display of gravity if ever I've seen one.

September 26, 2013
Where Is the Panic Over Deflation?

But it's striking that the Fed's preferred price measure is declining at a time when the main conversation among policy makers is when and how to tighten monetary policy, rather than to make it more accommodative.

September 30, 2013
Warning - Deflation Will Take the Most by Surprise

The last thing on the minds of most people is deflation.

In my very humble opinion, ZIRP is going to be with us for what will seem to be an eternity, just like it was in Japan. It is also my very humble opinion that our stock market won't like much better than Japan's did. Not right away perhaps, but eventually.



This is not investment advice.

Source Data:
St. Louis Fed: CPI
St. Louis Fed: Nikkei Stock Average vs. Discount Rate for Japan