The Inflationary No-Fly Zone

Click to enlarge.

It's an exponential trend failure two-fer.

No-fly zone

A no-fly zone (or no-flight zone) is a territory or an area over which aircraft are not permitted to fly. Such zones are usually set up in a military context, somewhat like a demilitarized zone in the sky, and usually prohibit military aircraft of a belligerent nation from operating in the region. Aircraft that break the no-fly zone may be shot down, depending on the terms of the NFZ.

No matter how hard we try (and we have made so many attempts), we cannot seem to punch through the record high set in July of 2008. Seriously. So close and yet so far!

I find it very hard to believe that the PPI will permanently hug the border of the no-fly zone. Then again, I could be wrong. Perhaps there is a relationship between hugging and ZIRPing. Japan faced 20+ years of flat consumer inflation. We've seen roughly 2 straight years of flat PPI inflation.

The Fed's ZIRP is the largest monetary operation ever mounted. Quite frankly, this kind of thing's never been attempted before in the United States.

It will be the largest airborne operation ever mounted. Quite frankly, this kind of thing's never been attempted before. We shall seize the bridges. It's all a question of bridges, with thunderclap surprise, and hold them until they can be secured.

The operation will continue until all the bridges can be secured. I have no doubts about that. Sigh.

This is not investment advice.

Update:

I wasn't happy with the ending point I chose on the second exponential trend in red. It's been updated to end at the short-term peak set in July of 2011.

Source Data:
St. Louis Fed: Producer Price Index: All Commodities