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The following chart shows the natural log of annual change in the CPI less food and energy. When using logs, exponential growth (or in this case, decay) is seen as a straight line.Click to enlarge.No matter how hard the Fed tries, it cannot seem to break through the top of the decaying trend channel. So what's the latest tactic? Taper! Good luck on that. Maybe it works. Maybe it doesn't.As seen in the following chart,...

The Fed isn't quite sure what threshold it should be using to determine when to raise interest rates. Can't say I blame them. I therefore thought I'd offer some free (deflationary) advice.Furniture sales and new home sales go hand in hand. Right? So simply raise rates when furniture store sales (as a percentage of disposable personal income) reach "normal" levels again. What could be easier? Transparent. Clean. Consistent.Click...

The following chart shows the annual change in the semiannual average of the producer price index for finished goods.Click to enlarge.1. Heckle the Fed for achieving long-term "stable price" certainty?2. Heckle Jeremy Siegel for warning us that the Fed would raise rates well before 2014?3. Heckle CNBC for warning us what the taper would do to interest rates?4. Heckle Shadowstats for misguided hyperinflation theories?So...

The following chart compares the 3-month treasury bill yield in the aftermath of the Great Depression to the 3-month treasury bill yield in the aftermath of the Great Recession.Click to enlarge.For the record, I am not predicting World War III (nor would I expect it to even remotely solve our long-term ZIRP problem as effectively as World War II did).I know not with what weapons World War III will be fought, but World...

The following scatter chart compares annual disposable personal income per capita growth (bottom scale) to the annual increase in the consumer price index (left scale).Click to enlarge.From 1960 to 2013:1. 2009 was the worst year for disposable personal income growth per capita. It was also the record low year for consumer price inflation.2. 2013 was the second worst year for disposable personal income growth per capita....

Click to enlarge.Wikipedia: OptimismOptimism is a mental attitude or world view that interprets situations and events as being best (optimized), meaning that in some way for factors that may not be fully comprehended, the present moment is in an optimum state. The concept is typically extended to include the attitude of hope for future conditions unfolding as optimal as well.Hey! Look! A parabola! Woo-hoo!See Also:St....

The following chart shows the natural log of the quarterly average of the 10-year treasury yield. When using natural logs, constant exponential growth (or decay) is seen as a straight line.Click to enlarge.I have added a parabolic trend channel in red that uses the data points shown in red. I have also added a parabolic trend in blue that uses all of the data points. Note that the correlation of the blue trend line...

The following chart shows the interest earned on MZM money stock divided by disposable personal income.Click to enlarge.Unless one counts cost cutting (and therefore weak employment growth) as a long-term growth strategy, we're apparently fresh out of "genius" ideas.The chart is especially interesting if one considers how much MZM has grown relative to disposable personal income. It's almost like the more MZM we generate,...