September 27, 2022
A listener wrote in to ask about whether the analogy (Ep. 37) about price being the fulcrum between buyers and sellers in the economy has different implications when the buyers are competing on different terms. What if one guy buys all the butter? This would make the Inflation Guy sad, because he loves butter - but more deeply, the answer to the question bears on what the function of the price system is, and when it can be said to be "not working."
September 13, 2022
It seems that we keep thinking that inflation has reached a peak, and that inflation pressures are on their way back down. The market seems to have gotten very confident about that fact. In this episode, the Inflation Guy asks and answers the question...are we there yet?
September 6, 2022
Two weeks ago, President Biden waved his hand and forgave billions of dollars of tuition debt. Predictably, many have called this super-inflationary because of the increase in the deficit it entails. Is it? The Inflation Guy may surprise you with his answer, and with his warning for Republican strategists.
August 22, 2022
Why can't policymakers take a year off from dumb ideas every now and then? In this episode, the Inflation Guy addresses the various concerning clues that Powerful People are thinking about implementing wage and price controls to address high inflation. Because, evidently, they'd rather have shortages and ration cards. This is a bad idea; it has always been a bad idea; it has never worked and never will. Let's stop it before it gets started. (Yes, this is a rant.)
August 10, 2022
In the monthly CPI analysis, the Inflation Guy highlights the dichotomy from today's CPI report: all of the things that improved, and led to a surprise in core CPI, were 'supply chain', flexible things; meanwhile the sticky stuff like rents and medical care continued to be problematic. Does this help the Fed? Does it help the market? Does it help the Fed help the market? Listen to find out.
August 8, 2022
This is a quick 'policy brief' focusing specifically on whether the Inflation Reduction Act will actually reduce inflation or not. The overall answer is somewhat milquetoast, but the details are interesting. The big question is, why do the bill's sponsors suppose it will reduce inflation? The answer is revealing.
July 28, 2022
Let's see, the cue card here says that money velocity is an anachronistic concept; velocity is a plug number that has no economic significance; its value has been 'disproven'; and anyway velocity is dead forever so, not to worry.
It's a good thing that the Inflation Guy doesn't read cue cards! Otherwise, he might not have expected the current turn higher in money velocity, and he might be tempted to believe market pricing that says inflation is about to obediently plunge back to the Fed's target. And where would be the fun in that?
July 14, 2022
The Inflation Guy is running out of ...what's the opposite of "superlatives?"...to describe the current inflation environment. The July CPI report was yet another new high and yet another upside surprise. So what is the Fed going to do in response? And why does the market seem so confident that inflation is about to plunge back to 2%, when it is still rising at the moment?
June 30, 2022
So they told the Inflation Guy: "People love 'whodunnits.'" We don't really know why they told him that but in any event we have one here: what a story! The tale of inflation futures starts in the 1800s; it has economists and hippies and heroes and villains; a noble quest and a tragic ending. Or is it really tragic? Or is it really an ending? Listen and find out!
June 21, 2022
Gold isn't as simple as it looks, or feels. Or smells, for that matter. In this episode of Cents and Sensibility, the Inflation Guy explains why gold doesn't act much like a short-term inflation hedge, but actually behaves much more like TIPS. Should gold have an outsized position in your portfolio? Depends how you feel about inflation-linked bonds!
